Torts Long Summary – Hutchinson - 2018

DAMAGES....................................................................................................................................................................3
CALCULATING DAMAGES...........................................................................................................................................4
Andrews v. Grand & Toy Alberta Ltd. [1978] SCC.........................................................................................................4
Watkins v. Olafson [1989] SCC.......................................................................................................................................6
Rules of Civil Procedure RRO 1990, reg 194, rule 53.09.................................................................................................6
Arnold v. Teno [1978] SCC.............................................................................................................................................6
Toneguzzo-Norvell v. Burnaby Hospital [1994] SCC......................................................................................................7
Migdal Insurance v. Abu Hana [2005] SC of Israel..........................................................................................................7
Bradburn v. Great Western Railway Co. [1874] UK........................................................................................................8
Cunningham v. Wheeler [1994] SCC...............................................................................................................................8
MB v. British Columbia [2003] SCC...............................................................................................................................8
STANDARD OF CARE...............................................................................................................................................9
THE OBJECTIVE STANDARD.......................................................................................................................................9
Vaughan v. Menlove [1837] UK......................................................................................................................................9
Roberts v. Ramsbottom [1979] UK................................................................................................................................10
Mansfield v. Weetabix [1998] UK.................................................................................................................................10
CHILDREN.................................................................................................................................................................11
McHale v. Watson [1966] Australian HC.......................................................................................................................11
R v. Hill [1986] SCC......................................................................................................................................................12
McErlean v. Sarel [1987] Ontario Court of Appeal........................................................................................................12
REASONABLE CARE..................................................................................................................................................13
Richard Posner “A Theory of Negligence” [1972].........................................................................................................13
Leslie Bender “A Lawyer’s Primer on Feminist Theory and Tort” [1988].....................................................................14
Richard Posner “Conservative Feminism” [1989]..........................................................................................................14
Bolton v. Stone [1951] UK.............................................................................................................................................15
Ford Pinto Case.............................................................................................................................................................. 16
Overseas Tankship Ltd v. The Miller Steamship (Wagon Mound No. 2) [1967] UK.....................................................16
Latimer v. AEC [1953] UK............................................................................................................................................16
Tomlinson v. Congleton Borough Council [2004] UK...................................................................................................17
Watt v. Hertfordshire County Council [1954] UK..........................................................................................................18
CUSTOM....................................................................................................................................................................18
The TJ Hooper [1932] USA...........................................................................................................................................18
Ter Neuzen v. Korn [1955] SCC....................................................................................................................................19
DUTY OF CARE........................................................................................................................................................20
Winterbottom v. Wright [1842] UK...............................................................................................................................21
Donoghue v. Stevenson [1932] UK................................................................................................................................22
Palsgraf v. Long Island Railroad Co. [1928] New York.................................................................................................24
Haynes v. Harwood [1935] UK......................................................................................................................................25
Dobson v. Dobson [1999] SCC......................................................................................................................................25
Kamloops v. Nielsen [1984] SCC..................................................................................................................................27
Cooper v. Hobart [2001] SCC........................................................................................................................................28
Rankin v. JJ [2018] SCC................................................................................................................................................28
REMOTENESS...........................................................................................................................................................29
In Re Polemis and Furness, Withy & Co [1921] UK Court of Appeal............................................................................29
William Prosser: “Palsgraf Revisited” [1953]................................................................................................................30
Overseas Tankship (UK) v. Morts Dock & Engineering (The Wagon Mound, No 1) [1961] Privy Council..................30
Smith v. Leech Brain & Co Ltd. [1962] UK...................................................................................................................31
Cotic v. Gray [1981] Ontario Court of Appeal...............................................................................................................32
Hughes v. Lord Advocate [1963] UK House of Lords...................................................................................................33
Clarence Morris: “Duty, Negligence and Causation” [1952]..........................................................................................33
INTERVENING PARTIES – NOVUS ACTUS INTERVENIENS.............................................................................................34
Bradford v. Kanellos [1974] SCC..................................................................................................................................34
 Home Office v. Dorset Yacht Co Ltd. [1970] House of Lords.......................................................................................35
Lamb v. London Borough of Camden [1981] UK..........................................................................................................36
CAUSATION...............................................................................................................................................................37
Barnett v. Chelsea & Kensington Hospital Management Committee [1968] UK – The ‘but for’ Test...........................38
McGhee v. National Coal Board [1972] UK – Material Contribution............................................................................38
Wilsher v. Essex Area Health Authority [1988] UK.......................................................................................................39
Snell v. Farrell [1990] SCC............................................................................................................................................40
Clements v. Clements [2012] SCC.................................................................................................................................41
Cook v. Lewis [1951] SCC............................................................................................................................................42
Lambton v. Mellish [1843] UK......................................................................................................................................43
Sindell v. Abbott Laboratories et al. [1980] SC of California.........................................................................................43
BC v. Imperial Tobacco Canada Ltd. [2005] SCC..........................................................................................................44
Sunrise Co v. Lake Winnipeg [1991] SCC.....................................................................................................................45
Gregg v. Scott [2005] UK..............................................................................................................................................46
DEFENCES.................................................................................................................................................................46
CONTRIBUTORY NEGLIGENCE..................................................................................................................................47
Butterfield v. Forester [1809] UK..................................................................................................................................47
Negligence Act, RSO 1990 c N.1...................................................................................................................................48
Froom v. Butcher [1975] UK.........................................................................................................................................48
VOLENTI NON FIT INJURIA........................................................................................................................................49
Lambert v. Lastoplex Chemicals [1972] SCC................................................................................................................49
Dube v. Labar [1986] SCC.............................................................................................................................................50
Priestly v. Gilbert [1973] Ontario Court of Appeal.........................................................................................................50
ILLEGALITY...............................................................................................................................................................51
Hall v. Hebert [1993] SCC.............................................................................................................................................51
NEGLIGENT STATEMENTS..................................................................................................................................52
Candler v. Crane Christmas & Co [1951] UK................................................................................................................53
Hedley Byrne & Co Ltd v. Heller [1964] UK.................................................................................................................54
Queen v. Cognos Inc. [1993] SCC.................................................................................................................................56
Spring v. Guardian Assurance plc [1994] UK................................................................................................................57
Henderson v. Merrett Syndicates [1994] UK..................................................................................................................57
Haig v. Bamford et al. [1977] SCC................................................................................................................................58
Caparo Industries v. Dickman [1990] House of Lords....................................................................................................59
Hercules Managements Ltd. v. Ernst & Young [1997] SCC..........................................................................................60
ECONOMIC LOSS....................................................................................................................................................61
Weller v. Foot and Mouth Disease Research Institute [1966] UK..................................................................................62
Spartan Steel [1973]....................................................................................................................................................... 63
Caltex – Australia...........................................................................................................................................................64
Canadian National Railway Co v. Norsk Pacific Steamship Co [1992] SCC..................................................................64
Winnipeg Condominium Corporation No 36 v. Bird Construction Co [1995] SCC.......................................................67
White v. Jones [1995] UK..............................................................................................................................................69
Checo v. BC Hydro [1993].............................................................................................................................................70
Martel Building Ltd v. Canada [2000] SCC...................................................................................................................72
PSYCHIATRIC HARM.............................................................................................................................................72
Alcock v. Chief Constable of the South Yorkshire Police [1991] UK............................................................................73
White v. Chief Constable of South Yorkshire Police [1999]..........................................................................................75
Tame v. New South Wales; Annetts v. Australian Stations Pty [2002] Australia...........................................................76
Mustapha v. Culligan of Canada Ltd. [2008] SCC.........................................................................................................77
WRONGFUL LIFE....................................................................................................................................................79
MacKay v. Essex Area Health Authority [1982] UK.....................................................................................................79
Paxton v. Ramji [2008] Ontario Court of Appeal...........................................................................................................80
Kealey v. Berezowski [1996] Ontario Supreme Court....................................................................................................82
McFarlane v. Tayside Health Board [2002] UK.............................................................................................................83
Parkinson v. St James and Seacroft University Hospital NHS Trust [2002] UK............................................................85
 Rees v. Darlington Memorial Hospital NHS Trust [2003] UK.......................................................................................86
INFORMED CONSENT............................................................................................................................................86
Reibl v. Hughes [1980] SCC..........................................................................................................................................87
White et al v. Turner et al. [1981]...................................................................................................................................89
Hollis v. Dow Corning Corp [1995] SCC.......................................................................................................................89
NONFEASANCE........................................................................................................................................................91
Childs v. Desormeaux [2006] SCC.................................................................................................................................92
Just v. British Columbia [1989] SCC.............................................................................................................................93
Jane Doe v. Metropolitan Police [1990].........................................................................................................................95
R v. Imperial Tobacco Canada Ltd [2011] SCC.............................................................................................................96

Damages
General Damages
 Damages that have not yet been incurred
 Future earnings, future medical costs etc.
o Important Distinction: Courts are compensating for loss of earning capacity and not actual loss of earnings
(impossible to know the exact amount that someone would have earned – how should we arrive at this
estimate? This is often done through generalizations based on similar types of people – can be problematic)

Special Damages
 Damages that have already been incurred
 Money that has already been spent, earnings that have already been lost etc.

General Information on Damages

 The plaintiff has the onus of proving damages
 The plaintiff has a duty to attempt to mitigate their damages
 Once damages are awarded, they are static and not subject to subsequent re-evaluation
o If the plaintiff’s situation improves, the defendant is not entitled to a reimbursement
o If the plaintiff’s situation deteriorates, they are not entitled to further damages
 Generally, when damages are awarded, they are given in lump sum or “once-and-for-all” payments
o Lump sums are the preferred method of damage disbursement for a variety of reasons:
 Helps in an administrative sense
 Avoids “over-paying the malingerers” (people who take advantage of the system)
 Relieves the defendant of continual responsibility (they pay once, and they are done)
 Assures that the money is actually awarded to the plaintiff (particularly if the defendant is unable
to maintain future installments)
o Payments in installments are permitted if the parties are able to agree to these terms on their own
o For further information on lump sum v periodic payments, refer to Watkins v Olafson (1989)
 In tort, the goal of damages is to restore the plaintiff to the position in which they would been, had the accident not
occurred
o In cases of personal injury, complete restoration is not possible (plaintiffs are often left with permanent
injuries)
 Sums of money are the only damages that the law can offer
o It is reasonable to assume that damages are also intended to act as some form of deterrent (general and
specific)
 Does a fine really fulfill this purpose? Often, it is just the cost of doing business
 Once damages are awarded, the plaintiff is free to use them in any manner they wish

Property and Personal Injury

 Property is easier to value because it is a capital asset
 When assessing damages of property, there are three approaches that you can take (the courts will use the cheapest of
the three options)
o Market value
 o Repair cost
o Replacement cost
 The law is generally very poor at considering items of sentimental value
o Worth its market value
 This principle is more palatable for property, but the same principles are applied to personal injury
o Lives are quantified by their market value (capital asset)
o This is a very troublesome reality

Insurance
 Doctrine of Subrogation
o The substitution of one person or group by another in respect of a debt or insurance claim, accompanied by
the transfer of any associated rights and duties
o If you get paid out, insurance companies can claim over against any other benefits you receive, with regards
to that incident
 There are various sources of collateral benefits that someone might receive when they are injured
1. Charity: Used to be significant as it was the only thing that could help people when they were injured (non-
deductible)
2. Private Insurance: (non-deductible as per Bradburn v Great Western Railway Co.)
3. Work-Related: (non-deductible as per majority decision in Cunningham v. Wheeler)
4. Social Assistance: (deductible as per M.B. v. British Columbia)
 If a plaintiff is injured and receives benefits from one of these sources, we can:
 Allow them to pocket the benefits
 Not a consideration in their tort claim
 If they win their case, they get to keep their benefits plus whatever they recover in their claim
(double-recovery)
 Force them to bring them into account
 They have to deduct the benefits from their claim
 Tension: Plaintiffs should not be allowed to receive more than the losses they suffered (double-recovery) but
defendants should also be obliged to pay for all of the losses that they caused (deterrence)

Calculating Damages
Andrews v. Grand & Toy Alberta Ltd. [1978] SCC
Illustrates the framework for calculating damages
Facts Andrews was a 21-year-old unmarried man working as an apprentice carman, who was rendered a quadriplegic as a result of
a car accident. Despite the physical injuries that Andrews sustained, he remained in full control of his mental facilities. The
defendant, Anderson and his employer, Grand & Toy Alberta Ltd were found partially liable for the accident. Andrews
himself was also found to be contributorily negligent and thus deemed to be 25% liable as well. The trial judge awarded a
sum of $1,022,477.48 to the plaintiff, which the Appellate Division of the Supreme Court of Alberta subsequently reduced to
$516,544.48. The case was appealed to the SCC.
Issue(s)  Did the Appellate Division err in law in their assessment of damages?
 Does Andrews require home-care, or could he settle for (cheaper) hospital care?
 Does the court have to consider what the injured party might do with the awarded money?
 Can there be a limit on non-pecuniary damages?
Decision Appeal allowed in part – award changed to 75% of $817,344 ($613,008)
Reasons Dickson J
 “No appellate court is justified in substituting a figure of its own for that awarded at trial simply because it would have
awarded a different figure if it had tried the case at first instance. It must be satisfied that a wrong principle of law was
applied, or that the overall amount is a wholly erroneous estimate of the damage”
 Andrews is a “capital asset” that has been lost – “we must now gaze more deeply into the crystal ball” to assess his
damages
 There are three parts in assessing damages:
 1) Cost of Future Care
o This was a big issue in the Andrews case – what is a reasonable cost of future care, especially when there are
two options (home care v institutional care)
o Plaintiff wanted to remain at home in order to retain some aspects of his prior life (more expensive option)
 o Defendants argued that they should only have to pay for him to be in an institution (cheaper option)
o Dickson J: There is nothing unreasonable about choosing to be at home (quality of life is a consideration here
and not just basic care)
 This is significant as it allows plaintiffs the right to choose within certain bounds
 Awards for damages must be “moderate and fair to both parties”
o Life Expectancy: The cost of home care was quantified at $4,135/month and the remainder of life expectancy
was quantified at 45 years or 540 months (reduced from 50-45 years to reflect post-accident)
 Need for total cost of future care: $2,232,900
o Contingencies of Life: 20% discount applied to account for accidents and/or illness that may have occurred in
the future, even if the accident had not occurred
 Hutch thinks this number is ridiculously high (implies that an average person would be sick 1 out of
every 5 days)
o Capitalization: 7% discount applied
 As a general rule, the amount of damages should equal the precise amount that, if invested properly
over the remainder of life expectancy, will allow for monthly withdrawals and no more and no less
 Plaintiffs should not be able to invest their damages and generate more than they are entitled
to
 That being said, it is also important to set off investment interest with inflation (the value of money
will also decrease in value over time)
 Rules of Civil Procedure RRO 1990, reg 194, rule 53.09: “The discount rate to be used in
determining the amount of an award in respect of future pecuniary damages, to the extent that it
reflects the difference between estimated investment and price inflation rates, is 2½ per cent per year”
o Amount given for cost of future care: $557,232
 2) Prospective Loss of Earnings
o Compensation must be made, not for loss of earning, but for loss of earning capacity
o Human lives are valued as capital assets on the market
 Trajectory in life matters: The court assumes that Andrews would have continued on the same career
path that he was on at 21
 Level of earnings was estimated as between his ‘current’ and ‘max potential’ earnings -
$1,200/month
 Gender matters: Women earn $0.80 on the $1.00 compared to men
 If Andrews had a twin sister in the exact same situation as he, she would have been assigned
a lesser value
 Ethnicity matters: visible minorities earn even less than women
o The amount is reduced to $564 to account for costs of basic expenses (rent, food, etc.)
o The court assumes that Andrews would have retired at 55 years of age (roughly 30 years to go)
o Contingencies of Life: 20% discount applied to factor in the possibility of being fired, losing your job etc.
 Note: why don’t contingencies consider positive changes?
 Hutch believes that contingencies add insult to injuries
o Capitalization: 7% discount applied for the same reasons listed above
o Amount given for prospective loss of earnings: $69,981
 3) Non-Pecuniary Loss
o Money to ease pain and suffering
o “The monetary evaluation of non-pecuniary losses is a philosophical and policy exercise more than a legal or
logical one” – there is no objective formula for its calculation
o Dickson J. sets this as an upper limit on non-pecuniary damages and says that this should only be exceeded in
very extreme circumstances
 Once damages have been awarded for future care of injuries and disabilities, large amounts of non-
pecuniary damages should not also be given out
 Damages should be calculated based on alleviating the effects on victims and allowing him/her to live
a tolerable lifestyle as compared to the original lifestyle prior to the accident
 The sizes of awards have been inconsistent, so it is reasonable for the Court to set limitations
o Andrews is awarded $100,000
 Now the limit is up to over $200,000
 Andrews ultimately received $613,008
o He only received 75% of the total amount ($817,344) because he was found to be 25% liable for the accident
 The SCC also included in their judgment that:
 o Andrews should have his costs in SCC and trial court paid by Grand and Toy
o Grand and Toy should have their costs in the Court of Appeal paid by Andrews (in respect of the finding of
contributory negligence on the part of Andrews)
o Andrews gets a further hit because he is not going to recover all of his legal fees
Ratio  Reasonable and fair compensation of victims is the Court’s paramount concern in awarding damages in cases where the
victim has been severely injured. These damages should not be awarded so as to over-compensate the victim (and
therefore disadvantage the defendant).
 This case outlines the framework for calculating damages (demonstrates that it is a very unfair system, but it is
considered to be “the best way” of doing it)
Notes  Dickson believes the lump-sum system of damages is irrational but believes it is the responsibility of the legislature to
implement a system that allows for periodic review of damages
 Hutch is very against the idea that damages should be reduced by contributory negligence – he sees this as a double-
whammy – shouldn’t the fact that Andrews is a paraplegic balance this out?
o Also, it is important to consider that in the majority of cases, it is an insurance company paying out and not the
defendant personally (why should they get this benefit?)
 The common law knows the price of everyone and the value of no one”
o If other people were in the car with Andrews and sustained identical injuries, they would have received
different damages
 Tort law offers perverse incentives
o It would have been cheaper to kill Andrews than it would have to render him a paraplegic (no future medical
care expenses, etc.)
 It is difficult to calculate prospective earnings because people, especially young people, may have changed jobs if the
accident hadn’t happened.
o Doesn’t take into consideration upwards movement in a company, different career paths, etc.
o Taking a person’s current job may be a misleading way of calculating – but the Court is stuck, this the best
way of calculating.

Watkins v. Olafson [1989] SCC

Periodic Payments
Facts Watkins got into an accident with Olafson on a highway that was under construction. An action was brought against Olafson
(the driver of the van), Aitkenhead (the owner of the van) and the provincial government. The trial judge awarded a lump
sum payment for damages. The Court of Appeal set aside the lump-sum award and ordered instead that the provincial
government pay a monthly payment.
Issue(s) In the absence of enabling legislation or the consent of all parties, can or should a court order a plaintiff to forego his
traditional right to a lump-sum judgement for a series of periodic payments?
Decision No – courts should stick to lump sum payments
Reasons McLachlin J
 The Court should not order periodic payments for several reasons:
o They want to make a clean break between the plaintiff and defendant (not force them to have an ongoing
relationship)
o The defendant might not have the funds in the future to continue to make the payments
o There would be undue burden on both parties and the court system because they would have to keep revisiting
the issue and recalculating the costs
 Generally speaking the judiciary is bound to follow precedents and legislation
o Over time, the law in any given area may change; but the process of change is a slow and incremental one,
based largely on the mechanism of extending an existing principle to new circumstances.
o While it may be that some judges are more activist than others, the courts have generally declined to introduce
major and far-reaching changes in the rules hitherto accepted as governing the situation before them
 Major changes in the law should be predicated on a wider view of how the rule will operate in a broad generality of
cases
o The court is incapable of fully appreciating the economic and policy issues
 The well-established limits on judicial law-making powers as well as the complexities associated with introduction of
the concept of periodic payments into the law, preclude the court from ordering periodic reviewable payments for future
cost of care in the stead of lump-sum judgment to which the plaintiff is entitled under existing legal principles
Ratio  Courts should prefer lump sum payments of damages over periodic payments, unless there is a structured settlement
 between the parties
Notes

Rules of Civil Procedure RRO 1990, reg 194, rule 53.09

Rules of Civil Procedure RRO 1990, reg 194, rule 53.09: “The discount rate to be used in determining the amount of an
award in respect of future pecuniary damages, to the extent that it reflects the difference between estimated investment
and price inflation rates, is 2½ per cent per year”

Arnold v. Teno [1978] SCC

Prospective loss of future earnings of a child
Facts Diane Teno (4-year-old girl) was hit by a car while crossing the street and as a result, sustained considerable physical and
mental impairments. Diane’s mother was a teacher, earning in excess of $10,000/year. In the absence of any other guide, the
lower court used the same-gendered parent as an indication of the child’s earning potential.
Issue(s) What is the appropriate method for determining the prospective loss of future earnings of a child?
Decision Trial judge erred in this calculation
Reasons  The lower court’s decision to rely solely on the income of her mother in determining future earning potential was
unacceptable because it was mere speculation
 The court decided that $10,000 would be too high (unfair to the defendant) but $5000 would be too low, as it would
place the girl below the poverty line (unfair to the plaintiff)
 They split the difference and awarded lost earnings of $7,500/year subject to a contingency discount
Ratio  When determining the prospective loss of future earnings of a child, you cannot rely merely upon speculation and you
cannot therefore, rely solely on the income of a parent
o Calculations must be fair to the plaintiff and the defendant
Notes  Hutch thinks this number is random and arbitrary (they just decide to split the difference of what the two sides are
asking for)
 Also, why are we looking at mom here and not the dad?

Toneguzzo-Norvell v. Burnaby Hospital [1994] SCC

Facts Jessica Teresa Toneguzzo-Norvell suffered severe disabilities due to oxygen deprivation during her birth. The physician and
hospital admitted liability for her injuries and the sole issue in this case was the assessment of damages. Both the trial judge
and the Court of Appeal (having only been asked by the plaintiff’s counsel to apply a female earning table) calculated the
lost earnings at a higher rate than the female earnings chart, but lower than the male levels, to adjust for a perceived trend
toward more equal wages. Counsel for Jessica argued that both judges had erred and urged the SCC to set aside their award
for lost future earning capacity and to substitute an award based on male earning tables.
Issue(s) Can a male earnings chart be used to calculate future lost wages for a female plaintiff?
Decision Maybe but not in this case
Reasons  The SCC rejected the request to substitute an award based on male earning tables and said:
o “Due to the manner in which this case was presented at trial, we are not in a position to entertain the arguments
advanced for the first time in this Court that female earning tables should be replaced by other alternatives.
Consideration of these arguments must await another case, where the proper evidentiary foundation has been
laid.”
Ratio  The courts can only award damages based on evidence before them and cannot actively try to resolve societal inequities
in damages
Notes Hutch:
 Are we in the game of law or in the game of justice?
 Is it enough for the court to say, “it’s a bad world out there – but what can we do?”
 Similar to the decision in Watkins v. Olafson regarding the separation of powers between the judiciary and the
legislature
 Courts technically do not have law-making powers in Canada, but you would be a fool to believe this because they make
law all the time
 Migdal Insurance v. Abu Hana [2005] SC of Israel

Facts Rim Abu Hana was injured in a road accident when she was five months old. The district court, in assessing her damages for
loss of earning capacity, considered her ethnic origin and socio-economic background.
Issue(s) What is the proper method of calculating the future lost wages of an infant?
Ratio  Damages for an injured minor’s loss of earning capacity should be computed according to the presumption that the
minor would have earned the equivalent of the national average wage, regardless of sex, religion, ethnicity, etc.
o This can be rebutted only when there is evidence of considerable weight, showing that there is a high
probability that the minor would have entered a certain profession in the future
Notes  This case stands in stark contrast to how Canada approaches tort claims
Hutch:
 Is it a good plan to use the national average for infants?
o It is impossible to predict the future; it is better to average out (some people will benefit, some will not)
 Should we scrap the whole system for claims of all ages and rely on the average?
o Those who are rich are going to be okay anyways, so maybe we should be more generous and progressive
(some people will be lifted up and that should be seen as a good thing)
o Current system in Canada reinforces that we are all capital assets in the market
 The case illustrates the Socialist v. Capitalist approach to damages

Bradburn v. Great Western Railway Co. [1874] UK

Ratio  In cases of private insurance, benefits received should not be deducted from the calculation when assessing damages
Notes  The rationale is that the plaintiff would have already paid premiums to the insurance company, so they should receive
the benefits of their foresight

Cunningham v. Wheeler [1994] SCC

Facts Cunningham was struck by a car in 1988 and was injured. At the time of the accident, he had been an employee of BC Rail
for around 25 years and, as he was off work for 20 weeks, had collected disability benefits pursuant to a collective
agreement. The hourly wage package was made up of an hourly rate of pay together with collateral benefits. Disability
benefits recovered did not have to be paid either to the employer or to the insurance company managing the plan. The trial
judge held that the payments should not be deducted in calculating the amount payable by the Wheelers for the wages lost by
Cunningham as a result of his injuries, as he had established that the indemnity benefits were paid for him as part of his wage
package. The Court of Appeal reversed the judgment, determining that since there was no subrogation right in the employer,
and the direct funding for the disability benefits came from the employer, the plan was not in the nature of a private
insurance policy and the funds received should be deducted from the damage award.
Issue(s) Should disability benefits provided by a collective agreement be exempted from deduction from an amount recovered in
damages for loss of wages?
Decision Appeal allowed
Reasons Cory J
 While a plaintiff in a tort action is not generally entitled to a double recovery for any loss arising from injury, the
disability benefits obtained by Cunningham, as a result of his collective bargaining agreement, were in the nature of a
private policy of insurance and should not be deducted from the claim for lost wages.
o To demonstrate this, there must be evidence of some type of consideration given up by the employee in
return for the benefit
o In this case, a willful reduction in the hourly rate of pay sufficiently fit this requirement (benefits were
obtained and paid for just as much as if he had bought and privately paid for a policy)
McLachlin J (Dissent)
 Not similar enough to private insurance in Bradburn and therefore, benefits should be deductible
 It is important to prevent double-recovery
o Fundamental principle of damages it that a plaintiff is entitled to recover to the full extent of the loss, and
no more.
Ratio If payments received as part of an insurance package were paid for in some manner by the injured party (either directly, or in
some manner of reduced wages, etc.) then they should not be deducted from the calculation of lost wages when assessing
 damages.
Notes Hutch: Significant Issue
 The existence of private insurance is affected by socio-economic status
o This is particularly problematic when you compare the private insurance group to the social assistance
group
o Social assistance group is forced to deduct their benefits, when in reality they are the ones who can’t
afford this deduction
o Their claims are also less to begin with than those in the private insurance group (idea of ‘capital assets’
on the market)

MB v. British Columbia [2003] SCC

Reasons McLachlin J
 Social assistance was a form of income replacement and therefore, should be deducted from the award of tort damages
 The only way in which social assistance benefits can be non-deductible from common law is if they fit within the
charitable benefits exception, or if this Court carves out a new exception
o Otherwise, retention of benefits would amount to double-recovery
 Social assistance does not fit within the charitable benefits exception
o Neither of the rationales for the exception – that individuals who wish to help those who are in need
should not be discouraged from doing so and that it is difficult to assess the monetary value of certain
forms of private charity – seems to apply in the case of social assistance benefits made by the government
Ratio  Social assistance is a form of income replacement and therefore, should be deducted from the award of tort damages
Notes  Consistent with her dissent in Cunningham v. Wheeler

Standard of Care
 This focuses solely on the actions of the defendant (it doesn’t matter what everyone else is doing, it only matters
whether what you were doing was reasonable – aspirational quality)
 Objective but not a universal standard (applies the same way to people within categories, i.e. professionals)
o What happens when people engage in certain activities that should be done by a professional?
 They will be held to the same standard because a reasonable person would know not to take part in
activities that they are not educated in
Summary on SOC
The Objective Standard
Vaughan v. Menlove [1837] UK

Facts Menlove built a hay stack near the edge of his property with a “chimney” to prevent the risk of fire. He was repeatedly
warned that it constituted a fire risk, but he said that he would “chance it”. The hay stack caught on fire and burnt down
two of his neighbor Vaughan’s cottages. Vaughan seeks damages in negligence. At trial, Menlove was held liable because he
failed to act reasonably “with reference to the standard of ordinary prudence”. He appealed stating that he should not be
held liable for not possessing the “highest order of intelligence.” 
Issue(s) Should the defendant be held liable because he failed to act reasonably with respect to the objective standard of
intelligence, or should his personal intelligence be considered? 
Decision Appeal dismissed
Reasons Tindal J
 The standard is of an ordinary or prudent person, and that could be described as an objective standard
 To allow the judgment of each individual to be based upon their own personal level of intelligence would be subjective
and too variable.
o “The question ought to have been whether the Defendant had acted honestly and bona fide to the best
of his own judgment. That however, would leave so vague a line as to afford no rule at all, the degree of
judgment belonging to each individual being infinitely various”
 The court “ought to adhere to a rule that requires in all cases a regard to caution such as a man of ordinary prudence
 would observe” 
Ratio  This is the first instance of the test of the “reasonable person” being affirmed as the correct method in negligence
Notes  Is this case strong precedent? Two views:
o Case is extremely old (it has been around for 180 years) – it is a foundational part of the common law, so
we should respect and follow it
o It is outdated and has nothing to do with modern times
 As a general rule, this case implies that you do not have to do the best of your ability
o You simply have to do what a person of ordinary prudence would do
 Alternatively, though, saying “you did your best” is not enough
o So, if you are not up to doing something in a reasonable way, don’t do it
 If people are acting in a given position, they should be held to the standard of an individual in
that position
 Ex. CLASP (law students offering free legal advice) – what is the standard that they should be
held to? Kind of scary
o A good professional knows when to turn something down that is not within their expertise
 How do we come up with a standard of ordinary prudence? 
o Not saying do what the average person would do 
o Ex. Reasonable person in a car is someone who follows the speed limit 100% of the time 
 Nobody does this, but the law would say that this is the reasonable standard 
o There is an aspirational aspect: it’s not what people do, it’s what people should do 
o Value laden and normative – not an averaging out of what we do 
o Men’s car insurance is higher than women’s at 18 because there is an idea that they are less cautious 
 Does gender have a significance in standard of care? 
 Would adding women into the mix “a person of ordinary prudence” increase the standard? 
o Should you judge the farmer as a standard of an ordinary prudent man/person or should you judge him
based on a standard of an ordinary prudent farmer? 
 Ex. Doctors – if someone is doing a surgery, the doctor can’t say that they lived up to the
standard of an ordinary prudent person, you need to live up to the standard of an ordinary
prudent doctor 
 Although the test is objective, it is not universal 
o Another issue is that most defendants are corporate entities 
 Why would we judge corporations on this notion of a person of ordinary prudence? 
 If we asked corporations to perform to the best of their ability and not just the standard of an
ordinary prudent person, the standard would go up 
 Shouldn't we ask this? 
o If we hold a top-doctor to a standard of a reasonable prudent doctor, then we are holding them to a lower
standard than they are capable of – is that right? 

Roberts v. Ramsbottom [1979] UK

Facts Ramsbottom drove into Roberts as she was emerging from her car, injuring her, her daughter, and wrecking her car. Shortly
before, he had rear-ended a van and knocked a boy off his bicycle. Ramsbottom had suffered a
cerebral hemorrhage, unbeknownst to him, that caused him to lose control of his abilities. He had never had any previous
symptoms and did not realize at the time that he was unfit to drive. Ramsbottom claimed that he should not be held
responsible for his actions, as a reasonable person would not expect to be impaired in this way.
Issue(s) Does impaired consciousness excuse someone from the standards of a prudent person?
Decision Judgment for the plaintiff
Reasons Neill J
 Ramsbottom did not have a total loss of consciousness and, thus is liable in negligence.
 He also should have realized his unfitness to drive after the previous accidents. He was in no way morally to blame, but
that is irrelevant to the question of legal liability. 
Ratio  Moral blameworthiness is not relevant to liability
 Impairment of judgment does not provide a defense, unless the impairment is to a level of involuntariness/automatism
Notes
 Mansfield v. Weetabix [1998] UK

Facts A lorry belonging to the defendant was being driven by one of their employees, who subsequently crashed into the
plaintiff’s shop causing extensive damage. Unbeknownst to the employee, he suffered from malignant insulinoma, a
condition which resulted in a hypoglycemic state, which impaired his ability to drive, and that, it was accepted, had caused
the accident. It was also accepted at first instance that the employee, had he been aware of his condition, would not have
continued to drive. The defendant appealed against a judgment holding them liable in negligence.
Issue(s) Should a driver suffering from a condition which impairs his/her ability to drive be held to the same standard as the
reasonably competent road user or, alternative should the effect of the condition be considered when determining the
relevant standard of care? 
Decision Appeal allowed – judgment in favor of the defendant
Reasons Leggatt J
 The condition of the employee needed to be considered when determining the applicable standard of care to be
expected of him.
 This was a civil case, not a criminal prosecution, and so it was not necessary to prove that the employee was acting as
an automaton (without any awareness of his actions).
o That would be to impose a test of strict liability, whereas the employee was merely under a duty to attain the
standard of a reasonably competent driver who is unaware he is suffering from a condition that impairs his
ability to drive.  
 He did not know and could not have reasonably known of his infirmity which was the cause of the accident (therefore he
was not at fault – his actions did not fall below the SOC required
Ratio  Overturns the rule established in Roberts v. Ramsbottom and states that the situation must be considered when
considering the reasonable standards that must be met to avoid liability
Notes  There has to be an assumption that the defendant didn’t know that they were suffering from a medical condition 
o Court is clear: if you know that you are suffering before you get in the car, you will be liable 
 Plaintiffs position: it is an objective standard and you didn’t live up to that standard 
 Court in Weetabix: the person lost the ability to be aware of the standard (moral problem with imposing liability).  
 What is the argument that the completely blameless victim should carry the cost of the injury? 
o That is what happens when you worry about moral blameworthiness 
o Also, they were in the car – so they have insurance 
 Tort Law is all about: Should the defendant be liable, and should the plaintiff get compensation? 
o Hutch thinks the answer to this should always be that the plaintiff gets compensation (that sucks for the
defendant but it's an objective standard) 

Children
McHale v. Watson [1966] Australian HC

Facts McHale and Watson were playing tag. Watson was 12 years old at the time. At the end of the game, Watson threw a
sharpened metal rod at a piece of wood and it bounced off and hit McHale in the eye, causing permanent blindness. McHale
sued for damages and was unsuccessful at the lower court, which she appealed. 
Issue(s) Should children be assessed based on the adult SOC?
Decision Appeal dismissed – judgment in favor of the defendant
Reasons McTiernan J (majority)
 The appeal was argued on two main grounds
o The trial judge was in error in holding that the standard of care for Barry is different than if he were over 21
years
o The trial judge should have made a finding of negligence if he applied the standard appropriate to a 12-year-
old boy
o Neither of these grounds hold
 There is ample American authority in favor of applying a lower standard of care in cases involving the primary
negligence of young children.
o It has been stated that a child’s care must be measured by its intelligence.
 o It has also been stated that a child is required to exercise only that degree of care which the great mass of
children of the same age ordinarily exercise under the same circumstances, taking into account the experience,
capacity, and understanding of the child.
 In the present case we are concerned with a boy of the age of twelve years and two months.
o The trial judge considered that the defendant, being a boy of twelve years, did not have enough maturity of
mind to foresee that the dart might glance off the post in the direction of Susan if he did not make it hit the post
squarely, and that there was a possibility that he might not succeed in doing so.
o There is no ground for disagreeing with the that decision
 The appeal should be dismissed.
Kitto J (concurring)
 Defendant does not escape liability by proving that he is abnormal in some respect which reduces his capacity for
foresight or prudence.
o But, he can rely in his defense upon a limitation upon the capacity for foresight or prudence, not as being
personal to himself, but as being characteristic of humanity at his stage of development and in that sense
normal.
o Thus, he appeals to a standard of ordinariness, to an objective and not a subjective standard
o The normal capacity to exercise foresight and prudence necessarily means the capacity which is normal for a
child of the relevant age
 In the absence of relevant statutory provision, children, like everyone else, must accept as they go about in society the
risks from which ordinary care on the part of others will not suffice to save them.
o One such risk is that boys of twelve may behave as boys of twelve; and that, sometimes, is a risk indeed.
 The appeal should be dismissed.
Menzies J (dissent)
 The fundamental principle of the law of negligence is that the standard of care fixed by the law to determine actionable
negligence is an objective standard
o That is, the care to be expected of an ordinary reasonable man.
 The law of negligence is primarily concerned with the circumstances under which a person who suffers damage may
recover compensation
o There is no necessary connection between legal liability to make compensation and moral culpability.
 My conclusion is that as the duty of care which the respondent owed to the appellant was to take such care as an
ordinary reasonable man would have taken in the circumstances, the appeal should succeed
 If, contrary to my opinion, the conduct of the respondent ought to be judged by the standard of a reasonable boy rather
than a reasonable man
o I would still conclude that the respondent had been negligent
 A reasonable boy would not throw a three-inch piece of metal, head high, in the direction of another
person
 The appeal should be allowed.
Ratio  When the defendant in a negligence claim is a minor, it is appropriate to consider his/her age as a factor for
reasonableness in determining negligence
Notes  The court assumes that if Barry had been 21, he would have been found negligent and liable
 Hutch thinks this is a ridiculous inquiry, what is the SOC of 12-year-old boys? (this is an oxymoron – boys who are 12
are erratic and unpredictable)
o McHale not getting compensation is a tougher break than imposing liability on Watson
 Hutch likes the dissent because the objective standard gets McHale compensation AND it is not that outrageous to say
that a reasonable 12-year-old boy might have known that it was dumb to throw a piece of metal in a confined space
anyways

R v. Hill [1986] SCC

Facts Hill was convicted of second-degree murder for a fatal stabbing. He was sixteen when the incident occurred
and testified that he had reacted to the victim’s uninvited homosexual advances. He relied on the defences of provocation
and self-defence. The Court of Appeal ordered a new trial because the trial judge failed to charge the jury that the objective
“ordinary person” standard for the defence of provocation had to take into account the age and sex of the accused. 
Reasons Wilson J (dissent)
Ratio  The standard against which children’s actions are measured must be such as can logically culminate in the objective
 standard of the ordinary person upon their arrival at full adulthood.
 There must be incremental adjustments to the standard of care expected of minors.
 Older children are therefore, expected to have a higher sense of foreseeability and prudence than younger children
would.  
o With maturation comes expectations of foreseeability and prudence. 
Notes

McErlean v. Sarel [1987] Ontario Court of Appeal

Facts The case involves a collision between two trail bikes driven by teenagers
Issue(s) What SOC applies?
Reasons  The court summarized the position of children as follows
o As a general rule in determining negligence, children are not required to conform to the standard of conduct
which may reasonably be expected of adults.
o Their conduct is judged by the standard to be expected of children of like age, intelligence and experience.
 There are exceptions to this general rule
o Where a child engages in what may be classified as an “adult activity,” he or she will not be accorded special
treatment, and no allowance will be made for his or her immaturity.
o When a society permits young people of 15 or 16 the privilege of operating a lethal weapon like an automobile
on its highways, it should require of them the same caution it demands of all other drivers.
Ratio  Where a child engages in what may be classified as an “adult activity,” he or she will not be accorded special treatment,
and no allowance will be made for his or her immaturity
Notes

Reasonable Care
Richard Posner “A Theory of Negligence” [1972]
 Negligence: the failure to exercise the care of an ordinarily prudent and careful man – has been the dominant
standard of civil liability for accidents for the last 150 years 
 Accident cases, mainly negligence cases, constitute the largest item of business on the civil side of the nation’s
trial courts 
 We lack a theory to explain the social function of the negligence concept and of the fault system of accident
liability that is built upon it 
 Orthodox view of the negligence concept 
o Until the nineteenth century, a man was liable for harm caused by his accidents whether or not he was at
fault; he acted at his peril 
o This no-fault standard of liability gave way in the 19th century under the pressure of industrial expansion
and the individualistic philosophy that could conceive of no justification for shifting losses from the
victim of an accident unless the injurer was blameworthy (negligent) and the victim blameless (not
contributorily negligent) 
 Result: accident costs “externalized” from the enterprises that caused them to workers and other
individuals injured as a byproduct of their activities 
 System forgets the fact that victims need compensation regardless of who is at fault 
 Judge Learned Hand’s economic formulation of the negligence standard 
o In a negligence case, the judge (or jury) should attempt to measure three things: 
 The magnitude of the loss if an accident occurs 
 The probability of the accident’s occurring 
 The burden of taking precautions that would avert it 
o When the cost of accidents is less than the cost of prevention, a rational profit-maximizing enterprise will
pay tort judgements to the accident victims rather than incur the larger cost of avoiding liability 
 The dominant function of the fault system is to generate rules of liability that if followed will bring about the
efficient – cost justified – level of accidents and safety 
o Because we do not like to see resources squandered, a judgment of negligence has inescapable overtones
of moral disapproval, for it implies that there was a cheaper alternative to the accident 
o Where the measures necessary to avert the accident would have consumed excessive resources, there is
 no occasion to condemn the defendant for not having taken them 
 The judgment of liability depends ultimately on a weighing of costs and benefits 

Hutch
 Bring to law the tools and techniques of economics 
o Seems pretty good for contracts 
o Richard Posner suggests that this kind of thinking can be applied to negligence law, in particular
to standard of care 
 We live in a world with scarce resources and we need a metric for thinking about how to allocate resources 
o People value different things 
o Very hard to compare relative preferences 
o The only way to do this and put a value on it is with money (people’s willingness to pay will indicate the
value) 
o Important point: Willingness to pay is constrained by your capacity to pay 
 In a world of accidents, we want to reduce accidents (they are costly – we know how costly they are because we
have dealt with cases like Andrews) 
o Society is losing his contribution, so we should try to arrange things so that there are less accidents
o Should we design our legal rules to reduce accidents and their costs? 
o The cost associated with accidents are not just the accident costs 
 To drive that figure down, we must increase prevention costs (precautions are not free) 
 If you want to save 10 dollars it would be silly to invest 11 dollars in doing so 
 When assessing an optimal level of accident cost, we have to balance off the prevention cost with accident cost 
o There will come a point when the cost of preventing the accident will cost more than allowing the
accident to occur 
o Losses will lie where they fall (plaintiffs must carry their own costs) unless the prevention costs are less
than the accident costs 
 What do we mean by accident costs? 
o L: The cost of the accident if it occurs (damages – as set out in Andrews) 
 Can't just assume that just because someone is negligent, there is going to be a loss 
o P: Probability of the accident occurring 
 Discounted by the chances that it is going to happen 
o L x P =? 
 If you invest more than this amount, then you are wasting resources (inefficiency) 
 You want legal rules that enforce defendants to invest this amount – no more and no less 
 Seems like a bad plan (puts a number on everyone) but it really just formalizes what Lord Reid says and puts it
into an equation 
o Is it reasonable to say that plaintiffs who lose are sacrificing themselves for the greater good? 
 Do we condone the idea of being placed into an equation like this? 
 Reinforces the commodification of people and injury 
 A perfect world is not one where there is no risk 
o Who gets to decide the level of risk that we are exposed to? - the defendants are making the decision for
us 
o Victims are just an item on a balance sheet

Leslie Bender “A Lawyer’s Primer on Feminist Theory and Tort” [1988]

 When the standard of care is equated with economic efficiency or levels of caution, decisions that assign dollar
values to harms to human life and health and then balance those dollars against profit dollars and other evidences
of benefit become common place 
o The standard of care is converted into a floor of unprofitability or inefficiency 
o Under this model, people are dehumanized 
 There is another possible understanding of “standard of care”  
o We would convert the present standard of care of “a reasonable person under the same or similar
circumstances” to a standard of “conscious care and concern of a responsible neighbor or social
acquaintance for another under the same or similar circumstances” 
o The legal standard of care may serve as the minimally acceptable standard of behavior, falling which one
becomes liable 
  But the standard need not be set at the minimum 
o From a feminist perspective, the duty of care required by negligence law might mean “acting responsibly
towards others to avoid harm, with a concern about the human consequences of our acts or failure to act” 
o Have we gained anything from legally condoning actions that cause harm to others yet are economically
efficient? 
 The law can be a positive force in encouraging and improving our social relations, rather than
reinforcing our divisions, disparities of power and isolation 
 Bender promotes: Safety over economic efficiency

Richard Posner “Conservative Feminism” [1989]

 Bender’s suggestion to replace the “reasonable man” with the “caring neighbor” misunderstands the significance
of the “reasonable man”, or “reasonable person” rule in tort law 
o Its significance lies in preventing tortfeasors (victims of torts) from arguing that while the average person
could have avoided the accident, the actual party in the case could not have done so, because he had a
below-average capacity to take care 
o Human nature will not be altered by holding injurers liable for having failed to take the care that a caring
neighbor would have taken (people are what they are, and most neighbors are not caring) 
 The only effect of adopting Bender’s proposal would be to shift negligence liability in the direction
of strict liability (“caring neighbor” analogy is unnecessary when discussing “reasonable man”) 
o She may as well argue directly for strict liability on the ground that it is the more altruistic regime than
negligence (more compensation for accident victims) 
 Is strict liability more altruistic? 
o It is also more rule-like, less standard-like, less contextualist, less sensitive to the particulars of the
individual accident than negligence is
o Arguably less feministic and more masculine approach

Bolton v. Stone [1951] UK

Facts Stone was walking down a road past the fence of a cricket pitch. She was hit with a ball that was hit over the fence and was
seriously injured. Balls have only flown over the fence approximately six times in the last 30 or so years. The defendants
were found liable to which they appealed. 
Issue(s)  What is the nature and extent of the standard of care of a person who promotes on their land operations that may cause
damage to persons on an adjoining highway? 
 Is the risk small enough to ignore?
Decision Appeal allowed – not liable
Reasons  Defendants argued that they are reasonable and take precautions but only against things that are reasonable to take
action against 
o In this case, the risks were rare, and the preventative costs would have been very high 
Lord Reid
 The standard of care is not based on foreseeability alone – it also involves a consideration of the risks involved in the
action 
 The duty is based on the likelihood of damages in addition to foreseeability of harm. Although the defendants must
recognize reasonably foreseeable harms, defendants are not liable for ‘fantastic’ (totally unforeseeable) harms 
 The true test is not foreseeability of harm alone 
o Rejects the argument that as soon as one ball had been driven out of the field during ordinary business that the
Cricket Club should have realized that this might happen again and that injuries could result, and that they
should have done something to prevent potential harms 
 Test to be applied here is: whether the risk of damage to a person was so small that a reasonable man in the position of
the appellants, considering the matter from the point of view of safety, would have thought it right to refrain from taking
steps to prevent the danger.  
Lord Radcliffe
 “The law of negligence is concerned less with what is fair than with what is culpable, and I cannot persuade myself that
the appellants have been guilty of any culpable act or omission in this case...” 
Ratio  If the risk is sufficiently small, a reasonable person can refrain from taking precaution
Notes  Before Bolton v. Stone, there were two types of cases:
 o Those where, before the event, the possibility of its happening would have been regarded as so fantastic, that
no reasonable man would have paid any attention to it
o Those where there was a real and substantial chance that something like the event might occur, and a
reasonable man would have taken steps necessary to eliminate the risk
 In Bolton v. Stone, the risk was plainly foreseeable, but the chance of it happening in the foreseeable future was
infinitesimal
o Now, in order to be found negligent, the damage needs to be foreseeable but also the risk of it happening must
be significant enough to warrant preventative action
 4 potential factors involved in Lord Reid’s test:
o 1) Risk: what is the probability of the damage occurring – in this case it was about 1 in 50,000
 Also, important to note that in the past, when the ball went over the fence, it did not hurt anybody
o 2) Consequences: the severity of the consequences of not acting – in this case, the lady was injured but it was
not life-threatening
o 3) Cost of precautions: how much would it cost to implement/increase preventative measures – in this case,
they had a fence, but should they have put up a bigger one?
 It would have been very expensive to do this (you can’t just put up a big fence without adequate
support, or else your precaution would turn into a risk), the risk and consequences were low-middle
level, and so the precautions should mirror that (no breach of SOC)
o 4) Social utility (subtext of this case – not mentioned specifically by Lord Reid): is there a social benefit to the
activity that we don’t want to discourage people from doing it?
 Cricket is held very high in terms of a social aspect in England – lots of benefits to community
building
 The Court was not prepared to deter people from playing cricket
 If we balance out the benefits to the community with the risk of the plaintiff, she may just have to
suck it up
 If you apply this test to Vaughan v. Menlove
o Assume there is a medium level of risk
o The consequences are high (lost property, danger to people, etc.)
o Cost of precaution is low – he just had to relocate the hay stacks
 In fact, if he did this before building them, it wouldn’t have cost anything
o This amounts to negligence under Lord Reid’s framework – medium risk, high consequences, low cost of
precaution

Ford Pinto Case

Facts Ford released a car that when rear-ended, would explode. It was discovered that the reason for this happening was that the
gas tank was in a bad place. The company had two options. They could re-call the cars and fix them (enormous cost for the
company) or they could allow people to injure themselves and only pay damages to those who were involved in accidents
(cheaper option). They decided to go with the cheaper option.
Notes  Ford had experts come in and figure out much it would cost to pay people damages who were involved in accidents
o They determined that it would be cheaper to not fix the tank and instead instructed their lawyers to settle
cheaply and quickly with people who suffered accidents
o It was also taken into consideration that many people would not pursue legal action, so not even everyone who
was injured would need to be paid off
 What they did not consider was the PR damage
o Once it was discovered that the cars were blowing up, people no longer wanted to buy them
o If they had considered this, it may have changed their analysis
o Also, a criminal action was brought for manslaughter against the directors of the Ford Company because once
they knew how dangerous the cars were and opted not to do anything about it, this was criminal
 The point here is that tort law does not tell you that you can’t do something, it simply tells you the cost of doing
something
 Tort law offers perverse incentives!

Overseas Tankship Ltd v. The Miller Steamship (Wagon Mound No. 2) [1967] UK
Reasons  Lord Reid: “But it does not follow that, no matter what the circumstances may be, it is justifiable to neglect a risk of
such a small magnitude. A reasonable man would only neglect such a risk if he had some valid reason for doing so, e.g.,
that it would involve considerable expense to eliminate the risk. He would weigh the risk against the difficulty of
eliminating it. If the activity which caused the injury to Miss Stone had been an unlawful activity, there can be little
doubt but that Bolton v. Stone would have been decided differently. In their Lordships' judgment Bolton v. Stone did not
alter the general principle that a person must be regarded as negligent if he does not take steps to eliminate a risk which
he knows or ought to know is a real risk and not a mere possibility which would never influence the mind of a
reasonable man. What that decision did was to recognize and give effect to the qualification that it is justifiable not to
take steps to eliminate a real risk if it is small and if the circumstances are such that a reasonable man, careful of the
safety of his neighbor, would think it right to neglect it.” 
Notes  Ideas of cost benefit analysis 
 This time Lord Reid specifically mentions social utility
 Hutch thinks that if the activity in Bolton v. Stone was unlawful or antisocial in nature, the result would have been
different, and they would have been found negligent

Latimer v. AEC [1953] UK

Facts The factory floor was flooded by rainfall. After the water was drained, the floor was slippery from a mix of the water with an
oily substance used in the factory’s business. The employer spread sawdust on the ground as a precaution but eventually ran
out and did not have enough to cover the whole area. At this point, the employer’s preventative options were to close the
entire factory and send everyone home or to close that area of the factory. The plaintiff was an employee that worked on a
gangway that hadn’t been treated with the sawdust. He slipped while lifting something and hurt his ankle – sued the
employer for negligence. 
Issue(s)  Was the employer negligent?
 Was the SOC breached?
Decision No negligence – the employer was seen to have made his best efforts in preventing risk of harm to the employees. Risk of
harm was small enough that it didn’t warrant additional precautions being taken by the employer 
Reasons Lord Porter 
 The Court notes that this is about what a prudent man (company) would do. The risk of harm must also be balanced
against the cost considerations of preventing the risk (shutting down the factory, sending people home, necessity of
carrying out work etc.) 
 The factory owner did their best to get rid of the effects of the flood (they took some steps). The consequences of
shutting down the factory would have been too drastic – workers would not have received their wages (this was a
significant consideration) 
 No negligence - “in my view, in these circumstances, the appellant has not established that a reasonably careful
employer would have shut down the works or that the respondents ought to have taken the drastic step of closing the
factory” 
Lord Tucker 
 The question in this case is whether the floor was so slippery that, remedial steps not possible, a reasonably prudent
employer would have shut down the factory 
 The risk of harm did not warrant this action 
 No one else slipped 
Lord Asquith 
 “The degree of risk was too small to justify, let alone require, closing down”
Ratio  In determining standard of care, the degree of risk must be balanced against the cost of completely preventing that risk 
 A defendant does not have to totally eliminate risk but must do as much as the reasonable person would do in the
circumstances 
Notes  The defendant here is a commercial enterprise
 This occurred before workers’ compensation schemes (legislation now exists because we think workers should be better
protected – common law was useless, hence the result in this case)
 Why didn’t they have enough sawdust? If they did, the chances of this accident occurring would have gone way down
 Sawdust is cheap, so according to Lord Reid’s test, isn’t it negligent not to have enough? – maybe though, it would be a
risk to carry a lot of sawdust (could catch on fire)
 Social utility is at play here – if the factory had been closed down, the workers would have been sent home without
wages
 Tomlinson v. Congleton Borough Council [2004] UK

Facts Plaintiff was injured while swimming in a shallow lake that was artificially formed in a park owned by the defendant
municipality. While swimming, P plunged forward at too sharp an angle, hit the bottom with his head and suffered a broken
neck and paralysis. P sued the municipality, alleging it breached its duty under the Occupier’s Liability Act, 1984 “to take
such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the
premises from the purposes for which he is invited or permitted by the occupier to be there”.
Issue(s) Did the municipality breach the SOC?
Decision No – no breach of SOC
Reasons Lord Hoffman 
 Test of whether care taken was reasonable depends on assessing not only the likelihood of someone being injured and
the seriousness of the injury, but also the social value of the activity which gives rise to risk and the cost of preventative
measures (Overseas Tankship). Factors have to be balanced against each other 
o Although an injury may be foreseeable, there may be no obligation on a defendant to do anything about it -
may be reasonable not to prevent harm (Bolton v. Stone) 
 In considering the social value of the activity in question Hoffman notes that the risk was very small – most people
enjoyed their time at the quarry without accident. Therefore, it would not be reasonable to expect the municipality to
destroy the beaches (despite foreseeable harm) 
Lord Hobhouse 
 Important not to confuse the seriousness of the outcome with the degree of risk that will occur (central to
the assessment of what reasonably should be expected of the occupier) 
o If the risk of serious injury is so slight and remote that it is highly unlikely to materialize, it may well be that it
is not reasonable to expect the occupier to take any steps to protect anyone against it 
o The law does not require disproportionate or unreasonable responses 
Ratio  When determining if a defendant breached his/her duty of care in failing to take steps to reduce harm (when harm is
foreseeable), courts must also consider the social value of the activity
Notes

Watt v. Hertfordshire County Council [1954] UK

Facts Firemen were sent to a call with a heavy jack in the truck. The jack was needed for the job of helping a woman who was
trapped under a heavy vehicle. The regular truck which was used to carry the jack was not available and there was nothing in
the truck that they took for the jack to latch on to. When the driver of the truck slammed on the breaks to avoid going through
a red light, the jack fell and hit the plaintiff, injuring him. The plaintiff sued his employers. 
Issue(s) Did the Council breach their SOC in not securing the jack properly?
Decision No – no breach of SOC
Reasons Lord Denning 
 When measuring due care, the risks must be balanced against: 
o The measures necessary to eliminate the risk; AND  
o The end to be achieved (social utility) 
 “If this accident had occurred in a commercial enterprise without any emergency, there could be no doubt that the
servant would succeed. But the commercial end to make profit is very different from the human end to save life or limb.
The saving of life or limb justifies taking considerable risk, and I am glad to say there have never been wanting in this
country men of courage ready to take those risks, notably in the fire service” 
o Firefighter assumed all risks associated with this line of work – people are expected, in this role, to sacrifice
themselves for the greater good 
Ratio  One must balance the risk against the end to be achieved (social utility)
 There is more to the cost of prevention than simply the monetary cost; the utility of the conduct must be considered as
well
Notes  The defendant here is a public authority (should the rules be the same for them and private commercial enterprises, or
should they vary depending on the defendant?)
o Lord Denning says who the defendant is makes a difference
 Hutch thinks this case is perverse
 o We want the fireman out there fulfilling the public good but when he’s out there, we’re saying “you’re on your
own!”
o Wouldn’t we want to tell people that we respect them so much that don’t worry, we will take care of you?
o Lord Denning has a good sentiment here but he’s applying it in the completely wrong way and it pans out
against the wrong people
 This is why we have Workers’ Compensation Schemes – to ensure that someone is going to compensate them for their
injuries (because negligence actions just don’t support that happening)

Custom
The TJ Hooper [1932] USA

Facts Northern Barge, the operator of the T.J. Hooper and the Montrose tugboats, did not have reliable radios on
board. The respondents sued Northern Barge under a towing contract when two barges and the cargo of coal were lost in a
storm. The claim stated that it was negligent not to equip the tugboats with reliable radios. If the tugboats had radios,
Northern Barge would have received storm warnings and the two barges would have been put safely into breakwater Four
other tugs were on the same route and avoided the storm because of reliable radios. The respondents were successful at trial
which Northern Barge appealed. 
Issue(s)  Is there a custom to have the radios? 
 If there is not, is the appellant free from negligence?
Decision Appeal dismissed
Reasons Hand
 There is no “custom” of tugs having radios, as most companies do not use them. 
 However, any reasonable tug company should have them to prevent risks related to bad weather (they are fairly
inexpensive) 
o Not having the radios meant that the tug company was not living up to the necessary standard of care 
 Reasonable prudence is not necessarily common prudence based on general customs if those customs have failed to
adapt to new technology.
o The standard of care is a relative concept that changes 
Ratio  If the utility of a safety precaution outweighs the cost of the precaution, then it is negligent not to carry the safety
precaution 
 An industry’s general custom does not dictate the standard of care; the courts decide what is required of the parties  
Notes  Particularly important in business and professions 
 “I followed the custom of the profession, therefore I can’t be negligent” 
o This idea has a certain appeal but can get us into difficulty 
 Who decides what the custom is? 
o The business and the profession itself 
o Organizations have incentives to hold down customary practice, so it is more convenient for them (easier to
avoid negligence) 
o At what point do we expect innovations to be incorporated into standard practice? 
 We to accept that professionals can’t be entirely up-to-date but is following custom a shoe-in for avoiding negligence? 
o Court says no here (American case)

Ter Neuzen v. Korn [1955] SCC

Facts Ter Neuzen became infected by HIV as a result of her participation in Korn’s (OBGYN) artificial insemination program
from 1981 to 1985. Korn had not warned her of risk of HIV infection. Prior to Jan 1985, there was no test available for
detection of HIV in semen or blood in Canada, and medical literature did not mention AI as a mode of transmission of HIV
before September 1985. Korn was not aware that HIV could be transmitted by AI until July 1985. Expert evidence
established that Korn’s AI practice, as well as recruitment and screening of doctors was in keeping with general practices in
Canada. Korn was found negligent at trial, but this was overturned on appeal . 
Issue(s)  Did the doctor breach the standard of care of a reasonable OBGYN at the time?  
 Did the trial judge err in instructing the jury that the prevailing standard of practice could itself be found to be
negligent? 
Decision Appeal dismissed – no breach of SOC
Reasons Sopinka J
 The doctor adhered to all the standards of his profession of the day and he could not reasonably have known that there
was a risk of HIV here. 
 However, simply living up to the standards is not generally enough to escape negligence – a person must still act
reasonably in the circumstances 
o In such specific cases as this one, living up to the custom is enough, as the judge/jury are not in a situation to
evaluate the standard of the custom because they do not have enough relevant knowledge. 
 Korn did both - adhered to standards and acted as a reasonable doctor would have in his time 
o In finding that the doctor adhered to his reasonable standard of care, expert advice was needed  
Ratio  While simply living up to the standard in most situations is not enough to escape negligence, if you act reasonably, this
is sufficient to adhere to the standard of care 
 Conduct of doctors must be judged in light of the knowledge that ought to have been reasonably possessed at the time of
the alleged act of negligence 
 In scientific cases, living up to the custom is sufficient to eliminate liability in negligence 
 Expert advice is needed to advise juries and judges to evaluate the “custom” standard of care in specialized cases such as
those involving medical care 
Notes Hutch
 These cases are tough because the industry is the gatekeeper to the research
o Ex. Tobacco companies are in the best situation to do research on effects of smoking, but they also have the
most to lose - A lot to lose if they invest in research and find out things that could be detrimental to the
practice 
 Research around HIV at the time was also quite politicized 
o Predominantly affected the gay community and a lot of prejudice 
o We don’t have to worry about this when it comes to heterosexual people 
 The culprit in this case might have been the entire medical profession (they have a certain agenda – refrain from
researching this particular area) 
o Can you sue the entire medical profession? Probably not 
 SCC makes it clear here that if you follow standard practice, you are almost home in avoiding negligence
o Plaintiffs should still be able to challenge the standard practice 
 You can say that, but how do you do this? You’ve got to get an expert (someone within the
profession) to take your side – very difficult 
 Sopinka says that in a changing field, all the doctor can do is follow the procedure 
o Problem: what if that doctor had a lot of knowledge in this particular area and knew changes were on the
horizon? 
o Their lawyer would tell the doctor to maintain the customary practice 

Duty of Care
In order for a plaintiff to recover damages in tort, a defendant must have acted in a way that was unreasonable under the
circumstances and a duty must have existed between the parties, whereby the defendant was legally obligated to exercise
reasonable care towards the plaintiff. The duty of care is a mechanism to contain liability. It emphasizes that in law, you
do not owe a duty to the world, but you do owe a duty to certain individuals.

The “neighborhood” principle from Donoghue v Stevenson revolutionized tort law and continues to be a central tenet of
modern duty of care analysis. Lord Atkin laid out this basic framework when he stated, “you must take reasonable care to
avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbor” (Donoghue v
Stevenson). For Atkin, ‘neighbors’ are people who are so closely and directly affected by an act, that a person ought
reasonably to have had them in contemplation as being affected when the action/omission was taken (Donoghue v
Stevenson). It is important to understand the “neighborhood” as a shifting boundary, one that is largely influenced by
social circumstances. This idea is implicit in Lord Macmillan’s judgment whereby he stated that, “the categories of
negligence are never closed” (Donoghue v Stevenson).
Drawing on Anns v Merton London Borough Council and Kamloops (City of) v Nielsen, Chief Justice McLachlin (as she
then was) put some flesh on Lord Atkin’s bare bones and affirmed the current test for determining the existence of a duty
of care in Cooper v Hobart. The starting point for this analysis is to determine whether there are analogous categories of
cases in which a duty of care has been recognized (Cooper v Hobart). If the answer to this preliminary inquiry is yes, the
Court should rely on the existing standard and if not, a three-step duty of care test should be applied (Cooper v Hobart).
The Cooper v Hobart test for establishing a new class of duty of care is:
1. Foreseeability – Was it reasonably foreseeable that the defendant’s negligent activity would have resulted
in damage to the plaintiff?
 In Rankin v JJ, Justice Karakatsanis held that there was no prima facie duty of care because while it was
reasonably foreseeable that leaving a car unlocked with the keys inside would have resulted in it being
stolen, it was not reasonably foreseeable that the vehicle would have been stolen by minors, driven unsafely,
and been involved in an accident. Further, Karakatsanis distinguished between something that is possible
and something that is reasonably foreseeable (Rankin v JJ). She reasoned that since anything that occurs is
by definition possible, for harm to be reasonably foreseeable, a higher threshold than mere possibility must
be met (Rankin v JJ). Evidence must exist to support an assertion that harm was reasonably foreseeable
(Rankin v JJ).
 Things to consider: foreseeable class of persons (Haynes v Harwood), foreseeable danger zone (Palsgraf v
Long Island Railroad Co), Palsgraf Revisited
2. Proximity – Was there sufficient proximity between the parties?
 In Cooper v Hobart, McLachlin CJ noted that reasonable foreseeability must be supplemented by the notion
of proximity, in order to establish a prima facie duty of care. Proximity does not exist as a universal term
and factors which may satisfy the requirement are diverse and depend on the circumstances of the case, i.e.
closeness (not strictly physical), statutory obligations, expectations, representations, reliance, and the
property or other interests involved (Cooper v Hobart). These factors help to evaluate the closeness of the
relationship between a plaintiff and a defendant, and to determine whether it is just and fair, having regard to
that relationship, to impose a duty of care in law upon the defendant (Cooper v Hobart). McLachlin held
that the relationship between the Registrar and the investors was of insufficient proximity because the
statute governing the Registrar imposed no such duty to individual investors, and therefore, it was not fair or
just to impose a common law duty upon them. (Cooper v Hobart).
3. Policy Considerations – Even if a prima facie duty of care has been established, are there any residual
policy considerations that ought to negative or limit the scope or cognition of the duty?
 Judicial Administration/Floodgates: This duty of care should not be established because doing so would lead
to a large number of actions.
o “We ought not to permit a duty to rest upon this subject, for our doing so might be the means of
letting in upon us an infinity of actions” (Lord Abinger in Winterbottom v Wright).
o “If we go one step beyond this, there is no reason why we should not go fifty” (Lord Alderson in
Winterbottom v Wright).
 Jurisdiction: Imposing a duty of care in this case would change the law so drastically that it would be
inconsistent with legislative jurisdiction.
o “The absence of authority shows that no such duty now exists. If there should be one, that is, in my
view, a matter for the Legislature and not for the Courts” (Viscount Dilhorne in Home Office v
Dorset Yacht)
o “Matters of public policy are concerned with sensitive issues that involve far-reaching and
unpredictable implications for Canadian society. It follows that the legislature is the more
appropriate forum for the consideration of such problems and the implementation of legislative
solutions to them.” (Cory J in Dobson v Dobson)
o “Hard cases are apt to introduce bad law” (Lord Rolfe in Winterbottom v Wright)
 Nature of the Damage: There is/is not a significant difference between damages that are physical and those
that are purely economic.
o Note: Generally, Courts value physical injuries more than financial injuries
o Consider: Donoghue v Stevenson, Cooper v Hobart, Kamloops
 Nature of the Defendant: There is/is not a significant difference between placing a duty of care on a private-
for-profit enterprise and a public government regulator. Imposing liability on a public regulator might lead
to greater consequences for a larger number of people, as it could deter provinces from having any
regulators at all.
o Consider: Donoghue v Stevenson, Cooper v Hobart, Kamloops
 Cost Benefit Analysis: Establishing a duty of care in this case would be appropriate because we want to
encourage people to take an appropriate level of precaution.
 o Consider: Rankin v JJ, Posner’s Economic Theory of Negligence, Lord Reid in Bolton v Stone
 Deterrence and Social Utility: Finding that a duty of care is owed would be appropriate because it would
encourage good conduct and deter bad conduct. Establishing a duty of care in this case would be appropriate
because we want to encourage people to take an appropriate level of precaution. Although imposing liability
in this case might deter some bad conduct/encourage good conduct, it might also deter individuals from
participating in conduct that has a high level of social utility.
o Consider: Haynes v Harwood, Bolton v Stone, Barnett v Chelsea
 Privacy and Autonomy: Establishing a duty of care in this case would not be appropriate because it would
unethically infringe upon the privacy and autonomy rights of members of the class to which the plaintiff
belongs.
o Consider: Dobson v Dobson
 Costs of Litigation: Establishing a duty of care in this case would be appropriate because members of the
class to which the defendant belongs are better equipped to bear the costs of injuries suffered by members of
the class to which the plaintiff belongs.
o Consider: Sindell v Abbott Laboratories (California)
 Identifying and Rectifying Harms: Establishing a duty of care in this case is appropriate because members of
the class to which the defendant belongs are in a better position to identify and rectify harms in products
before they are distributed and consumed by members of the class to which the plaintiff belongs.
o Consider: Ter Neuzen v Korn, BC v Imperial Tobacco
 Note: In his dissenting judgment in Dobson v Dobson, Justice Major established that in order for a public
policy implication to negate a duty, the duty must restrict a defendant’s actions in a way that was not present
before.

Winterbottom v. Wright [1842] UK

Facts Winterbottom was a coachman who drove a horse-pulled mail coach. His employers entered into a contract with Wright to
maintain the coach and keep it in good working order (this was Wright’s “duty”). Wright failed to do this, and Winterbottom
fell off the coach and injured himself. Winterbottom sued Wright claiming that a duty arose out of the related contracts
(between Wright and the post-master) even though the parties had no contract with one another.
Issue(s) Does the duty of care extend beyond contracting parties?
Decision No – DOC is only owed by the defendant to the contracting party – because he is not part of the contract, Winterbottom has
no basis on which to sue
Reasons Lord Abinger 
 The plaintiff was not a party to the contract between Wright and the postmaster – just as he cannot sue for breach
of contract he also cannot sue in tort (must be a party to sue) 
o “There is no privity of contract between these parties; and if the plaintiff can sue, every passenger, or even any
person passing along the road, who was injured by the upsetting of the coach, might bring a similar action.
Unless we confine the operation of such contracts as this to the parties who entered into them, the most absurd
and outrageous consequences, to which I can see no limit, would ensue.”
 Allowing Winterbottom to sue for this action would set a dangerous, seemingly limitless precedent that anyone could
sue who was injured by a residual effect 
o “We ought not to permit a duty to rest upon this subject, for our doing so might be the means of letting in upon
us an infinity of actions”
Lord Alderson 
 The contract is only between the postmaster and Wright 
 People who were third parties to the contract being able to sue would be “absurd” 
 Allowing recovery in cases like this would lead to a large number of actions 
o Wants to confine the rights to recover to those that enter the contact 
 “If we go one step beyond this, there is no reason why we should not go fifty” 
o Slippery slope argument 
Lord Rolfe 
 The only breach in this case is the breach of the defendant’s contractual obligations 
o There was no duty owed to the plaintiff 
 Acknowledges that there has been harm caused in this case but that the defendant cannot be held liable for it 
o “Hard cases are apt to introduce bad law”
Ratio Duty of care does not extend beyond contracting parties
Notes Hutch
 Is the floodgates argument a good one?
o Surely, we should consider the deservingness of these actions (not just the quantity)
 Lord Abinger thought that the idea that people could sue for getting hurt at work for no fault of their own because the
equipment they were using was crappy and someone had been negligent in maintaining it would be absurd
o Now we would think it would be absurd and outrageous not to let this guy recover
 The law is driven by whatever social forces are in play (this was a common sentiment at the time)
o This idiotic ruling lasted about 85 years

Donoghue v. Stevenson [1932] UK

Facts Donoghue’s friend ordered and paid for a ginger beer for her at a cafe. The ginger beer was manufactured by Stevenson (not
the café). After drinking some of the contents, the rest was poured into a glass, where the remains of a decomposed snail
were found. Donoghue got gastroenteritis and severe shock, missing months of work. Donoghue sued Stevenson,
the manufacturer of the drink for negligence, even though they had no contract.
Issue(s) Does the manufacturer of a product owe a duty of care to the final consumer even though there is no contractual term?
Decision Yes – DOC owed by a defendant to his/her neighbors
Reasons Lord Atkin (not the majority judgment but became the guiding principle for duty of care) 
 The role of judges is not just to apply laws – they should look deeper than cases to see emerging moral principles.
o In applying this philosophy, he sees that reading through cases there is a general duty to those within your
community (Connecting law with morality) 
 The rule that you are to love your neighbor becomes in law “you must not injure your neighbor” 
o You must take a reasonable care to avoid acts or omissions which you can reasonably foresee would be likely
to injure your neighbor 
o Also means, that you don’t owe a duty to ‘strangers’ 
 In law, ‘neighbors’ are people who are so closely and directly affected by an act that a person ought reasonably to have
had them in contemplation as being affected when the action/omission was taken 
o Who could have reasonably been harmed? 
 It may be tough in some cases to determine who is a neighbor – but not in this particular case 
Lord Buckmaster (Dissenting) 
 Relies heavily on Winterbottom ruling - no duty owed to parties who are not privy to a contract 
 There is no special duty attached to the manufacture of food found in statute, and there was no contract between the
consumer and the manufacturer 
 The general principle is: “The breach of the defendant’s contract with A to use care and skill in and about
the manufacture or repair of an article does not of itself give any cause of action to B when he is injured by reason of
the article proving to be defective” 
 From this general rule there are two well-known exceptions 
o In the case of an article dangerous in itself; and 
o Where the article not in itself dangerous is in fact dangerous, by reason of some defect or for any other reason,
and this is known to the manufacturer 
 It cannot be argued that ginger beer is in itself dangerous, nor was the manufacturer aware of the
danger in this case
 It is a slippery slope to say that a manufacturer should be responsible for all the subsequent uses and consequences of its
products, and it would not be practical for the manufacturer to be responsible for the quality of every single item it
produces 
o Were such a principle recognized, it seems impossible that no case directly involving the principle has ever
succeeded in the courts 
 “The law applicable is the common law, and, though its principles are capable of application to meet new conditions not
contemplated when the law was laid down, these principles cannot be changed nor, can additions be made to them
because any particular meritorious case seems outside their ambit”
o “hard cases make bad law”
o Notion that judges should interpret laws and not change them (contrary to Atkin) 
Lord Macmillan 
 The ruling in Winterbottom does not apply here – there is not a breach of contract but a duty of care issue 
o The reasonable man would find that the defendant has been careless in his process of manufacture 
 Manufacturers have a duty to take care during manufacturing and this duty is owed to people whom the manufacturer
intends to consume the products
 “The categories of negligence are never closed”
Ratio  Manufacturers owe the final consumer of their product a duty of care (at least in the instance where the goods cannot be
inspected between manufacturing and consumption).
o There need not be a contractual relationship, or privity, for the final consumer to sue in negligence. 
 People owe a duty of care to their neighbors, but don’t owe a duty to ‘strangers’ or the world at large
Notes  The neighbor test is not a formula – it is just a principle (no right or wrong way to apply it) as we see in Palsgraf and
Haynes
o The ‘neighborhood’ is a shifting boundary, and is largely influenced by social circumstances
 In 1932, the Welfare State is established and there is an idea that people are deserving of protection by the government
o There is a social obligation to take care of others less well off than ourselves
o Maybe we should stop thinking about people like in Winterbottom
 In 1928, May Donoghue is a sad and tragic figure
o She lives in the slums of Glasgow
o She is poor, married early, left her husband (not easy – she had no funds at all)
o She takes a train to a suburb called Paisley and meets a friend at the Wellmeadow Café
 She orders an ice cream soda and the friend is the one paying
 o This is very important because technically Donoghue is not part of the contract
 The owner of the café pours half the ginger beer onto the ice cream, she finishes it, pours the rest of the beer and it turns
out that there is a snail inside
 She goes to the infirmary (this is a big step)
o She really was not feeling well because health care was not free
o She missed her job for a few weeks
 Donoghue decided to move on and forget about it
o A lawyer, who was very against food manufacturers, heard her story and thought it would be a great case to
push
o He offers to pay the costs of the action and that she can keep the winnings
o She played zero roll in the litigation
 Stevenson sells the beer to the cafe (this is a contract)
 Café serves to Donoghue (but the contract is between the café and the friend – because she paid)
o Doesn’t really matter who paid though, in reality, because neither had a contract with Stevenson
 They don’t sue the café because there was no evidence that he breached the SOC (he did not keep the bottles badly and
even if he had inspected them, they were impossible to see through)
 Stevenson runs a whole line of defenses (no evidence she was ill, didn’t keep the snail, no evidence that the ginger beer
was his because it was common practice in Paisley to recycle bottles between all the factories)
o His main argument though was that she did not have a claim because of Winterbottom v. Wright (no contract,
no DOC)
 The case never went to trial
o Stevenson died, and his estate settled with Donoghue for about 200 pounds
 The case shows the importance of lawyers (this case never would have come to be without the lawyer)
 Atkins judgment was supposedly influenced by his daughter at the dinner table
o It is a very radical move
o He says that the cases in the case law in themselves don’t appear to support his idea but if you take all of the
cases together, there is a developing principle
o Hutch thinks that Atkin knows where he wants to go and is looking for principles to pull out that support that
 If there is a case that makes law, this is it

Palsgraf v. Long Island Railroad Co. [1928] New York

Facts A man was getting onto a moving train owned by the Long Island Railroad Company. Seeming unsteady, two workers of the
company tried to assist him onto the train and accidentally knocked his parcel out of his hands. The parcel contained
fireworks wrapped in newspaper which went off when they hit the ground. The employees did not know what was in the
package. The force of the blast knocked down some scales several feet away which fell and injured Ms. Palsgraf (she
purchased a ticket – contract with the railway – does not really matter though because we don’t need a contract as shown in
Donoghue v. Stevenson). The plaintiff sued Long Island Railroad for negligence. At trial and first appeal, Palsgraf was
successful, which Long Island Railroad appealed.
Issue(s)  Did the train workers owe a DOC to the plaintiff?
 Must the plaintiff be within the range of foreseeability for a DOC to be owed?
Decision Appeal allowed – no DOC
Reasons Cardozo CJ
 Negligence is not a tort unless it results in the commission of a wrong, and the commission of a wrong imports the
violation of a right, in this case, we are told, the right to be protected against interference with one’s bodily security.
 What the plaintiff must show is “a wrong” to herself; i.e., a violation of her own right, and not merely a wrong to
someone else, nor conduct “wrongful” because unsocial.
o The conduct of the defendant’s guard, if a wrong in its relation to the holder of the package, was not a wrong in
its relation to the plaintiff, standing far away. Relatively to her it was not negligence at all.
 If the harm was not willful, she must show that the act as to her had possibilities of danger so many and apparent as to
entitle her to be protected against the doing of it though the harm was unintended.
o There was no indication that the parcel contained fireworks. There was no showing that the act had such great
possibilities of danger as to entitle a party to protection against that act.
 For there to be a finding of negligence there must first be a finding that defendant owes a duty to plaintiff and that the
injury could have been avoided by the defendant.
 o While it is clear that defendant violated its duty to the person carrying the fireworks, the defendant did not
violate any foreseeable duties to plaintiff, as it was unforeseeable that a package being carried would explode
and cause any damage to the plaintiff. 
Andrews J (dissent)
 Quoting Mr. Justice Holmes
o “The measure of the defendant’s duty in determining whether a wrong has been committed is one thing, the
measure of liability when a wrong has been committed is another.”
 Due care is a duty imposed on each one of us to protect society from unnecessary danger, not to protect A, B, or C
alone.
o Everyone owes to the world at large the duty of refraining from those acts that may unreasonably threaten the
safety of others. Not only is he wronged to whom harm might reasonably be expected to result, but he also
who is in fact injured, even if he be outside what would generally be thought the danger zone. There needs be
duty due the one complaining, but this is not a duty to a particular individual because as to him harm might be
expected. Harm to someone being the natural result of the act, not only that one alone, but all those in fact
injured may complain.
 The right to recover damages rests on additional considerations.
o The damages must be so connected with the negligence that the latter may be said to be the proximate cause of
the former.
o The proximate cause, involved as it may be with many other causes, must be, at the least, something without
which the event would not happen. The court must ask itself whether there was a natural and continuous
sequence between cause and effect. Was the one a substantial factor in producing the other? Was there a direct
connection between them, without too many intervening causes? Is the effect of cause on result not too
attenuated? Is the cause likely, in the usual judgment of mankind, to produce the result? Or, by the exercise of
prudent foresight could the result be foreseen?
 In this case, negligence by the defendant was the proximate cause of the plaintiff’s injuries
Ratio Cardozo CJ
 Negligence is based on the foreseeability of harm between the parties
 A duty that is owed must be determined from the risk that can reasonably be foreseen under the circumstances.
o A defendant owes a duty of care only to those plaintiffs who are in the reasonably foreseeable zone of danger.
Andrews J in dissent
 Each person owes an absolute duty of care; each person must refrain from acts (foreseeable or not) that unreasonably
threaten the safety of others. Everyone is a foreseeable plaintiff, provided there is proximate cause
Notes  Carrying fireworks around 4th of July would not be that unusual 
 Would Lord Atkin have considered Ms. Palsgraf a neighbor? Was it reasonably foreseeable? 
o If the question asked in this case would have been: does the railway station owe a DOC to people on their
platform, the answer would probably have to be yes 
 Remember that the employees were negligent in this case – the only reason she didn’t recover was because she was not
found to be in the ‘neighborhood’ of foreseeability
 Keep in mind this is an American case – they don’t have a DOC analysis – Hutch says if we took the facts of this case
and applied it to Canadian DOC analysis, it would have for sure been a DOC owed – maybe not liable for other reasons
but definitely DOC

Haynes v. Harwood [1935] UK

Facts Harwood's servant brought a two-horse carriage into a residential neighborhood and parked it across the street from a police
station while he was off doing work, without properly securing the horses (negligent). While the servant was
away, some children upset the horses by throwing stones at them and they ran off on a path to injure people. Haynes, a police
officer, saw this from a window. He ran out and stopped the horses but got injured in the process. He brought an action for
damages against the company that employed the servant and was successful at trial. The defendant appealed.
Issue(s)  When someone knowingly puts themselves in danger to protect others, is the negligent party liable for damages suffered
in the protection effort? 
 Did the servant’s company owe a duty of care to the cop?
Decision Yes – the defendant owed a DOC to potential rescuers and was negligent in performing that duty
Reasons Greer J 
 In cases like these, the volenti non-fit injuria maxim (as put forth by the defendant) does not apply 
o Volenti non-fit injuria means where a person engages in an event accepting and aware of the risks inherent in
 that event, then they cannot later complain of, or seek compensation for an injury suffered during the event
(similar to Watt v. Hertfordshire County Council) 
 If someone acts to help those in danger because of a person’s negligent actions, that person is liable for the damages
resulting from their actions if they are reasonable in the circumstances. Taking risk upon yourself is not applicable in
rescue circumstances. 
 It was negligent for the servant to have left the horses unattended and untethered in that area at that time 
 Was the policeman in the zone of liability? 
o Policeman should get some compensation – it would be grossly unjust for the policeman not to recover here.
We don’t want to discourage people from rescuing people, we actually want to encourage them – so rescuers
should be brought into the zone of responsibility 
o You don’t have to predict the exact sequence of events, but you have to determine whether it is a hugely
unreasonable action. It only wouldn’t have counted if it was so obvious that no one should have intervened
because it was way too dangerous.  
Ratio  A duty of care is owed by a negligent party to potential rescuers forced into action as a result of their negligent actions,
providing that it is not obviously too dangerous to intervene
Notes  Seems to overrule the decision in Watt v. Hertfordshire County Council
 In this case, the obvious culprits are the boys (but there is no use suing them because they don’t have any money)

Dobson v. Dobson [1999] SCC

Facts Mother (defendant) was 27 weeks pregnant at the time of the incident. She was driving her car in a snow storm when she hit
a patch of slush and lost control and struck an oncoming vehicle. It was alleged that the accident was caused by her negligent
driving. The father owned the car and had insurance. The infant plaintiff, Ryan Dobson, was allegedly injured while in utero,
and was delivered prematurely by Caesarean section that that same day. He suffers from permanent mental and physical
impairment, including cerebral palsy. The infant plaintiff, by his grandfather (litigation guardian) launched a tort claim for
damages against his mother. Ryan was successful at the Court of Appeal, which his mother subsequently appealed .
Issue(s) Should a mother be liable in tort for damages to her child arising from a prenatal negligent act which injured the fetus in her
womb?
Decision Appeal allowed – defendant mother not liable – no DOC for policy reasons
Reasons Cory J, writing for the majority
 The mother should not be held liable in the situation because of the policy implications.
 The test set out in Kamloops indicates that before imposing a duty of care, the court must be satisfied that
o There is a sufficiently close relationship between the parties to give rise to the duty of care.
 Yes, the pregnant women and her fetus are distinct legal entities, and yes, there is a sufficiently close
relationship between the two.
o There are no public policy considerations which ought to negative or limit the scope of the duty.
 No, significant policy concerns militate against the imposition of maternal tort liability for prenatal
negligence.
 There are two main reasons for the public policy concerns
o It would violate the privacy and autonomy of women.
o The difficulties inherent in articulating a judicial standard of conduct for pregnant women.
 The unique relationship between a pregnant woman and her fetus is so very different from the relationship with third
parties.
o Everything the pregnant woman does or fails to do may have a potentially detrimental impact on her fetus.
o If a mother were to be held liable for prenatal negligence, this could render the most mundane decision taken in
the course of her daily life as a pregnant woman subject to the scrutiny of the courts.
 The judicial recognition of a cause of action for maternal prenatal negligence is an inappropriate response to the pressing
social issue of caring for children with special needs.
o If, as a society, Canadians believe that children who sustain damages as a result of maternal prenatal
negligence should be financially compensated, then the solution should be formulated, after careful study and
debate, by the legislature
 This Court has consistently held that the existence of insurance is irrelevant to a determination of tortious liability.
Accordingly, it would be inappropriate to resolve this appeal on that basis
McLachlin J, in a concurring judgment
 Another main reason why liability for fetal injury by pregnant women cannot be imposed is that it would
 violate two of the most fundamental Charter values – liberty and equality.
o Such legal action carries the potential to bring the whole of the pregnant woman’s conduct under the
scrutiny of the law, and this can jeopardize the pregnant woman’s fundamental right to liberty, to
control her body and make decisions in her own interest.
o Such liability would also subject pregnant women to a host of additional legal constraints that would
violate her right to equal treatment.
Major J, in the dissent
 In order for the public policy implications to negate the duty they must restrict the woman's actions in a way
that was not present before.
o This is not the case.
o If the same outcome occurred with another pregnant woman in the car, then there is no question that
the other woman's fetus could sue her for negligence.
 Her freedom of action in respect of her driving was already restricted by her duty of care to users of the
highway.
o To acknowledge that the suffering of her born alive child, Ryan Dobson, was within the reasonably
foreseeable ambit of the risk created by her negligent driving is hardly a limitation of her freedom of
action.
 The Kamloops test applies, but the policy implications here do not negate the duty.
o The presence of a duty of care owed to a third party in respect of the same behavior for which her
born alive child seeks to find her liable precludes a pregnant woman from arguing successfully that
her freedom of action would be restricted by the imposition of a duty of care to her born alive child.
 Further, I respectfully disagree with McLachlin J that the liberty and equality interests of pregnant women are
in issue in this appeal.
o The values enshrined in the Canadian Charter of Rights and Freedoms do not grant pregnant women
interests of any kind in negligent driving.
Ratio  On account of policy considerations regarding a woman’s right to privacy and autonomy, pregnant women do not owe a
DOC to the fetus in their womb
 Affirms Anns/Kamloops Test as the proper way for determining if a DOC is owed
Notes Hutch
 He likes the dissent and doesn’t understand why it is not the majority decision
o He believes it was possible in this case to award money to Ryan but also preserve the policy considerations
 The mother wanted the lawsuit because she wanted access to her insurance (she is going to have to pay to take care of
Ryan)
o It doesn’t say this in the case, but she was paid off by the insurance company to appeal to the SCC because
they wanted the result of no DOC as a binding precedent

Kamloops v. Nielsen [1984] SCC

Facts A house in Kamloops BC had insufficient foundations which were discovered upon inspection by the city. Stop work orders
were issued but not enforced. The house was sold to the Nielsen’s. On discovering the construction deficiencies, the
Nielsen’s brought an action against the vendor and Kamloops. The trial judge and the Court of Appeal found negligence on
the part of the vendor (75%) and Kamloops (25%). This is an appeal to the SCC. The City argued it was not liable in that it
owed no duty of care to Nielsen and, in any event, the action was statute-barred because the city had a discretion whether to
inspect construction.
Issue(s) Can a municipality be held liable for negligence in failing to prevent the construction of a house with defective foundations?
Decision Appeal dismissed – DOC owed
Reasons  Counter-argument that where the local authority is under no duty to inspect but merely has a power to inspect, it can
avoid liability for negligent inspection by simply deciding not to inspect at all. 
o This overlooks the fact that local authorities are public bodies operating under statute with a clear
responsibility for public health in their area. 
o They must make their discretionary decisions responsibly and for reasons that accord with the statutory
purpose. 
o They must give due consideration to the question whether they should inspect or not 
 Having decided to inspect, they must then be under a duty to exercise reasonable care in conducting
that inspection. 
 The two-stage test from Anns was adopted by the Supreme Court of Canada and Wilson J formulated it as follows: 
  Anns test: a private law duty can be imposed alongside public law powers and duties enabling individuals to sue the
authority for damages in a civil suit. In order to decide whether or not a private law duty of care [exists] ask 
o 1) If there a sufficiently close relationship between the parties (so that, in the reasonable contemplation of the
authority, carelessness on its part might cause damage to that person?) 
o 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? 
 Answer these questions by looking at legislation 
o Two kinds of legislation 
 Statutes conferring powers to interfere with the rights of individuals 
 Only have a claim where the local authority has done what the legislature authorized but has
done it negligently 
 Statutes conferring powers but leaving the scale on which they are to be exercised to the discretion of
the authority 
 If the local authority opts to do the thing authorized (policy), then there is a duty at the
operational level to use due care in giving effect to it 
 Applying to the case at hand, City of Kamloops had a statutory power to regulate construction by by-law. The regulation
was a policy decision. Having made the policy decision to regulate construction by by-law, it imposed on the inspector
to enforce the provisions of the by-law, an operational duty. 
 Floodgates argument: recognizing Anns would create an “open season” on municipalities 
o Rebuttal: Anns has built in barriers 
 Legislation must impose a private law duty before Anns applies 
 Anns will not apply to purely policy decisions; this prevents the courts from usurping the proper
authority of elected representatives and their officials 
o The principle ensures that public officials will be exposed to the same liability as other people if they fail in
discharging their duty to take reasonable care to avoid injury to their neighbors 
 Useful protection to the citizen who has to rely on public officials 
Ratio  A private law duty can be imposed on a public entity
 To decide whether a DOC exists, two questions must be asked:
o 1. Is there a sufficiently close relationship between the parties so that, in the reasonable contemplation of the
defendant, carelessness might cause damage to the plaintiff?  
o 2. If so, 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?  
Notes  In Canada, the SCC continues to apply the Anns test even after it was repudiated by the House of Lords in 1990
(Dobson and Cooper)

Cooper v. Hobart [2001] SCC

Facts Eron Mortgage Corporation was a mortgage broker under the Mortgage Brokers Act. Cooper had advanced money to Eron.
Eron’s mortgage license was suspended and they went out of business when it was discovered that they used money of over
6000 investors for unauthorized purposes. Cooper alleges that the registrar breached a duty of care that it owed to them and
other investors as it had been aware of the serious violations of the Act committed by Eron and not suspended its license
soon enough (negligence).
Issue(s) Does the Registrar owe a duty of care to members of the investing public for negligence in failing to properly oversee the
conduct of an investment company licensed by it?
Decision Appeal dismissed – no DOC owed
Reasons  In determining whether negligence should extend to this case, the Court reaffirms that the Anns test is the most useful
framework in which to analyze this question. However, McLachlin and Major want to alter it from a 2-stage test to a 3-
stage test, with a pre-test consideration 
 Pre-Anns Stage: Have we dealt with this category before? If we have, we use that standard; if we have not, we move to
the Anns test 
o In this case, the case was not analogous to any case in which a DOC had been recognized (purely economic
loss) 
 1) a) Was the harm that occurred a reasonably foreseeable consequence of the defendant’s act? 
o Perhaps it was foreseeable 
 1) b) Was there proximity between the two parties? (consideration of reasonable foreseeability must be supplemented by
 the notion of proximity – added) 
o Proximity does not exist as a universal term it depends on the relationship (factors which may satisfy the
requirement are diverse and depend on the circumstances of the case)
 They must be grounded in the governing statute when there is one
o The idea behind this is that the Court does not want to give the idea of owing a duty to the world 
o Even if the Registrar could have foreseen the losses, there was insufficient proximity between the Registrar
and the investors to ground a prima facie DOC 
 2) Are there policy considerations that override the cognition of a DOC? 
o No need to consider this because it didn’t pass stage 1 but the Courts did it anyway 
o Even if a prima facie duty of care could be posited, it would be negated by other overriding policy
considerations 
 Do we want to impose a lot of liability on a public body? We want to encourage provinces to have
regulators because they are good for everyone 
Ratio Revised Anns Test: Courts should first ask whether they have dealt with this relationship class before and if so, they should
rely on the existing standard. The test for establishing a new class of DOC is whether the harm is reasonably foreseeable,
whether there is proximity between the parties, and whether there are policy considerations that override the cognition of a
DOC.
Notes Hutch
 McLachlin was trying to put flesh on Atkin’s bones
 Registrar: Government regulator set up by the BC government to regulate mortgage brokers (pubic entity) - if they were
found liable, tax payers would be paying the $180 million 
o In contrast, Donoghue was the case of a private manufacturer for profit 
o Another difference is, this case dealt with purely economic losses and not personal injury 
o You can replace economic loss (and once this is done there is no damage) - this is not the case in personal
injury 
 Do we want the same rules to apply to public regulators as it does to commercial entities? 
o Hutch believes that the result was right, but he doesn’t understand how the Court found that there was no
proximity in this case 
o If not the investors, who did the registrar owe a DOC to? 
o He thinks that it would have been overridden by policy considerations anyways 
o Not everyone can be in the neighborhood – Hutch thinks that the bigger the group, the less likely they will be
found to be in the neighborhood 

Rankin v. JJ [2018] SCC

Facts One evening in July 2006, fifteen-year-old J and 16-year-old C were at C’s mother’s house, drinking and smoking marijuana.
C’s mother provided some of the alcohol. Sometime after midnight, the boys left the house to walk around the town and steal
valuables from unlocked cars. They entered Rankin’s Garage and found an unlocked car with its keys in the ashtray (they
said this was customary, but the court found this negligent). Though he did not have a driver’s license and had not driven on
the road before, C decided to steal the car and told J to get in. While they were on the highway, the car crashed, and J
suffered a catastrophic brain injury. Rankin’s Garage, C, and C’s mother were sued for negligence. The trial judge found that
R should have known that leaving an unlocked vehicle with the keys inside could result in intoxicated teenagers like J getting
hurt (DOC owed). The Court of Appeal upheld this after conducting a full duty of care analysis as laid out in the Anns test
and in Cooper v. Hobart, to which R appealed to the SCC.
Issue(s)  Did Rankin (the owner of the garage) owe J a DOC? 
 Does a business owner who leaves a car unlocked with the keys inside owe a DOC to someone who is injured after
stealing their car?
Decision Appeal allowed – no DOC owed
Reasons Karakatsanis J
 Anns test application 
 No consensus in previous case law on whether a DOC existed in similar situations (pre-Anns consideration) 
 To determine whether Rankin’s Garage owed J a duty of care, the majority looked at whether the garage owner should
have known that his failure to take care could cause harm to someone like J (part 1 of Anns test – reaffirmed in
Cooper v. Hobart).
 While the garage owner should have known that leaving a car unlocked with the keys inside could result in it being
 stolen, the evidence did not show that he should have known someone could be injured by a stolen car.
o This is because there was no evidence suggesting that a stolen vehicle would be driven unsafely—for example,
suggesting that it would be stolen by a young person.
o The majority noted that just because something is possible does not mean that it is reasonably foreseeable
under the law.
 Rankin’s Garage therefore did not owe a duty of care to J.   
Ratio  A business will only be liable in this kind of situation where both the theft and the unsafe operation of the stolen vehicle
should have been foreseen 
 To establish a DOC there must be clear evidence of the foreseeability of consequences of the negligence
Notes  Happened in Paisley, Ontario – Donoghue v. Stevenson occurred in Paisley, Scotland 
 If this case was between the garage owner and the owner of the car then there would have been a DOC – just because
you owe a DOC to one person, it does not mean you owe one to everyone 
 This case does not say that the garage owner does not a DOC, just that he did not owe a DOC to the boy 
 Hutch brings this back to the economic theories of negligence – the cost of prevention (locking the car) was nothing 
 Hutch thinks this was the wrong decision
o Rankin was the only way the boy was getting any money 

Remoteness
 Focuses on the nature of the damages
 Although the defendant caused harm to the plaintiff, are the damages too remote or not
reasonably foreseeable?
 General test for remoteness is: reasonable foreseeability

In Re Polemis and Furness, Withy & Co [1921] UK Court of Appeal

Facts Respondents are ship owners who chartered a ship to the appellant. Due to rough weather, there had been some leakage from
the cargo, so when the ship reached port there was gas vapor present below the deck. The appellant hired stevedores (people
employed at a dock to load and unload cargo from ships) to help unload the ship, and one of them knocked down a wooden
plank which created a spark, ignited the gas, and burnt the entire ship down. The arbitrators who were appointed found that
the fire had been caused by the stevedore’s negligence, thus holding the appellants liable. The appellants contended that the
damages claimed by the owners for the value of the ship were too remote (not within the realm of recovery). They argued
that the stevedores should be held liable for damages from the plank dropping but should not be held liable for the explosion
because of the causal chain of events – it was too remote and unexpected, so damages should not be recoverable.
Issue(s)  Was the destruction of the ship traceable to the stevedores?
 Did they have a duty to the ship owners or is this too remote?
 Is it necessary that the specific type of damage caused be reasonably foreseeable in order to be held liable for damages?
Decision Appeal dismissed – There was a duty owed by the stevedores – the destruction of the ship is traceable to the stevedores,
despite the fact that they could not reasonably have foreseen the damage that ensued
Reasons  Bankes LJ: It does not matter that a defendant could not reasonably have foreseen the type of damage that would result
from a negligent act
o The falling of the plank was due to the negligence of the defendants’ servants, and the fire was directly caused
by the falling of the plank  it is immaterial that the causing of the spark by the falling of the plank could not
have been reasonably anticipated
 Warrington LJ: The presence or absence of reasonable anticipation of damage determines the legal quality of the act as
negligent or innocent
o BUT if it be thus determined to be negligent, then the question whether particular damages are recoverable
depends ONLY on the answer to the question whether they are the direct consequence of the act
 Scrutton LJ: It is relevant to consider whether any reasonable person would foresee that the act would cause damage (if
he would not, then there would be no negligence) BUT if an act would or might probably cause damage, the fact that the
damage caused isn’t the kind anticipated is immaterial, so long as the damage can be traced to the negligent act and not
to an independent cause
o In this case, the damages could be traced to the negligent act of discharging the cargo in a way that knocked
 down the plank
Ratio  A negligent actor is liable for all direct results of the negligent act, even if they were not foreseeable before the accident.
Provided that a reasonable person would foresee that the act would cause damage of any sort.
 Polemis Test for Remoteness of Damages: is whether the damage was a direct result/consequence of the negligent act
(must be directly traceable).
Notes  There was a breach in SOC, there was a DOC owed to the owners of the ship, but the issue was whether the damages
were too remote
 Pre-Atkin judgment (reasonable foreseeability is irrelevant)
 Based on this test, it seems that there will not be liability when damages are indirect. If this is a ‘direct’ consequence,
then what would constitute indirect?

William Prosser: “Palsgraf Revisited” [1953]

 Leaving out of account, as did the New York court in Palsgraf, the fact that the woman was a passenger, there is
still a relation to be found between the parties
o The connection is one of close proximity in time and space, and direct causal sequence, between a
negligent defendant and the person he injures
 Once it is conceded that negligence can be transferred to closely connected plaintiffs, the question becomes only
one of where to draw the line
o The answer of whether duty of care extends to plaintiffs in specific circumstances is: it does if the courts
make it so
 There is a fundamental and foolish inconsistency in saying that a defendant who threatens injury to A is liable for
unforeseeable consequences to A, whether they be death from a weak heart or loss of an eye, but is not liable for
the same unforeseeable consequences to B, who is standing beside A and virtually in his shoes
o Put Palsgraf on the train beside the passenger, with both of them injured by the explosion; is it not utter
nonsense to say that recovery turns on which of them owns the package?

Overseas Tankship (UK) v. Morts Dock & Engineering (The Wagon Mound, No 1) [1961] Privy Council

Facts Wagon Mound is a big ship that ships oil around the world. It comes from the Middle East to Sydney Harbor, only intending
to spend about 48 hours there to unload at Caltex Wharf. While unloading, oil split into the wharf at Sydney Harbor. The
next morning, the Wagon Mound left the harbor without removing the oil (egregious negligence). Across the bay from where
Wagon Mound was docked was Morts Dock, who noticed the oil and became concerned. They called Caltex and asked
whether they could continue with their operations which involved wielding because they were in the business of repairing
ships. Caltex’s opinion was that they could carry on because the oil wouldn’t ignite on water. They began their actions
cautiously however; the oil was ignited when molten metal dropped from the wharf and came into contact with cotton waste
floating on the water’s surface. The fire seriously damaged the wharf and two ships docked there. Morts Dock sued Overseas
Tankship (who were chartering the Wagon Mound) for damages. Overseas Tankship claimed that yes, they did breach the
SOC, yes, they did owe a DOC (it was reasonably foreseeable that if they let oil run out of the ship it might do damage to a
neighboring wharf) BUT the damage caused was too remote because it wasn’t foreseeable that that type of damage would
occur. They would pay for the oil clean up and whatever damage oil would have caused to the wharf, but not what happened
as a result of the fire. At trial, Morts was successful to which Overseas Tankship appealed.
Issue(s)  Does the type of damage need to be foreseeable in order to recover?
 Is the Polemis test accurate, or should reasonable outcomes be considered when determining liability?
Decision Yes – appeal allowed in favor of defendant
Reasons Although the Court held that the defendants were negligent for spilling the oil, the defendant could not have been reasonably
expected to know that the oil was capable of being set on fire when spread on water  the defendants can’t be held liable for
damages.
Viscount Simmons: NEW STANDARD
 The Polemis test should no longer be regarded as good law (Privy Council is not bound by the Court of Appeal)
o It does not seem consonant with the current ideas of justice or morality that, for an act of negligence, however
slight or venial, which results in some trivial foreseeable damage, the actor should be liable for all
consequences, however unforeseeable and however grave, so long as they can be said to be “direct”
o It is a principle of civil liability, subject only to qualifications which have no present relevance, that a man
must be considered to be responsible for the probable consequences of his act
 To demand more is too harsh a rule, to demand less is to ignore that civilized order requires the
 observance of a minimum standard of behavior
o If some limitation must be imposed on the consequences for which the negligent actor is to be held
responsible, why should that test (reasonable foreseeability) be rejected which, since he is judged by what the
reasonable man ought to foresee, corresponds with the common conscience of mankind, and a test (the “direct”
consequence) be substituted which leads to nowhere but the never ending and insoluble problems of causation
o It is proper when considering tortious liability for negligence to analyze its elements and to say that the
plaintiff must prove a duty owed to him by the defendant, a breach of that duty by the defendant, and
consequent damage
 There can be no liability until the damage has been done  not the act but the consequences on
which tortious liability is founded
 There is no such thing as “liability in the air” – the neighborhood must end somewhere
o Liability is in respect of the damage caused by the action alone
 If the liability for injuries depends on the foreseeability of the plaintiff as an injured party, then the
liability for damages should depend on the foreseeability of the resulting damages
Ratio New Remoteness Test: Liability for damages is based upon the reasonable foreseeability of the outcome – could the
defendants be reasonably expected to know that an act would result in damage of that nature?
Notes  In this case, the Privy Council decided that the law needed to change and overrules Polemis
 The defendant was prepared to pay for damages that resulted from the oil spill but NOT from the fire (the fire damage
was too remote)
 Plaintiff wanted to use Polemis  the fire was a direct consequence of the negligent act (the oil spill) - the Court said
that it’s not about direct consequences but rather, reasonable foreseeability
 Overseas Tankship were found liable for the damage to a ship berthed at the dock in The Wagon Mound 2
o The court, in this case, had a different factual finding and decided that oil can ignite on water - it is reasonably
foreseeable and as the judicial committee decided in Wagon Mound 1, reasonable foreseeability was the new
remoteness test
o Two doctrines in play to explain the two different results from the same incident
 Stare Decisis (Law): higher courts bind lower courts in later decisions – new remoteness test applies
 Res Judicata (Facts): the findings in one case will only bind the same parties in later cases
 Hutch thinks that the test is a good one, but it was applied poorly in this case

Smith v. Leech Brain & Co Ltd. [1962] UK

TSR – exception to reasonable foreseeability test from Wagon Mound
Facts Smith’s husband worked in a factory owned by Leech Brain galvanizing steel. He had previously worked in the gas industry,
making him prone to cancer. One day at work, he came out from behind his protective shield when working and was struck
in the lip by molten metal. The burn was treated, but he eventually developed cancer and died three years later. The
protection provided to employees during their work was very shoddy.
Issue(s)  Were the burn and the cancer reasonably foreseeable by the defendant?
 Is the defendant liable for the injuries (the burn and the cancer), or were one or both of the injuries too remote?
Decision No – judgment in favor of the plaintiff
Reasons Lord Parker CJ
 Is there negligence?
o Yes – any reasonable employer must have foreseen the risks involved in this job, and that proper protection
was necessary for such a man
 Was the cancer, and the death resulting from it, caused in whole or in part by the burn? 3 possible viewpoints
1. Cancer may have been caused by the burn itself without there being any pre-malignant condition (though it
was admitted that that would be highly unusual)
2. It was not merely a pre-malignant condition and the malignancy itself must have existed before the accident
3. Previous exposure resulted in pre-malignant changes, and the burn was the promoting agency which made the
cancer develop
 This view was chosen on a balance of probabilities
 Are damages too remote?
o Wagon Mound ruling does not change the fact that it has always been the law of this country that a tortfeasor
takes his victim as he finds him – “thin skull” rule
 Kennedy J, Dulieu v. White Sons: “If a man is negligently run over or otherwise negligently injured
in his body, it is no answer to the sufferer’s claims for damages that he would have suffered less
injury, or no injury at all, if he had not had an unusually thin skull or an unusually weak heart.”
 o The test is not whether Leech Brain could reasonably have foreseen that a burn would cause cancer and that
Mr. Smith would die
 The question is whether these defendants could reasonably foresee the type of injury which he
suffered, namely, the burn; and that, therefore, since the cancer was merely an extension of the burn,
which they should reasonably have anticipated, the defendants were liable in damages
 The extent is not what needs to be foreseen
Ratio  A defendant is liable for all consequences that result from a reasonably foreseeable injury, even if those consequences
are not foreseeable and are exacerbated by a pre-existing condition. It is the type of injury that must be foreseeable, not
the extent of it.
 The “Thin Skull” Rule: For actions in tort, you take a plaintiff as he or she comes – the fact that they have a condition
that led to more damages than normal is not a factor in determining liability for damages
Notes  This case involves the DOC between an employer and an employee when the employee was doing what he was
supposed to be doing while on the job
 Applying this to the Wagon Mound: in this case, the cancer was not foreseeable so if you’re going to let Smith recover,
then why can’t you say that the oil spill was the promoting agency to the fire? (even though there was no pre-existing
condition)

Cotic v. Gray [1981] Ontario Court of Appeal

Facts The plaintiff’s husband suffered serious injuries in a car accident caused by the defendant’s negligence. Prior to the accident,
the husband was suffering from depression and neurotic behavior – he became worse post-accident, became psychotic and
eventually committed suicide 16 months later. When the wife sued for damages, the jury found that the accident caused or
contributed to his death, but the defendant denied liability for the death because the suicide wasn’t a reasonably foreseeable
consequence of the negligent action (although the injury was).
Issue(s) Did the defendant’s liability for the accident extend to the plaintiff’s husband’s suicide?
Decision Yes – liability extends to the suicide
Reasons A plaintiff must take a victim as he is, even if this is a psychologically-vulnerable person. You can’t ascribe independent
causal significance to a particular vulnerability – The “Thin Skull” Rule applies a catch-all principle. Damages are not too
remote.
Ratio  Even if the ultimate risk is not foreseeable, the defendant must take the plaintiff as he finds them.
 The TSR applies beyond mere physical vulnerability and includes psychological vulnerability.
Notes Hutch’s Thoughts (he likes this decision)
 Seems to be a return to Polemis. What good does reasonable foreseeability do in these cases if we allow suicide to be an
injury that extends from a car accident? This case really pushes remoteness to the limits (contradicts Wagon Mound
which was intended to be a limiting tool)
o If you allow recovery for suicide then you’ve basically blown out the Thin Skull Rule, you’ve blown out
remoteness. If we count suicide as a consequence of a road accident (not foreseeable at all), then the concept of
remoteness really does not exist. In this case suicide was allowed to be recovered for.
Hard to make the argument that this is about the extent of the injury – the suicide seems to be a new or different kind of
injury, rather than an injury to the extent of the original injury

Hughes v. Lord Advocate [1963] UK House of Lords

Facts Some Royal Mail employees had removed a manhole to work under the road. They left 4 paraffin lamps around it (in attempt
to block it off). They took a tea break, and when this happened, Hughes (a young boy), went into the manhole to explore with
a paraffin lamp that was left there. After getting back out, the lamp was either dropped or knocked into the hole and an
explosion resulted, causing Hughes to fall back in where he was badly burned. The lower court dismissed the case stating
that the actual event that led to the injuries was the explosion, and that it was not foreseeable as it resulted from numerous
unlikely events. Hughes appealed.
Issue(s) Does the foreseeability of the actual event that caused the injury matter, or just the foreseeability of injury?
Decision Appeal allowed – in favor of the plaintiff
Reasons Lord Reid
 Factors to consider
1. A duty owed by the workmen.
2. The fact that if they had done as they ought to have done there would have been no accident.
 3. The fact that the injuries suffered by the appellant, though perhaps different in degree, did not differ in kind from
injuries which might have resulted from an accident of a foreseeable nature
 Defendant argues that the damages the plaintiff suffered was of a kind which was not foreseeable. The explosion was the
real cause of the injuries and that the explosion was unforeseeable.
 However, this accident was caused by a known source of danger but was caused in a way which could not have been
foreseen, and in my judgment that affords no defense.
Lord Guest
 In order to establish a coherent chain of causation it is not necessary that the precise details leading up to the accident
should have been reasonably foreseeable
o It is sufficient if the accident which occurred is of a type which should have been foreseeable by a reasonably
careful person.
 Concentration has been placed in the courts below on the explosion which it was said could not have been foreseen
because it was caused in a unique fashion.
o This is to concentrate on what is really a non-essential element.
 The test might better be put thus: Was the igniting of paraffin outside the lamp by the flame a foreseeable consequence
of the breach of duty?
o In the circumstances there was a combination of potentially dangerous circumstances against which the Post
Office had to protect the plaintiff.
o If these formed an allurement to children it might have been foreseen that they would play with the lamp, that
it might tip over, that it might be broken, and that when broken the paraffin might spill and be ignited by the
flame.
o All these steps in the chain of causation seem to have been accepted by all the judges in the courts below as
foreseeable.
o But because the explosion was the agent which caused the burning and was unforeseeable, therefore the
accident, according to them, was not reasonably foreseeable.
o In my opinion this reasoning is fallacious.
Ratio As long as the general type of injury can be foreseen from a negligent act, there will be proximate cause (extent of the injury
and the foreseeability of the specific event are irrelevant)
Notes  Does not completely overturn Wagon Mound because based on the facts in that case, it was deemed that it was
unreasonable to assume that oil would light on fire on water – in this case, the paraffin lamp was deemed a reasonable
source of fire
 In relation to Palsgraf: could she have argued that the type of injury was foreseeable (one of the people could have fallen
onto her and injured her) even if the actual events that occurred leading to the injury were not foreseeable (the scales
falling)

Clarence Morris: “Duty, Negligence and Causation” [1952]

 Whether the particular accident and the resulting damages is foreseeable can be classified into 3 categories.
1. In some cases, damages resulting from misconduct are so typical that it is impossible to convince judges
and jurors that they were unforeseeable.
2. In some cases, the freakishness of the facts refuses to be downed, and any description that minimizes it is
viewed as mis-description.
3. Between these extremes are cases in which the consequences are neither typical nor wildly freakish.
 In the 3rd class of cases, foreseeability can be determined only after the significant facts have been described.
 If the official description of facts adopted by the court is detailed, the accident is called unforeseeable.
o A defendant may induce psychological support for his position if he can convince judges and jurors that
freakish details are a prominent and significant part of the case.
 If it is general, the accident is called foreseeable.
o A plaintiff, therefore, is likely to dispose judges and jurors in his favor if he can persuade them that
unusual aspects of the case are insignificant details.

Intervening Parties – Novus actus interveniens

Bradford v. Kanellos [1974] SCC

Facts The Bradfords were at a restaurant owned by Kanellos when a fire broke out on the cooking grill. The restaurant’s grill was
equipped with a fire extinguisher (precaution). The fire extinguisher made a strange noise when it was operated, which
 caused an unidentified person to should out that the gas was escaping and that there would be an explosion - which caused
panic within the restaurant. While people rushed out, Mrs. Bradford was pushed from her seat and sustained an injury. At
trial, the court awarded general damages to Mrs. Bradford and special damages to the husband (for expenses incurred as a
result of the wife’s injuries), finding negligence in the flash fire because the grill had not been cleaned as efficiently as it
should have been; the sound from the fire extinguisher, not the fire itself, caused panic and while the act of yelling out was
“idiotic”, the panic could have been foreseen. This was overturned on appeal, as the appeal court found that it should not be
held that the person guilty of the original negligence (failure to clean the grill) ought reasonably to have anticipated the
subsequent acts which were the direct cause of the injuries and damages suffered by the plaintiffs. Braford appealed to the
SCC.
Issue(s)  Did the defendant do enough to discharge their DOC?
 Were the damages sustained by Mr. and Mrs. B sufficiently connected to the negligence of the defendant?
Decision Appeal dismissed – judgment in favor of the defendant
Reasons Martland J – there was an insufficient connection between the negligent act and the damages that were sustained
 It is clear that the injury resulted from the hysterical conduct of a customer in reaction to the fire extinguisher
performing its proper function – while the defendant was negligent in having too much grease build up on the grill, they
discharged their DOC by having the extinguisher present
 The majority of the SCC adopted the ONCA’s holding that “it should not be held that the person guilty of the original
negligence resulting in the flash fire on the grill ought reasonably to have anticipated the subsequent intervening act or
acts which were the direct cause of the injuries and damages suffered by the plaintiffs”
o Chaotic outcomes wouldn’t have been reasonably anticipated
 No recovery for the plaintiff because the intervening act wasn’t reasonably foreseeable; not reasonably foreseeable that
someone would panic from the use of a safety device
Spence J (dissent) – defendant should be liable
 Panic could have been foreseen, as it was foreseeable that grease would necessitate the use of the extinguisher, which
would create the noise causing hysteria, which would cause injury – it was a “human” way to react under the
circumstances
 Even if the action of yelling was negligent, this would just mean that the plaintiffs would have an action against both
Kanellos and the yeller
Ratio  When there are measures in place to eliminate potential injuries from negligent acts, and they work properly in
eliminating the risk when such an act occurs, then improbably outcomes resulting from the correct employment of the
measure cannot be attributed to the original negligent act
 If a consequence is not within the scope of what is reasonably foreseeable, then there can be no liability
 If there is an intervening act (novus actus interveniens) that is not foreseeable, the original negligent tortfeasor is not
liable
 You can be held liable for damages caused by novus actus interveniens (but it depends on the facts)
Notes  In relation to Rankin: Could he have argued that the boys were intervening actors?
 Ironic that the safety precaution ends up having a causal connection to the accident (similar to Hughes)
 Re-introduces the Wagon Mound test (both judges believe that the remoteness test should be reasonable foreseeability –
but they disagree on its application in this case)
 Hutch: either way you decide this case is tough (plaintiff certainly did nothing wrong, but the defendants had
precautions in place)
o In these circumstances where both cases are tough, find defendant liable not only because they have insurance
but because they were negligent

Home Office v. Dorset Yacht Co Ltd. [1970] House of Lords

Facts Several “borstal boys” (young offenders between 15 and 20) were under the supervision of three officers when they were
working on an island. The officers went to sleep and left them to their work. Seven of the boys escaped, stole a yacht and
crashed it into another yacht that was owned by Dorset Yacht. They also boarded Dorset’s yacht and caused further damage.
Dorset sued the Home Office (who oversaw the running of the ‘borstal system’ where the offenders were being detained) for
the amount of the damage. Home Office is a public government body, the “Ministry of Corrections”. The ground for the
claim was that the carelessness of the officers allowed the trainees to escape, which allowed them to cause the damage.
Issue(s)  Can a person be held liable for the tortious actions of another party towards a third party, our would these damages be
too remote?
 Does foreseeability negate the NAI defense?
 To what extent is the public identity of the defendant relevant?
Decision Appeal dismissed in favor of the plaintiff – damages not too remote
Reasons Lord Reid – the damage to Dorset’s yacht would not have occurred if the officers had not been negligent and instead had
continued to monitor the offenders. Home Office was liable, despite the intervening actions of the offenders in actually
causing the damage
 This is a remoteness problem
 Three claims were made by the government that the court had to deal with
o (1) There is no authority to impose a duty like this – REJECTED
 Lord Reid dismissed this, saying that times have changed and now liability can be found in cases
where the outcome was not foreseeable, so long as it is established that the initial act was negligent
(per Wagon Mound)
o (2) No person can be liable for the acts of another adult who is not their servant – REJECTED
 This is not true in this case because the people that caused the damage were supposed to be
supervising – it was essentially their job to make sure nothing bad happened
 The officers could’ve foreseen the prisoners escaping (and that there would be damages as a
result)
 There was a duty owed to surrounding property owners, this is why the officers were there and they
failed to do their job
 Foreseeability alone is not enough to diffuse Novus Actus Interveniens – there must be a high
probability (very likely to happen) for the NAI to be dismissed
 Where human actions form a link between the original wrongdoing of the D and the loss
suffered by the P, that action must have been something very likely to happen if it is not to
be regarded as NAI
 The damages in this case were very likely to happen (in large part because it was the job of
the offers to prevent these sorts of things)
o 3) Public policy considerations require that the officers should be immune from this duty – REJECTED
 Lord Reid says there are no obvious policy reasons to prevent the duty here
 Therefore, the damages weren’t too remote  Court was free to establish this new class of duty, intervening action
could have been foreseen, no sufficient public policy concerns that override the creation of this duty
Lord Diplock (concurring in result)
 This is a duty problem
 In new situations where duty is being established, the characteristics of that situation must be compared to those in
situations accepted to constitute negligence, those situations must be analyzed to see if they give rise to a DOC; if there
is a discrepancy, it must be determined if the discrepancy is sufficient to prevent a DOC
 Holds that there is a DOC owed by Home Office to Dorset in this case because of proximity between the parties 
DUTY DID EXIST
o DOC depends on proximity of the parties, proximity is determined on a case-by-case basis depending on the
facts and circumstances of the case. Were the injured parties within the ‘zone of liability’ (from Cooper v.
Hobart)?
o “I should therefore hold that any duty of a borstal officer to use reasonable care to prevent a borstal trainee
from escaping from his custody was owed only to persons whom he could reasonably foresee had property
situate in the vicinity of the place of detention of the detainee which the detainee was likely to steal or to
appropriate and damage in the course of eluding immediate pursuit and capture.”
 DOC was owed to neighboring boat owners
 Holds that if vicarious liability of the Home Office is found, then by reason of proximity, Home Office should be found
to have breached the DOC they owed to Dorset
Viscount Dilhorne (in dissent)
 This is a duty problem
 Does not accept the suggestion that there should be a new duty imposed on the Home Office and those in charge of
people in lawful custody. There is no basis of this duty in the common law and the Court should not therefore find one
in absence
 If the government is made liable, it will result in a change in the law and that such a change is up to the Legislature, not
the judiciary.
 When the going gets tough, give it to the legislature
Ratio  If the intervening action was a likely outcome of the initial act, then the original negligent party will be responsible to
the third party.
 For a defense of Novus Actus Interveniens to be struck down, the intervening act must be very likely to occur, not just
foreseeable. This is a TIGHTENING OF THE TEST FOR INTERVENING ACTS.
Notes  Involves a government agency (like in Cooper v. Hobart)

Lamb v. London Borough of Camden [1981] UK

Facts Mrs. Lamb owned a house that she rented out to a tenant when she moved to NYC. Borough workers employed by the local
council decided to replace a sewer in the road next to the house. Accidentally, they struck a water main while doing this
work, which caused serious flooding and structural damage to the house. The house was unsafe to live in, so the tenant had to
move out, and the furniture had to be taken out in order for repairs to be done. When Lamb returned to the house, squatters
had taken over. She managed to get them out with the help of her lawyers and put up some boards to prevent them from
coming back in, but they returned again. When she was finally able to re-take possession of the house, she sued the Council
for the damages caused by the squatters (roughly 30,000 pounds – purely economic loss). The Council argued that they were
responsible for the damages caused by the water break, but not for the damage caused by the squatters because they were the
result of unforeseeable acts by an intervening 3rd party (too remote). They also claimed that they should not be liable because
they are a public entity (like in Cooper v. Hobart).
Issue(s)  Was the damage caused to Mrs. Lamb’s home a foreseeable consequence of the Borough’s negligence?
 Does the test set out in Home Office help us to reach the right conclusion?
Decision No – the damage from the squatters was not a foreseeable consequence of the Borough’s negligence. Council not liable for
the damages suffered  All judges analyzed as a remoteness problem and came to this same conclusion, but provided
different reasons
Reasons Lord Denning
 Rejects the test from Home Office being too expansive and allowing damages to be assessed when they should not
 He says: “the truth is that all these three, duty, remoteness and causation, are all devices by which the courts limit the
range of liability for negligence or nuisance.” He states that in all of these types of cases what really lies behind the
judicial decisions is public policy.
o Basically, saying rules are just a cover as to policy decisions. In this case he bases his decision pretty much
solely on policy considerations
 He says to scrap DOC, SOC, remoteness, etc. and to just determine cases based on public policy. In cases like this
insurance should be the provider of funds, not the courts – Lamb’s insurers should pay, rather than the courts.
o The incurred costs are Mrs. Lamb’s fault because she didn’t have insurance, which would have helped cover
the costs
 Looks at whose job it was to do something to keep out the squatters and determines that this was Mrs. Lamb’s job. She
“paved the way for squatters by moving out all her furniture and leaving the house unoccupied and unfurnished”
o No one, throughout the course of the squatters taking over the house, suggested that it was the Borough's fault
or contacted them to put a stop to it.
o Mrs. Lamb claims she didn’t have enough money to cover these costs – this is where Denning links in the idea
of her contribution to the costs because she didn’t have insurance (we should encourage people to get
insurance)
 Therefore, although the damage to the house is a foreseeable outcome of the water main breakage using Lord Reid's test,
damages should not be assessed for public policy reasons.
Oliver LJ
 Reid's test does not limit damage assessment enough, and that it should include a more "stringent standard" –
intervention has to be almost inevitable
o Relationship is different between Home Office and here because in that case the Home Office took control of
the borstal boys, but in this case the Council wasn’t taking control of the squatters
 He holds that the straight test of foreseeability can produce results which “extend the ambit of liability beyond all
reason” in cases where the acts of third parties are concerned. He affirms the correctness of Denning’s test but adds one
caveat: there may be a more stringent standard than merely geographical or temporal proximity in order to find
sufficient connection
Watkins LJ (Hutch says WTF to this)
 Describes the authorities that have been presented are like a “maze” and he has trouble navigating them
 Says there should be no gloss put onto the test in Wagon Mound and just apply it instinctually
 Based on this, he states that in cases like these judges must simply use their instincts to decide whether or not the
outcome is too remote to deserve damages. He says that there will usually be a clear common-sense answer – here it is
to dismiss the appeal based on his instinctive feeling that the squatters’ damage was too remote to be recoverable.
Ratio Reasonable foreseeability of damages is not enough in itself to justify awarding damages: courts must consider the public
policy implications (Denning) or discover a more stringent standard to ensure that damage awards are logical (Oliver).
Notes  Hutch agrees for the most part with Denning’s idea that policy drives decisions but there is an issue with scrapping all
legal rules (what are we doing as lawyers then?)

Causation
 Causation is about facts
 Fault is about values
 Causation is an endless battle because everything is a cause of everything (difference between ‘the’ cause and ‘a’
cause)
 Fault and causation are very different inquiries
o An innocent person walking on the sidewalk who gets hit by a car is a cause of the accident because if they
were not there, the accident would not have happened
o This does not mean they were at fault for the accident
 The SCC says causation is all about facts but clearly, it’s also about fault (they collapse them together)
o Causation will always be a factual and an evaluative exercise
 Though they say causation is an entirely factual inquiry, the Court is not interested in the cause of the accident but
whether the defendant the caused the accident
 Causation is a little bit of garbage because we never know what happened for sure (the facts are very rarely
uncontested and 100 percent clear)
o The real question here is: Is there a sufficient connection between what the defendant did and what
happened to the plaintiff that we are prepared to allow the defendant to pay for the plaintiff’s harms? Or is
the defendant at fault?
 This is more evaluative than factual
 Who has the burden of proving causation has an enormous impact on judicial decisions
 Causation is about policy
 When you go to court, you have to put forward sufficient evidence to make something a genuine possibility (material
contribution or possible cause) – you can’t just pull it out of nowhere
 Why don’t we have a regime in tort law that if I cause damage, I will pay (scrap SOC, DOC, etc.)
o If you are going to be found liable in any event, why bother being careful (not a good deterrence)
o There are also certain kinds of risky behavior that we might actually want to encourage in society (i.e.
rescuing, offering medical services, etc.)
 We allow certain kinds of risky behavior but at the same time, we want to put a limit on liability
o SOC, DOC, remoteness, etc. are all devices to contain liability

Barnett v. Chelsea & Kensington Hospital Management Committee [1968] UK – The ‘but for’ Test
The Basic Case of Causation
Facts After drinking tea together, 3 workers became ill, and started to vomit with persistence. At 8:10 am they went to the hospital.
Upon arrival, the nurse called a doctor and informed them of the situation. The doctor, who was at home sick as well, told
them to go home and to call their own doctors. Barnett subsequently died at about 1:30 pm.
Issue(s) Was the defendant’s negligence the cause of the death, or would it have inevitably happened anyway?
Decision No causation – judgment in favor of the defendant
Reasons Nield J
 The defendants breached the SOC (reasonable and prudent medical staff) and the DOC (we don’t owe a duty to
everyone but once you start talking to them and listen to complaints, you do owe a DOC) to the deceased by dismissing
the deceased’s complaints without admitting him/treating him BUT no causation
 On the ‘but for’ test, based on the evidence, even if the man had been admitted to the hospital upon his arrival, he
would likely have died
o There was only one antidote for arsenic poisoning, and it was not readily available and could probably not
have been administered in time to save his life – they would likely not have even been able to start treatment
until after 12:00 pm (the chances of survival were not good)
o The man would NOT have died ‘but for’ the doctor’s negligence – the factual causation was arsenic (not the
doctor’s negligence)
 In cases of cause, the burden is on the plaintiff to prove that the defendant’s negligence caused the harm
o They must prove that without the negligence, the harm would not have occurred
o The wife did not do this – it is probably that the man would have died even without the hospital’s negligent
refusal
Ratio  The burden of proof is on the plaintiff to prove that the negligent actions of the defendant caused the outcome, i.e. they
must establish that if the negligent act did not occur, then the damage would not have happened
 The ‘but for’ test: The causal relationship between the alleged negligence (or actual careless conduct) and the injury
must be made out by the evidence and must be consistent with the context
Notes  Note: the primary culprit in this case was the person who poisoned the tea with arsenic (but the tort action is not against
them)
o This is problematic for cases involving doctors because it is reasonable to say that most of the people that
doctor’s see already are suffering from some form of injury
 Hutch thinks this is problematic because you could say that the doctor’s negligence deprived him of the chance of
survival
o Based on the facts and the expert testimony, you could say ‘but for’ the defendant’s negligence, the plaintiff
could have survived
o Nothing in this case indicates that it is absolutely clear that the hospital had nothing to do with the man dying
 If you have a test that puts the onus on the plaintiff and you’re not sure what happened, in most cases, the plaintiff will
lose (heavily loaded against plaintiffs)
o Medical malpractice suits are especially difficult for plaintiffs to meet the burden of proving causation and the
‘but for’ test, because all of the evidence and the facts are held by medical professionals
 In cases where it is impossible to determine causation, and the defendant is negligent, and the plaintiff did nothing
wrong, why shouldn’t the defendant be held liable?
 Hutch hates the ‘but for’ test – he believes it gets you nowhere
o They deprived Barnett of a chance to survive

McGhee v. National Coal Board [1972] UK – Material Contribution

Two potential causes
Facts McGhee was employed by the respondents as a laborer at their brickworks. His regular job was to empty pipe kilns, but one
day he was sent to empty brick kilns. Working made him sweaty which then lead to powdered brick being stuck onto his
skin. There were no cleaning facilities (showers) at work, so he had no way of cleaning the dust off of himself until he was
home. He had to bike home dusty and dirty. The plaintiff then contracted dermatitis (an extensive skin irritation). The exact
cause of the disease was unknown at the time, but there was medical evidence provided for the point that washing would
lessen the risk of developing the dermatitis. The defendants argued that their negligence did not cause the dermatitis – the
actual cause was his biking home and getting sweaty. The plaintiff argued that it was the negligence of the defendants (not
providing cleaning facilities) which was the real cause (if he cleaned himself before biking home, he wouldn’t have gotten
the dermatitis).
Issue(s) When a defendant has been proved to have negligently contributed to the development of an injury, should they be liable if it
can be shown that the plaintiff’s actions also led to the development, and the exact cause is unknown?
Decision Appeal allowed – judgment in favor of the plaintiff
Reasons Lord Reid
 It has always been the law that a pursuer succeeds if he can show that fault of the defender caused or materially
contributed to his injury
o There may have been two separate causes, but it is enough if one of the causes arose from the fault of the
defender
o The plaintiff does not need to prove that this cause would o itself have been enough to cause him injury
 From a broad and practical viewpoint, I can see no substantial difference between saying that what the respondents did
increased the risk of the injury to the appellant and saying that what the respondents did made a material contribution to
his injury
o You don’t need to show that the defendant’s negligence materially contributed to the injury, it is sufficient to
show that the defendant’s negligence materially contributed to the RISK of injury
Lord Wilberforce (most important judgment)
 Where a person has, by breach of duty of care, created a risk, and injury occurs within the area of that risk, the loss
should be borne by him unless he shows that it had some other cause (onus is on the defendant)
 It doesn’t make sense from an evidential point to say that the plaintiff should have to assume the burden of proving more
when it has already been proven that the defendant should have taken certain precautions because without them there is
an added risk of injury/disease, and as a result of the negligence the employee suffered the foreseen harms
o These injuries were foreseeable, so the defendant should bear the cost of their negligence
o Employers should be liable for injuries that are squarely within the risk they created as a consequence of
negligence
 o When the causation of the injury is not clear, the onus should be on the defendant to prove evidence contrary
to causation, otherwise they should bear the burden of injuries, NOT on the plaintiff (contrary to Barnett v.
Chelsea & Kensington Hospital).
Lord Simon of Glaisdale
 Where an injury is caused by two (or more) factors operating cumulatively, one (or more) of which factors is a breach of
duty and one (or more) is not so, in such a way that it is impossible to ascertain the proportion in which the factors were
effective in producing the injury or which factor was decisive, the law does not require a pursuer or plaintiff to prove the
impossible, but holds that he is entitled to damages for the injury if he proves on a balance of probabilities that the
breach or breaches of duty contributed substantially to causing the injury.
 In this case, a failure to take steps which would bring about a material reduction of the risk involves a substantial
contribution to the injury.
Lord Salmon
 The burden rests on the P to prove, on a balance of probabilities, a causal connection between his injury and the D’s
negligence.
 It is not necessary to prove that the D’s negligence was the only cause of injury.
 A factor, by itself, may not be sufficient to cause injury but if, with other factors, it materially contributes to
causing injury, it is clearly a cause of injury.
 The true view is that, as a rule, when it is proved, on a balance of probabilities, that an employer has been negligent and
that his negligence has materially increased the risk of his employee contracting an industrial disease, then he is liable
in damages to that employee if he contracts the disease notwithstanding that the employer is not responsible for other
factors which have materially contributed to the disease.
Ratio  In cases where there are two or more contributing factors to an injury, one of which is a breach of duty and one is not,
and it is impossible to tell which one truly caused the injury, the plaintiff can recover if he can prove on a balance of
probabilities that the defendant’s negligence and breach of DOC materially contributed to the risk of injury
 If you create a risk by your negligence and the plaintiff’s injuries are consistent with that risk, the negligent party bears
the burden of showing that in this case, the plaintiff’s injuries weren’t caused by the negligence
Notes  Hutch thinks this case is a bit ridiculous – the cause of the accident was the dirt on him (nothing about the sweating on
the bike was negligent)
 This case is an alternative to the ‘but for’ test
 Transferring the onus to the defendant is a good thing because it encourages them to put out and discover information
o Relevant to tobacco companies, etc.

Wilsher v. Essex Area Health Authority [1988] UK

Many causes
Facts Wilsher, an infant, developed a condition in the first months of his life. There were many possible causes of his condition (5),
including an irregular partial pressure of oxygen in the body, which the Authority failed to monitor properly. However, they
did not negligently perform any of the other potential causes (there are many things that could lead to a premature baby
becoming blind). The infant developed problems with its eyes.
Issue(s) Does the McGhee principle apply when there are numerous possible causes of a disease, and the defendants only caused one
of them?
Decision No causation – judgment in favor of the defendant
Reasons Lord Bridge of Harwich
 The McGhee principle does not apply to this case
 In McGhee there was only one possible factor leading to the injury (the brick dust) but in this case there were numerous
possibilities, and it is not known whether the Authority’s negligence actually led to the injury
 It is equally likely that any of the other possible causes created the injury
 There can be no presumption here that the negligence led to the injury and therefore the Authority cannot be held liable
Ratio  The McGhee principles does not apply unless there is only one cause of injury, and it happened as a result of the
defendant’s actions
 Defendants cannot be held liable for an injury if their negligence only led to one of numerous cases, and it cannot be
determined what actually caused the injury
Notes  Best information is: out of 5 potential causes, 1 of them being negligent
o Evidence shows that it likely wasn’t the negligence – 4 to 1 odds
 If you find the defendants liable here, in every case going forward, you’re going to have to find them liable for every
other case that comes after it (policy)
o Hutch thinks this is ridiculous – if you want to avoid liability just don’t be negligent (we should incentivize
 people to be more careful)
o Why should a baby have to carry the burden of a hospital’s carelessness?

Snell v. Farrell [1990] SCC

More like McGhee than Wilsher – 2 causes (negligent and a natural)
Facts The plaintiff became blind in one eye following a cataract operation which was performed by the defendant/appellant doctor.
After injecting the plaintiff with an anesthetic, the doctor noticed a small discoloration which he stated on discovery was a bit
of bleeding, and after palpitating the idea, he proceeded with the operation. The doctor was found to be negligent by the trial
judge. The trial judge accepted the facts from the expert testimony that where there is bleeding in this kind of operation, it
should have been stopped and he should have waited. The decision to continue with the operation despite the bleeding was
determined to be a possible cause of the blindness but no expert was able to state with certainty what caused the atrophy in
this case (could have also been from a stroke). The trial judge applied McGhee and shifted the onus of disproving cause to
the defendant. This decision was affirmed by the Court of Appeal and a final appeal was made to the SCC.
Issue(s) Does the traditional approach to causation work in malpractice suits? Or is it no longer satisfactory because plaintiffs in
malpractice cases are being deprived of compensation because they cannot prove causation where it in fact exists?
Decision Appeal dismissed – judgment in favor of the plaintiff
Reasons Sopinka J
 The defendant breached the DOC and SOC (reasonable and prudent ophthalmologist – he did not follow the custom)
 The traditional principle of causation is that the plaintiff must prove on a balance of probabilities that, ‘but for’ the
conduct of the defendant, the plaintiff would not have sustained injuries complained of (‘but for’ test NOT material
contribution)
 Within this principle lays two underlying factors
o The onus is on the party who asserts the proposition (usually the plaintiff)
o Where the subject matter of the allegation lies particularly within the knowledge of one party, that party may
be required to prove it
 In malpractice suits, the facts lie within the knowledge of the defendant, who has more knowledge in the area in which
they practice
 “The legal and ultimate burden remains with the plaintiff, as in the traditional approach, but in the absence of evidence
to the contrary adduced by the defendant, an inference of causation may be drawn, although positive or scientific proof
of causation has not been adduced.”
 If some evidence is adduced by the defendant, the judge must weigh all of the evidence before him
o In this case, the evidence supported the drawing of an inference of causation between the appellant doctor’s
negligence and the respondent’s injury (causation is not determined with scientific precision)
o The defendant provided weak rebuttal evidence
Ratio  The ‘but for’ test is the appropriate test for determining factual causation in Canada, however judges should take a
pragmatic approach to these inquiries
 It is appropriate to lower the burden of proof on the plaintiff where the facts lie within the knowledge of the defendant
(very common in malpractice suits) – little affirmative evidence of causation is required by the plaintiff
 It is not essential to have a positive medical opinion to support a finding of causation – It is not speculation, but the
application of common sense to draw such an inference where the circumstances, other than a positive medical opinion
permit
Notes  They look back at McGhee and they don’t see it as a departure from the ‘but for’ test (no shifting of the burden)

Clements v. Clements [2012] SCC

The Leading Case/Test on Causation in Canada
Facts The plaintiff was a passenger on her husband’s motorcycle. It was a wet day, the defendant was speeding, the motorcycle
was overloaded by approx. 100 pounds, and the defendant accelerated in order to pass a car. A nail that had punctured the
bike’s rear tire fell out, causing the rear tire to deflate suddenly during the passing maneuver. The husband lost control of the
vehicle and crashed. The plaintiff was thrown off, resulting in traumatic brain injury. She sued her husband, claiming that her
injuries were caused by his negligence. The defendant did not dispute his negligence in operating the motorcycle. However,
he (actually his insurance company) took the position that the plaintiff failed to prove that his negligence in fact caused the
injury. The insurance company presented expert evidence that the probable cause of the accident was the tire puncture and
deflation, such that a crash would have occurred even without his negligent acts. The trial judge found that the plaintiff was
unable to prove that she would not have been injured ‘but for’ the defendant’s breaches, due to the limitations of the
scientific expert evidence in the case. However, the trial judge instead applied a “material contribution” test and found the
 defendant liable on this basis. The Court of Appeal set aside the judgment because the ‘but for’ causation test had not been
proven and the material contribution test did not apply. The case was further appealed to the SCC.
Issue(s)  Did the defendant’s negligence cause the injuries?
 Who has the burden of proof to determine causation?
 Should the courts adopt the ‘but for’ test or the ‘material contribution’ test when determining liability in causation?
Decision New trial ordered because the trial judge’s errors of law were such that the Court could not be certain what the trial judge
would have decided had he applied the law correctly
Reasons McLachlin CJC
 The trial judge erred by:
o Requiring scientific proof as a necessary condition for finding ‘but for’ causation; and
o Applying the ‘material contribution to risk’ test
 The law of negligence does not require scientific proof of causation however, the ‘but for’ test should be applied in a
robust, pragmatic and common-sense fashion (what common sense are we relying on here?)
 As a general rule, the plaintiff must show that she would not have suffered the loss ‘but for’ the negligent acts of the
defendant
o Inherent in the phrase ‘but for’ is the requirements that the defendant’s negligence was necessary to bring
about the injury (necessary is very strict language)
 Proof that the defendant’s conduct ‘materially contributed’ to the risk of the plaintiff’s injury will only suffice in cases
where: (Cook v. Lewis)
o The plaintiff establishes that her loss would not have occurred ‘but for’ the negligence of two or more
defendants, each of whom is possibly in fact responsible for the loss; and
o The plaintiff, through no fault of her own, is unable to show that any one of the possible tortfeasors (negligent
defendants) was in fact the necessary or ‘but for’ cause of her injury because each defendant can point to
another as the possible ‘but for’ cause of the injury, defeating a finding of causation against any one of them on
a balance of probabilities
 In these exceptional cases, fairness demands that the defendants cannot be permitted to escape liability by pointing
fingers at one another
o “Material contribution” approach is a policy-driven rule of law that meets the underlying goals of the law of
negligence
o The present case did not meet this exception
Ratio  The law requires a plaintiff to prove on a balance of probabilities that the injury or loss would not have occurred ‘but
for’ the defendant’s negligent act
o This is a factual inquiry and the judge is to take a robust and pragmatic approach in determining whether a
plaintiff has proved, as a matter of fact, that the defendant’s negligence caused her loss (scientific causation is
not required)
 Only in exceptional circumstances can proof of factual causation be replaced by proof of a material contribution to the
risk that gave rise to the injury
o When multiple defendants are possible ‘but for’ causes of the plaintiff’s loss, they may not be able to defeat a
finding of causation simply by ‘pointing fingers at each other’, making it virtually impossible for the plaintiff
to prove which of the tortfeasors caused the damage
Notes  Hutch doesn’t like this decision at all
 The driver was clearly driving negligently
o Important to note that the nail was in his tire before driving (should he have known about this?)
 If he had not have been driving negligently, he would have had a better chance of avoiding the accident
 McLachlin’s bias leads to a new trial in this case, but she is clearly pro-defendant
 The ‘but for’ test is reaffirmed
o Hutch thinks that this is dumb and that the ‘but for’ test does not help (it doesn’t get us anywhere when we
don’t know what happened), even in Clements there were many factors that could have contributed to the
accident
o He thinks it would be better to look for a sufficient causal connection instead of THE cause (this is a losing
battle)
 McLachlin is saying possibilities are not enough, it’s about probabilities
o The ‘but for’ test says if you are unclear about what caused an accident, the defendant should not be held liable
(this is her default position) as opposed to Wilberforce in McGhee (default position is reversed)
 Cook v. Lewis [1951] SCC
Multiple Tortfeasors but Only One Cause
Facts All of the parties were hunting together. Lewis was hiding in a bush, and his brother tried to warn Cook and his companions
of this, but it was misunderstood. A few grouses flew out of the bush and Cook, and his companions fired shots. Lewis was
hit in the face and lost an eye. Cook and his companions gave statements claiming that they could not have shot Lewis. At
trial, it was found that none of the defendants were negligent (eventually, this was changed, and two defendants were found
negligent). They found that it was one of their shots that hit him, but they could not decide whose shot it was. The Court of
Appeal ordered a new trial, which Cook appealed.
Issue(s)  When there are two parties, and it is proven that one of their actions caused harm, but it cannot be proven which one it
was, who if anyone, is liable?
Decision Appeal dismissed – judgment in favor of the plaintiff
Reasons Cartwright J (majority)
 The decision in the lower court was based upon the general Canadian rule
o When it is certain that one of two individuals committed the offence, but it is uncertain which one was the
guilty agent, then neither of them can be convicted
 Decides to follow US precedent, from Summers v. Tice and Oliver v. Miles
o To allow both parties to escape liability is unfair because both of them were negligent
o The plaintiff is put in an unfair position in having to prove which of the parties did it, and will not recover
because of this unfair position
o Both parties must be held liable, as they were both negligent in firing their shots
Rand J (concurring but goes further)
 The burden is so unfair on Lewis that it must shift to the appellants to prove which one of them did it (if neither has
proof, then they are both equally liable)
o The onus is on each appellant to show that they are innocent/the other is guilty
 This is fairer because the appellants have a better idea of what really happened
 “No liability will, in any event attach to an innocent act of shooting, but the culpable actor, as against innocence, must
bear the burden of exculpation”
 Where it has been established that one or more persons acted negligently, and their negligent actions caused harms, the
onus shifts to the guilty person to exculpate himself and show that it was not his actions that resulted in the harm
Locke J (dissent)
 The relationship between the two appellants is not close enough to make them share liability for each other’s actions
 The simple fact that they were hunting together, and were going to split the kill at the end of the day does not mean that
they should be completely responsible for each other’s actions
 They were not engaged in a joint venture – rather they were engaged in individual ventures carried on in each other’s
company
Ratio  Joint tortfeasors can be held liable for harm, even when there is factual uncertainty as to whose actions caused the harm
 If two actors bear the taint of unproven (negligent) culpability, the onus shifts to the tortfeasors to exculpate themselves
or they will be found liable
Notes  The options in this case were to let them both off the hook or to hold them both liable (this is tricky because we know
for sure that one of them did NOT do it)
 The SCC says in this case, we are prepared to make a defendant liable even if we know that they did not injure the
plaintiff
o Big stretch by the Court (Hutch thinks this is positive – negligent parties carry the burden of ignorance instead
of the plaintiff)
 Hutch thinks: If you go out and engage in a tortious enterprise and things go wrong, people in that group should be
responsible for each other, even if they had not been negligent

Lambton v. Mellish [1843] UK

Facts Mellish and Cox were competing merry-go-round operators near Lambton’s property. They both used organs, although
Cox’s was much louder than Mellish’s. They were played constantly and created a nuisance for Lambton and his family. The
plaintiff sued both Cox and Mellish for an injunction restraining them from playing any organs.
Issue(s)  Is every person who contributes to a tortious act, even if their act alone is not tortious, liable for the entirety of the
tortious act?
  If the nuisance is the aggregate of two smaller nuisances that are not large enough on their own to give rise to a cause of
action, is there truly a nuisance?
Decision Judgment for the plaintiff – injunction granted
Reasons  The defendant argued that if one man makes a noise not of a kind, duration or degree sufficient to constitute a nuisance,
and another man, not acting in concert with the first, makes a similar noise at the same time, each is responsible only for
the noise made by himself, and not also for that made by the other
o The court rejected this
Chitty J
 In cases where the actionable offence is the aggregate of two or more smaller offences that known of each other’s
existence, then each is liable for the remedy against the aggregate complaint
 In this case, although the true nuisance is the combination of both organs, both of them must cease their playing when
the injunction is granted, even if one might not be loud enough to create an actionable offence
o Each man individually was making a noise and together these noises were contributing to a nuisance – both are
separately liable, even though the amount of nuisance caused by each wouldn’t necessarily create a nuisance
(together they do, and this is what matters)
 Each defendant must be restrained in respect of his own share of the offence
Ratio  If the actionable damage is the aggregate of two or more smaller damages (that may or may not have caused the damage
on their own), then all of the parties are liable for the remedy against the overall damage
Notes  In this case, only the guy with the smaller organ showed up (the other guy was not available)
o He was held liable for the whole thing and the Court said if you find the other guy, you can sue him for his part

Sindell v. Abbott Laboratories et al. [1980] SC of California

Facts Sindell’s mother was issued the drug DES during pregnancy in an attempt to limit the risk of miscarriage. The drug was very
successful in preventing miscarriages, but it later came to light that the drug was dangerous to the daughters of women who
took the drug (usually at about 20 years of age). However, it resulted in Sindell developing cancer and it was accepted by the
court that the drug was the cause of the cancer because DES had a signature (in most cases, we can’t identify the precise
cause). This happened to many women and their daughters throughout the United States at this time, as the drug was found to
be carcinogenic. Although the defendants knew or should have known that DES was a carcinogenic substance that could be
gravely dangerous to the unborn daughters of the mothers who took it, they violated the authorization of the FDA and failed
to warn of its potential danger (violated SOC) – instead they marketed it on an unlimited basis rather than an experimental
drug. Sindell could not identify the exact company that produced the drug that her mother was given because more than 200
companies produced the same drug. She sued (strategically) five of the biggest producers in a class-action suit.
Issue(s) If it is clear that a group of defendants were negligent, but not clear that any of them caused harm to the plaintiff, are they
liable and if so, to what extent?
Decision Judgement for the plaintiff
Reasons Mosk J
 Adopts a radically new reasoning
 There may be a substantial likelihood that none of the five defendants joined in the action made the DES which caused
the injury, and that the offending producer not named would escape liability altogether
o However, requiring the plaintiff to identify the specific manufacturer who supplied the DES would effectively
preclude any chance of recovery
 In cases like this, where the plaintiff cannot possibly prove which specific company caused the harm, it is not fair that
the defendants can get off merely because proof is impossible
o When there is an innocent plaintiff and negligent defendants, the latter should bear the cost of the injury
(Summers v. Tice) – particularly here where the companies have deep pockets and are better able to bear the
cost of the injury (broad policy standpoint)
 The defendants should be liable, and damages should be assessed based on the percentage of the total market of DES
that each individual defendant produces (i.e. ‘market share’ liability)
 Although the companies may not have harmed Sindell in particular, these damages are fair as they are approximate
measures that they have caused by their production of DES
o The defendants can turn around and sue other producers for their share
o If companies can prove on a balance of probabilities that they did not cause the harm to the particular plaintiff,
then they would be excluded from liability (burden of proof shifted to the defendants)
Richardson J (dissent)
 This is a large departure from the common law – rejects over 100 years of tort law
 o Such a big departure is not for the judiciary to decide but for the legislature
 The probability that any one of these five companies caused the injury is miniscule (quite possible in fact that none of
them did it)
 This sidesteps the essential element of tort law – connecting the plaintiff and the defendant and instead, “sprinkles the
rain of liability” over all who may be tortfeasors
o Under the majority reasoning, a defendant is fair game if it happens to be engaged in a similar business and
causation is possible (regardless of how remote)
 The deep pockets argument is against public policy, because it effectively creates a two-tiered system – one for the rich
and one for the rest
Ratio  When a particular class of defendants can be identified as being responsible for an injury, but the specific party that
caused the injury cannot be determined, then all of the defendants must share liability for the damages proportionally to
the probability that they caused the injury
Notes  DOC was obviously owed to the mother but was there a DOC owed to the daughters (20 years later)?
o If you give drugs to pregnant women, it is reasonably foreseeable that damages could result for their daughters
(this product was being manufactured specifically for pregnant women)
 The market share determined whether she won (she had to break 50%)
o Canadians say that causation is all or nothing

BC v. Imperial Tobacco Canada Ltd. [2005] SCC

Facts BC’s Tobacco Damages and Health Care Costs Recovery Act has a scheme that is structurally very similar to the market
share system developed by the Court in Sindell. The Act allows the government of BC to recover money from tobacco
manufacturers that they spent on treating tobacco-related diseases and where the injury was sustained as a result of tobacco
exposure. The defendant manufacturer must show that negligence was not the cause. The defendants, all of which were
tobacco companies who were sued by the government pursuant to the Act, attempted to challenge its constitutional validity.
Issue(s) Is the Act unconstitutional?
Decision Appeal dismissed – Act is constitutionally valid
Reasons Major J
 The Act is not unconstitutional by reason of extra-territoriality
o The cause of action that constitutes the pith and substance of the Act is properly described as located “in the
Province” under s. 92 of the Constitution Act
 The Act does not violate the independence of the judiciary
o The court must independently determine the applicability of the Act to the government’s claim, independently
assess the evidence led to support and defend that claim, independently assign that evidence weight, then
independently determine whether its assessment of the evidence supports a finding of liability
o Shifting the onus of proof in respect of some of the elements of an aggregate claim does not in any way
interfere with the essential condition of judicial independence
 The Act does not implicate the rule of law in the sense that the Constitution comprehends that term
o Nothing banning retrospectivity and retroactivity in the Constitution, except in respect of criminal law
o Nothing in the Constitution that requires legislation be general in character and devoid of special advantages
for the government (except where necessary for effective governance)
o Nothing in the Constitution that ensures a fair civil trial, only criminal
 Nevertheless, legislation that a defendant may regard as unjust does not render a trial unfair
 And even further, legislation that is unfair may still be deemed constitutional
Ratio
Notes  Tobacco is not like DES – it does not have a signature
 Legislation is introduced when causation is difficult, so onus should switch to the tobacco companies – Wilberforce
approach

Sunrise Co v. Lake Winnipeg [1991] SCC

Successive Accidents
Facts The Kalliopi L came close to colliding with the Lake Winnipeg (negligence) and ran aground as a result. The trial judge
found that the respondents were entirely responsible for this grounding. On its way to dry docks, the Kalliopi L ran aground
again, although this time, not as a result of the respondent’s negligence. If it had only suffered the initial damage, it would
 have taken 27 days to repair; if it had only suffered the second stint of damages then it would have only required 14 days to
repair. Actual repairs for damages from both accidents took a total of 27 days. At the lower courts, Lake Winnipeg was found
liable for all of the damages. They then appealed the decision.
Issue(s) How much of the damage should the Lake Winnipeg be liable for?
Decision Appeal dismissed – judgment in favor of the plaintiff
Reasons L’Heureux-Dube J (majority)
 Agrees with the trial court and the position of the plaintiff
 Because the first incident prevented the ship from profit-making for the entire time that it was in the dry docks, it is
irrelevant that the second incident occurred
o “If the first casualty directly prevented the vessel from continuing her profit-making venture and the length of
the period of repairs arising from the first casualty exceeded that of any repairs resulting from any other cause,
such as a second incident, then the detention and dry-docking expenses fall upon the party responsible for the
first accident, and the second accident is irrelevant”
 There is no causal link between the second incident and the loss of profit suffered by the plaintiff, such damage being
merely coincidental
o This should not be taken advantage of by the defendants to the detriment of the plaintiff
 You are liable for the direct consequences of your actions, and the direct consequence of the initial action was 27 days in
the dry docks
McLachlin J (dissent)
 The goal of the award of damages must be to restore the plaintiff to the position it would have been in but for the
tortious conduct of the defendant – no less and no more
o Thus, to the extent that an event occurring after the tort and independently of the tort diminishes the loss
caused by the tortious event, that diminution must be reflected in the award for damages
 However, it can be argued that applying strict logic, adoption of this approach might result in the defendant’s recovering
nothing in the case where its ship is damaged by two consecutive tortfeasors and the time required to effect both sets of
repairs was the same
o To avoid such a result, it is necessary to introduce a factor other than pure causation
 What is required is a rule that says:
 (a) that one of the two causes of the concurrent loss is responsible (i.e. the “first in time”
rule) OR
 (b) that the concurrent delay should be apportioned between the two causes of the
concurrent law
o This is compatible with the contributory negligence approach to damages now
prevalent in virtually all areas of tort law
 The respondents are only truly completely liable for 13 days in the dry docks, and that they should share the liability for
the other 14 days with the party who caused the second accident
o Therefore, in sharing the days evenly, the respondents should only be liable for 20 days in the dry docks
Ratio  Majority: Parties are totally liable for the direct consequences of their actions
o Dissent: However, maybe damages should be shared in instances of damages from multiple causes, similar to
contributory negligence
Notes Hutch
 If they had both been negligent accidents by someone else other than the Kalliopi, the outcome would have been that
they would have split the damages (13 and 14 days)
 Surprisingly likes McLachlin in this case
o She is looking forward and thinking what happens if the facts are switched and the first accident is not
negligent and the second one is (the majority would have to say: you did not add to their problems because
they would still have to be in dry dock for 27 days, so the plaintiff would get nothing)
 When there are successive (totally unrelated) accidents, then the court will go with the majority in Sunrise or the
minority (Hutch thinks the dissent is persuasive here)

Gregg v. Scott [2005] UK

Facts The defendant negligently diagnosed as innocuous a lump under the left arm of the plaintiff when in fact, it was cancerous
(non-Hodgkin’s lymphoma). This led to a nine-month delay in the plaintiff receiving treatment. During this period, his
condition deteriorated, and the disease spread elsewhere. The deterioration in the plaintiff’s condition reduced his prospects
of disease-free survival for 10 years from 42%, when first consulted the defendant, to 25% at the date of the trial.
Issue(s) Can the plaintiff recover damages for the loss of chance of a favorable outcome?
Decision Judgment in favor of the defendant
Reasons Baroness Hale of Richmond
 Introducing loss of opportunity terms into definitions of personal injury would cause far more problems in the general
run of personal injury claims than the policy benefits are worth.
o If both alternatives are available in every case, the defendant will almost always be liable for something.
o If the claim is characterized as loss of a chance, those with a better than even chance would still only get a
proportion of the full value of their claim.
 The complexities of attempting to introduce liability for the loss of a chance of a more favorable outcome in personal
injury claims have driven me, not without regret, to conclude that it should not be done.
Lord Nicholls of Birkenhead (dissent)
 If treated promptly, the plaintiff’s initial treatment would probably have achieved remission without an immediate need
for high dose chemotherapy.
o However, it was not possible to conclude on the balance of probability that, in the absence of the negligence,
the plaintiff’s medical condition would have been better or that he would have avoided any particular
treatment.
 The appropriate characterization of a patient’s loss in this type of case must surely be that it comprises the loss of the
chance of a favorable outcome, rather than the loss of the outcome itself.
o This analysis of a patient’s loss accords with the purpose of the legal duty of which the doctor was in breach,
which is to promote the patient’s prospects of recovery by exercising due skill and care in diagnosing and
treating the patient’s condition.
 A doctor’s duty to act in the best interests of his patient involves maximizing the patient’s recovery prospects and doing
so whether the patient’s prospects are good or not so good. A patient should have an appropriate remedy when he loses
the very thing it was the doctor’s duty to protect.
o Tort law should recognize that where a patient is suffering from illness or injury and his prospects of recovery
are attended with a significant degree of medical uncertainty, and he suffers a significant diminution of his
prospects of recovery by reason of medical negligence whether of diagnosis or treatment, that diminution
constitutes actionable damage.
Ratio  Loss of chance is not a recoverable category of damages in medical negligence claims
Notes  The problem in this case is that the plaintiff did not die
o How are you harmed if you are still alive?
 The plaintiff says but I could die any time and my odds of survival were decreased
 It’s awkward for the court to say come back when you’re dead
 The other problem is that the plaintiff still may not have survived, even if they had properly diagnosed and administered
treatment
o In fact, his chances of survival started at 42% - below 50% so they go in favor of the defendant
 The dissenter thinks this is insane – why would you award damages to someone who started over
50% and not someone who was at 42%
 Hutch says: we want to deter negligence
 Lapierre (SCC in 1985) – no recovery for chance

Defences
 To get to this stage, we have already decided that the defendant owed a DOC, they breached
the SOC, the damages were not too remote and there was causation
 Normally we would say that if the plaintiff can get over those hurdles, they are entitled to
damages
 Now, the defendant gets a chance to show that there was something about the plaintiff’s
behavior that would either deny them or reduce their compensation
 Used to be the case that if the plaintiff themselves were negligent, this would deprive them of
their claim (Butterfield v. Forester)
 Logic behind contributory negligence is:
o We need to provide incentives to take care in the same way that we need to provide
incentives to defendants
 o You have to internalize the losses that have been brought about by your negligence
 Contributory negligence is not about causation it is about the damages
 Hutch thinks contributory negligence is extremely problematic – it seems like it is fair, but it
is actually quite awkward when you think about it
o It hits the plaintiff with a double-whammy
 Why are we relieving the defendant of what otherwise would have been 100%
liability?
o They already are getting injured – why do you need to punish them more?
 Presumably the injury is enough of a deterrence
 The idea of deterrence is also weird because in order for it to be effective,
people need to know that these laws exist and that this is the way the Courts
are dealing with these issues
o Further, why should the insurer get the benefit of the plaintiff’s negligence?
 In Andrews: Who is better suited to internalize this loss – a quadriplegic or a
commercial organization/insurance company?
 The other two defences are complete defenses (all or nothing)
o So, the Courts have been increasingly reluctant to use this
o They typically use contributory negligence because it is an easier way out (they don’t
have to make all or nothing decisions and they can apportion liability)

Contributory Negligence
Butterfield v. Forester [1809] UK

Facts The plaintiff was riding his horse negligently down the road at night when he hit a pole that the defendant had placed across
the road negligently while making repairs to his house. The plaintiff was thrown from his horse. Witnesses said that if the
plaintiff was not riding fast, he would have seen the obstruction. The judge charged the jury on whether a person riding with
reasonable and ordinary care could have seen and avoided the obstruction and if they were satisfied that the plaintiff was
riding along the street extremely hard, and without care, that they should find the verdict for the defendant.
Issue(s)  Is the defendant at fault if a reasonable driver would have seen the obstacle and avoided it?
 Should the defendant be held liable although the plaintiff contributed to his own injury?
Decision Judgment in favor of defendant
Reasons Bayley J
 Accident happened entirely due to the plaintiff’s own fault
 If he was using ordinary care this would not have occurred
Lord Ellenborough CJ
 Two things must occur to support this action:
o An obstruction on the road by fault of the defendant AND
o No want of ordinary care to avoid it on the part of the plaintiff
Ratio  A defendant cannot be held liable for damages resulting partially from the negligence of the plaintiff
Notes  This case is relevant only for historical context
 It demonstrates when this was a complete defence (i.e. any form of contributory negligence on the part of the plaintiff
rids the defendant of liability and thus, stops the plaintiff from recovering)
 Hutch
o Case is ridiculous – there are two negligent people so why wouldn’t you split the damages 50/50

Negligence Act, RSO 1990 c N.1

3. In any action for damages that is founded upon the fault or negligence of the defendant if fault or negligence is found
on the part of the plaintiff that contributed to the damages the court shall apportion the damages in proportion to the
 degree of fault or negligence found against the parties respectively. 

4. If it is not practicable to determine the respective degree of fault or negligence as between any parties to an action
such parties shall be deemed to be equally at fault or negligent. … 

6. In any action tried with a jury the degree of fault or negligence of the respective parties is a question of fact for the
jury. 

7. Where the damages are occasioned by the fault or negligence of more than one party the court has power to direct
that the plaintiff shall bear some portion of the costs if the circumstances render this just.

Hutch
 This is an enactment of legislation allowing for apportionment of damages in cases of contributory negligence
 No complete defence of contributory negligence

Froom v. Butcher [1975] UK

Facts The plaintiff was driving. The defendant was trying to overtake another vehicle by driving on the wrong side of the road and
ended up hitting the plaintiff’s car head on. The defendant was convicted of careless driving. The plaintiff was not wearing a
seatbelt (though it was not legally required at the time to do so). The plaintiff would have been injured with or without the
use of the seatbelt, but the extent of the injuries would have been diminished with seatbelt usage. The defendant was
negligent and was the sole cause of the accident (nothing the plaintiff did brought about the accident). The head on collision
was solely attributable to the defendant. The problem was, the plaintiff did not use the safety devices that were available to
him. The plaintiff’s actions (or omissions) did not affect the accident’s occurrence but did affect the damage that was caused.
Issue(s)  Should damages be reduced because you contributed to the extent of your own injury?
 Does failing to wear a seatbelt amount to contributory negligence?
Decision Appeal allowed – plaintiff is contributorily negligent – damages reduced by 10%
Reasons Lord Denning
 Although it was not the law at the time to wear a seatbelt, the reasonable person would wear one and so, the plaintiff is
negligent
o By not wearing a seatbelt, you are taking an added risk
 Others have suggested that it is not up to the Courts to invade the freedom of choice of motorists by holding it to be
negligence, to act upon an opinion firmly and honestly held and shared by many sensible people (a lot of people,
including the plaintiff in this case, thought it was actually more dangerous to wear a seatbelt)
o This is not true
o “I am afraid I do not agree. In determining responsibility, the law eliminates the personal equation. It takes no
notice of the views of the particular individual; or of others like him. It requires everyone to exercise all such
precautions as a man of ordinary prudence would observe. See Vaughan v. Menlove”
 When you are talking about the plaintiff, the same reasonable standard should apply as it does to the
defendant
 The question that we must ask here is what the cause of the damage was, not the cause of the accident
o The cause of the damage was partly the negligent driving on the part of the defendant but also in part by the
failure of the plaintiff to wear a seatbelt
o Thus, the plaintiff must bear some share in responsibility for the damage
 Some judges have suggested that seatbelts only need to be worn when there are circumstances that carry a high risk (i.e.
bad weather conditions)
o This is not true – you never know when a risk may arise, and you may not have time to fasten your seatbelt
when it does
 It would be too easy to forget the circumstances when you would be required to wear one and when
you would not be – it is much easier to just make it regular and automatic
o Every time you go out in a car on the road, there is a risk of accident
 The prudent man will guard himself against this risk
 It is not enough to say you forgot to wear one – seatbelts are very important, and we should encourage people to wear
them
 The only time someone can be excused from wearing a seatbelt is when a person is pregnant, or fat and they know that
 wearing one might cause more damage in an accident
 In order to work out damages in these cases, we can assess each case, or we can work out a presumption
o There should be a general rule that if you are not wearing a seatbelt, your damages should be reduced by 25%
o However, the 25% can be reduced to 10% in other circumstances (if the damages would have been non-
existent vs. if they simply could have been reduced)
 The negligent driver should bear most of the losses but there should be a standard percentage reduced
from damages if injuries occurred that would have been avoided or limited if a seatbelt was worn
Ratio  Not wearing a seatbelt amounts to contributory negligence even if you are not required by the law to wear them
 The relevant question is not whether the plaintiff’s actions caused the accident, but whether they helped to cause the
damages
Notes  We are not interested in causation here – because it is pretty clear in this case who did that (the negligent defendant)
o We are only concerned with the damages here
 Hutch doesn’t see why damages should be reduced in these circumstances
o Why not keep the damages at 100% and then if there is some law-breaking behavior on the part of the plaintiff,
then prosecute separately (awkward in this case because not wearing a seatbelt was not illegal at the time)

Volenti non fit injuria

Lambert v. Lastoplex Chemicals [1972] SCC

Facts Lambert, a mechanical engineer, used Lastoplex’s product (lacquer sealer) in his basement when installing new floors. There
were warnings on the can stating a risk of flammability, and that the product should be kept away from open flames. As they
were in a different room from the new flooring, the plaintiff did not turn off his furnace, or his hot water heater, both of
which had natural gas pilot lights. The vapor of the sealer caused an explosion that burned the plaintiff and damaged the
house. The warning labels on a competitor’s product were more direct and stated to turn off all pilot lights before using. The
trial judge found for the plaintiff, but this was overturned at appeal. Lambert then appealed to the SCC.
Issue(s)  Is the manufacturer liable for injuries resulting from the regular use of its product, even though there were warnings
posted on the canister?
 Does the plaintiff’s engineering background mean that he understood the dangers more thoroughly and therefore,
voluntarily assumed the risk?
Decision Appeal allowed – judgment in favor of the plaintiff – volenti non fit injuria does not apply
Reasons Laskin J
 If a product only gets sold to professionals, then it is sufficient to tailor the warning label on the product to a
professional, because we assume that they have a higher understanding of the risks associated with the use of that
product
 BUT manufacturers of dangerous products for use by the general public have a special duty to expressly specify the
dangers
o Where manufactured products are put on the market for ultimate purchase and use by the general public and
carry danger (in this case, by reason of high inflammability), although put to the use for which they are
intended, the manufacturer, knowing of their hazardous nature, had a duty to specify the attendant dangers,
which it must be taken to appreciate in a detail not known to the ordinary consumer or user
o A general warning is not sufficient to eliminate liability when the likelihood of danger may increase according
to surroundings in which it may be reasonably expected that the product will be used
o The degree of explicitness required will vary with the danger likely to be encountered in the ordinary use of the
product
 In regard to the fact that the plaintiff was a professional engineer:
o Volenti non fit injuria (“to a willing person, injury is not done”) can only apply where it can be proven that the
plaintiff appreciated the risk and willingly took it, which is not the case here (there needs to be a voluntary
assumption of the risk)
o There is no proof that the plaintiff appreciated the risk involved in leaving the pilot light on and willingly took
it
o In this case, there was no conscious choice to leave the pilot lights on – it did not enter the plaintiff’s mind that
there was a probable risk of fire and so, the risk was not voluntarily assumed
Ratio  Manufacturers of dangerous products for use by the general public have a special duty to expressly specify the
associated risks/dangers
 In order for volenti non fit injuria to apply, the plaintiff must appreciate the risk associated with their actions and
 willingly take it, despite that risk
o Simply having a professional background in a related field will not lead to a finding that one automatically
appreciated the risk
Notes  Explicit – signing waivers
o Hutch says most of these are unreasonable (they attempt to relieve a potential defendant of liability for
anything and everything)
o Also, a lot of them wouldn’t hold up in court
o The courts say that if someone is relying on a waiver, the person signing would have to at least know what
they were waiving
 Implicit
o Sports (by playing you become volenti to reasonably foreseeable risks that are essential to that game)
 Does not mean you consent to everything that happens on the ice ex. Bertuzzi case

Dube v. Labar [1986] SCC

Facts Dube, a passenger in a car driven by Labar, was injured when it turned over. Both parties had been drinking the night before
and on the day of the accident, and it appeared that Dube had also been drinking in the car, as a passenger. Dube took over as
driver when Labar was unable to start the car after stopping to pick up two hitchhikers. Shortly after, they switched back,
once Labar asserted that he was capable of driving. Shortly thereafter, the car veered as Labar turned to speak to one of the
hitchhikers in the back seat. Dube attempted to grab the wheel and straighten out the car’s course but his attempts eventually
resulted in the car’s overturning. Dube was unsuccessful at trial as the jury found that volenti non fit injuria applied, and was
unsuccessful on appeal as well. He further appealed to the SCC.
Issue(s) Does the volenti non fit injuria defence apply?
Decision Appeal dismissed – judgment in favor of the defendant – volenti non fit injuria applies
Reasons Estey J
 Voluntary assumption of risk will arise only where the circumstances are such that it is clear that the plaintiff, knowing
of the virtually certain risk of harm, in essence bargained away his right to sue for injuries incurred as a result of any
negligence on the defendant’s part
o The acceptance of risk may be express or may arise by necessary implication from the conduct of the parties,
but it will arise, in cases such as the present, only where there can truly be said to be an understanding on the
part of both parties that the defendant assumed no responsibility to take due care for the safety of the plaintiff,
and that the plaintiff did not expect him to
Ratio  Voluntary assumption of risk only applies when it is shown that:
o The plaintiff knows of the risk
o The plaintiff has assumed the risks voluntarily
o The plaintiff, in essence, has bargained away their legal right to sue for injuries caused by the defendant’s
negligence
 In order for volenti non fit injuria to apply, there must be an agreement between the two parties, either express or
implied, that the plaintiff waives the liability owed to him by the defendant
 The burden lies on the defendant to prove volenti non fit injuria
Notes  Volenti is a bilateral “exchange of terms” governing the activity in which the parties were engaged
o It is an express or implied bargain between the parties whereby he plaintiff gives up their right of action for
negligence

Priestly v. Gilbert [1973] Ontario Court of Appeal

Facts Priestly and Gilbert had a long day of drinking together. They were both severely intoxicated and Gilbert was driving. There
was a serious car accident caused by the defendant’s negligence killing two people in the other car and seriously injuring
Priestly. The plaintiff’s action was dismissed at trial on a volenti non fit injuria defence. He subsequently appealed.
Issue(s) Does volenti non fit injuria apply when the plaintiff is drunk?
Decision Appeal dismissed – judgment in favor of the defendant – volenti non fit injuria applies
Reasons Schroeder JA
 The learned trial judge found that the plaintiff and the defendant had set out upon a joint venture which the plaintiff
knew or should have known would endanger life and limb, and that he voluntarily accepted the risk of personal injury
 involved
 The plaintiff voluntarily assumed the risk associated with being in the car with the respondent by drinking together with
him all day and having no reservations about driving with him
 It is identical in law to a situation where he was sober, realized how drunk the defendant was, but still knowingly got in
the car as a passenger
o This assent is not negated simply because he was intoxicated
Ratio  Drinking together with someone until you are both intoxicated and then voluntarily being a passenger while they drive,
implies that you have voluntarily assumed all of the risks associated with the drive
 The fact that you are intoxicated and cannot properly understand the severity of the decision does not make volenti non
fit injuria inapplicable
Notes  Volenti occurs when the parties set out upon a joint venture, which the plaintiff knew or should have known would
endanger life and limb, and that he voluntarily accepted the risk of personal injury involved
o Plaintiff must have accepted not only the physical risk involved, but also the legal risk of injury and damage
 Courts make it clear that they assume that an agreement would be made in this circumstance to waive liability
o Hutch thinks this is crazy and that it would be the opposite – and that they would definitely agree that they
could sue each other
o Leads to the perverse result that the drunk driver can recover from their insurance, but the passenger would not
be able to access that same insurance
 Also, why does the “bargain” even exist as an argument if they were drunk when they entered into this “bargain”?
 Hutch thinks a better approach would be contributory negligence whereby they would split liability 50/50

Illegality
Hall v. Hebert [1993] SCC

Facts The plaintiff and the defendant were very drunk at a party. They then got into the defendant’s ‘souped-up’ muscle car. While
driving home, the defendant stalled his car on a steep unlit gravel road, with a steep embankment on one side. The defendant
said that the car could only be started by a “rolling start” (the keys had fallen out of the ignition and he could not find them).
The plaintiff asked to drive while they attempted the rolling start, and the defendant let him. The plaintiff lost control almost
immediately and flipped the vehicle down the embarkment. They managed to walk away at first, but it was later discovered
that the plaintiff had significant head injuries. He then sued the defendant for allowing him to drive in his intoxicated
condition. At trial, the defendant raised the defence of ex turpi causa non oritur actio (from a dishonorable cause, an action
does not arise) alleging that both parties were engaged in a criminal enterprise and as a result, that he could not be held
liable.
Issue(s) Can the defendant raise the defence of ex turpi causa non oritur actio to negate the plaintiff’s cause of action?
Decision Appeal allowed – judgment in favor of the plaintiff
Reasons Cory J (concurring)
 The defence of ex turpi causa non oritur actio should be eliminated
 In its place, courts should be granted the power to disallow a plaintiff’s claim, on account of the plaintiff’s wrongful
conduct, by finding that no DOC arises
 This power is to be exercised under the second branch of the Anns/Kamloops Test
o The two-stage test for foreseeability, proximity and DOC
o 1) Is there a sufficiently close relationship between the parties so that, in the reasonable contemplation of a
party, carelessness on its part might cause damage to another person
o 2) If so, are there any considerations which should negate or limit (a) the scope of the duty, (b) the class of
persons to whom it is owed or (c) the damages to which a breach of it may give rise
 On this view, the plaintiff’s illegal or immoral conduct may constitute a policy reason for holding that the defendant
owed the plaintiff no DOC
 In this case, there is no reason why the appellant should be prevented from recovering compensation on the grounds of
public policy
McLachlin J (majority)
 Initial Thoughts:
o Courts should be allowed to bar recovery in tort on the ground of the plaintiff’s immoral or illegal conduct
only in very limited circumstances
o This concern is an issue where a damage award in a civil suit would, in effect, allow a person to profit from
illegal or wrongful conduct, or would permit to an evasion or rebate of a penalty prescribed by the criminal law
  The idea common to these instances is that the law refuses to give by its right hand what it takes
away by its left
o As a general rule, the ex turpi causa principle will not operate in tort to deny damages for personal injury,
since tort suits will generally be based on a claim for compensation
 The power expressed in the maxim ex turpi causa non oritur actio finds its roots in the insistence of the courts that the
judicial process should not be used for abusive, illegal purposes
o i.e. a man who murders his wealthy aunt should not be allowed to receive the proceeds of her life insurance as
a beneficiary
 Its use is justified where allowing the plaintiff’s claim would introduce inconsistency into the fabric of the law, either by
permitting the plaintiff to profit from an illegal or wrongful act, or to evade a penalty prescribed by criminal law
o In the present case, the plaintiff was not seeking to profit from his illegal conduct, nor was he circumventing
the criminal law - the plaintiff’s damages should be reduced on the grounds of his contributory negligence, but
not altogether barred from recovery
 Not in favor of Cory J’s approach because:
o Shifting the analysis to the issue of DOC provides no new insight into the fundamental question of whether
courts should be entitled to deny recovery in tort to a plaintiff on the ground of the plaintiff’s immoral or
illegal conduct
o It makes more sense to view ex turpi causa as a defence, as the plaintiff should not be required to disprove the
existence and relevance of his or her illegal or immoral conduct, rather it should be for the defendant to
establish it (more appropriate for the onus to be on the defendant to show illegality)
o The DOC approach is an all or nothing approach, and cannot be applied selectively to discreet heads of
damage
o Raises procedural problems: a plaintiff may sue in both tort and contract, and making this a DOC issue in tort
and keeping it as a defence in contract, would be a source of confusion
Ratio  Illegal conduct can bar recovery in tort only in limited circumstances
o The defence of ex turpi causa non oritur actio only applies when the integrity of the legal system is threated by
the claim (such as in situations where the plaintiff is attempting to profit from his illegal conduct) OR
o When a tort claim is used to circumvent, subvert, or negate a criminal penalty
 The doctrine of ex turpi causa should not be replaced by a DOC analysis, because:
o It would inappropriately place an onus on the plaintiff to show the absence of illegal or immoral conduct
o DOC is an all or nothing approach and cannot be selectively applied to heads of damage
o The consideration of illegal or immoral conduct in DOC would raise procedural problems where there are
concurrent claims in tort and contract
Notes  We know that Cory is not right because of Rankin – in itself, illegality is not an automatic no to DOC
o Hutch – even though Karakatsanis says this, it was relevant in her judgment
 Why should the defendant benefit from no liability?
o If you want to punish them in the criminal law, great but no sense in giving them a double-whammy in denying
them a tort claim
o Maybe we should allow them to recover for healthcare costs but not for future loss of income, etc?

Negligent Statements
 Statements will usually, but not always, lead to purely economic damages rather than physical damages
 What is the special problem with statements?
o “Liability in an indeterminate amount for an indeterminate time to an indeterminate class” – Cardozo J in
Ultramares v. Touche
o People can pass on information to people who are not constrained by the neighborhood
o Hutch thinks this is nonsense – why can’t we control it using the same mechanisms in the Cooper v. Hobart
test
 The Courts get very hung up about certain people in different “chattering” professions
o Bad basis for establishing special rules – preferential treatment
 When someone asks for legal advice that you don’t know much about…
o You can shut up
o You can tell them that you don’t know much about the area, and you can try but you should really go see a
lawyer who knows more
 o You can tell them with a disclaimer
 If a lawyer doesn’t give a disclaimer and gives bad advice, they should be liable
o The cases don’t say this
o Judges may look after their own
o Shouldn’t we be holding these professionals to a higher level of care?
 The more likely that there is a large class of plaintiffs, the more likely judges will be afraid to grant a DOC
o Statements are volatile – once you put them out there, it keeps going
o You don’t only have to be a neighbor, but you have to be a special neighbor in these circumstances
o They use particular devices within our general understanding:
 Relationship has to be a special neighbor
 In a professional business setting NOT social setting
 Cognos court extended a little bit (they don’t have to be in the business of making
statements)
 Plaintiff has to suffer REASONABLE detrimental reliance
 Courts have waived reliance in certain circumstances – it is possible to rely on something
that you’re not aware of
 Defendant has to be negligent
 Most people don’t know about the law
o Does the law change anything then?

Candler v. Crane Christmas & Co [1951] UK

Accountant
Facts A company was looking for capital, so they put out an advertisement asking for investors. Candler responded to the
advertisement saying that he was interested in investing 2000 pounds, provided he was shown the company’s accounts. The
company instructed Crane Christmas, a firm of auditors/accountants, to prepare the company’s accounts and balance sheet
for Candler. The accounts were then shown by the accountants directly to Candler. Candler relied on their accuracy and
subscribed for 2000 pounds worth of shares in the company, but the company was actually in a very poor state. They went
bankrupt and Candler lost all of the money that he invested. He then brought an action against the accountants for negligently
misrepresenting the state of the company. The company had a contract with the accountants, but Candler did not. The
accountants argued that they did not owe a DOC to the investor, only the contracting party.
Issue(s) Is this different than Donoghue v. Stevenson, where a DOC can extend to parties outside a contractual relationship?
Decision No liability – no DOC owed
Reasons Lord Denning (dissent)
 Why is this different than ginger beer manufacturers?
o Donoghue v. Stevenson applies
 The defendant clearly owed a duty to the plaintiff – they were professional accountants who prepared the accounts and
put them before the plaintiff, knowing full well he was going to be guided by them in making an investment in the
company
o The DOC is not a purely contractual duty as per Donoghue v. Stevenson – you just need to show that the
plaintiff was in the neighborhood, and in these cases, these include people who can be anticipated to rely on
the service provided
o A DOC does not only arise where the result of a failure to take care is physical damage to persons or property
– if the duty exists, I cannot think that the liability depends on the nature of the damage
 Just because we have never recognized this kind of claim before does not mean we can’t recognize it now – “the
categories of negligence are never closed”
o If you read the great cases, you will find that in each of them the judges were divided in opinion. On the one
side there were the timorous souls who were fearful of allowing a new cause of action. On the other side there
were the bold spirits who were ready to allow it if justice so required. It was fortunate for the common law that
the progressive view prevailed.
 We should impose a new duty here – Donoghue should be extended to negligent statements leading to economic loss,
i.e. if people are in the business of making statements that they know others will rely upon to make investments, they
should be liable for negligent statements leading to economic loss
o What persons would be under such duty?
 Persons such as accountants and analysts, whose profession and occupation it is to examine books
and accounts, and to make reports on which other people – other than their clients – rely in the
ordinary course of business
  They have a duty to use care in their reports and in their work, which results in their reports
o To whom would these professional people owe this duty?
 To their employer or client
 BUT ALSO, to any third person to whom they themselves show the accounts, or to whom they know
their employer is going to show the accounts, so as to induce him to invest money or take some other
action on them
 Will not apply to strangers that they are unaware of
 In the present case, the accountants here were specifically asked to provide the account to a
specific investor – they clearly knew the identity of the investor and the purpose for which
the accounts were required
 Candler was not a stranger – he was in the neighborhood
o To what transactions does the duty of care extend?
 It extends only to those transactions for which the accountants knew their accounts were required
 It would be going too far to make an accountant liable to any person in the land who chooses to rely
on the accounts in matters of business, for that would expose him to, in the words of Cardozo CJ in
Ultramares Corp v. Touche “…liability in an indeterminate amount for an indeterminate time to an
indeterminate class”.
Lord Asquith (majority)
 Donoghue v. Stevenson has never applied to injury other than physical, and should not be extended to economic loss
o Different rules apply to negligent misstatement – Donoghue v. Stevenson does not abolish these differences
 If the principle laid down in Donoghue v. Stevenson were applied to negligent misrepresentation in every case, in which
the representee were proximate to the representor, it would have difficult consequences
o For example, if a ship that crashes into rocks carelessly omitted by a marine cartographer could sue the
cartographer, people would think twice before making maps
 We have to follow the law – of course there is liability if the accountants were involved in fraud, but there is no liability
in terms of carelessness
o A merely negligent misrepresentation made by a director to potential subscribers for shares, on which some of
them act to their detriment, affords the latter no remedy
 If this relegates me to the company of ‘timorous souls’, I must face that consequence with such fortitude as I can
command.
Ratio  Though the accounts of the company in which the plaintiff had invested had been carelessly prepared and gave a wholly
misleading picture of the state of the company, the plaintiff could not recover damages.
 A false statement, carelessly, as contrasted with fraudulently, made by one person to another though acted on by that
other to his economic detriment, is not actionable in the absence of any contractual or fiduciary relationship between the
parties.
o This principle had not been qualified by Donoghue v. Stevenson.
Notes  Denning is very close in approach to Atkin in Donoghue v. Stevenson
o Two major differences
 Physical v. purely economic damages
 Statements v. acts
 Are statements so different that they require a wholly different legal regime from Donoghue
v. Stevenson?
 If you’re in the business of providing a service of statements rather than a service of ginger
beer, why should you be treated differently?
 Was the accountant negligent?
o Did they live up to the SOC of a reasonably prudent accountant?
 Denning’s judgment has had longer lasting implications but in 1951 they said “Donoghue v. Stevenson stops at the
doorway of accountants”
 Company tells their accountants to give the accounts to Candler – they know exactly who it is that they are giving the
representation to

Hedley Byrne & Co Ltd v. Heller [1964] UK

Bank
Facts Hedley Byrne were a firm of advertising agents. A customer, Easipower Ltd, put in a large order for media contracts. Hedley
Byrne wanted to check their financial position, and creditworthiness. They asked their bank, National Provincial Bank, to get
a report from Easipower’s bank, Heller & Partners Ltd, who replied in a letter that was headed “without responsibility on the
part of this bank” (disclaimer). The letter said that Easipower was “considered good for its ordinary business engagements”.
Relying on this, Hedley Byrne accepted the contracts with Easipower. Subsequently, Easipower went into liquidation, and
Hedley Byrne lost 17,000 pounds on contracts. Hedley Byrne sued Heller for negligence, claiming that the information was
negligently given to National Provincial Bank and was misleading. Heller argued there was no DOC owed regarding the
statements, and, in any case, liability was excluded by the disclaimer.
Issue(s) Did Heller owe a DOC to the third-party, Hedley Byrne, and could this duty be owed despite the existence of the disclaimer?
Decision No liability – Reid, Devlin, Pearce thought there was a DOC owed but it was negated because of the disclaimer – Hodgson
and Morris in dissent said there was no DOC owed but there might be one in certain circumstances
Reasons Lord Reid
 When pure financial loss results from negligent words, a DOC will only exist for a limited number of people – we can’t
have everyone who listened to or read the words recovering damages
o There is a big difference between negligent acts and negligent statements
o A negligently-made article will only cause one accident and so it is not very difficult to find the necessary
degree of proximity or neighborhood between the negligent manufacturer and the person injured. But words
can be broadcast with or without the consent or the foresight of the speaker or writer. We should not say that
the speaker owes a duty to every ultimate “consumer” who acts on those words to his detriment
 It seems to me that there is good sense behind our present law that in general an innocent but negligent
misrepresentation gives no cause of action – there must be something more than the mere misstatement
 A DOC will arise when there is a type of special relationship within a professional context
o Any relationship where “it is plain that the party seeking information or advice was trusting the other to
exercise such a degree of care as the circumstances required, where it was reasonable for him to do that, and
where the other gave the information or advice when he knew or ought to have known that the inquirer was
relying on him”.
o Donoghue v. Stevenson cannot apply to conversations in social/informal contexts, even if it is clear that the
others are likely to be influenced by their statements
 A reasonable man, knowing that he was being trusted or that his skill and judgment were being relied on, would, I think,
have three courses open to him
o He could keep silent or decline to give the information or advice sought
o He could give an answer with a clear qualification that he accepted no responsibility for it or that it was given
without that reflection or enquiry which a careful answer would require
o He could simply answer without any such qualification
 If he chooses to adopt this last course, he must be held to have accepted some responsibility for his
answer being given carefully, or to have accepted a relationship with the enquirer which requires him
to exercise such care as the circumstances require
 Candler v. Crane Christmas was decided wrong
Lord Pearce
 If persons holding themselves out in a calling or situation or profession take on a task within that calling or situation or
profession, they have a duty of skill and care
o In terms of proximity, one might say that they are in particularly close proximity to those who, as they know,
are relying on their skill and care although the proximity is not contractual
 A DOC is created by special relationships that give rise to the assumption that care is demanded
o The special relationship does not have to be fiduciary, but it has to be a relationship that gives rise to an
assumption that care as well as honesty is required
o There is a special relationship between Hedley Byrne and Heller
 The form of the inquiry and the answer is very important – both here were plainly stated to be without liability, and so it
is not possible to assume liability
Lord Devlin
 I shall therefore content myself with the proposition that wherever there is a relationship equivalent to contract there is a
duty of care. Such a relationship may be either general or particular. Examples of a general relationship are those of
solicitor and client and of banker and customer.
o Special relationships involving duty are not limited to contractual relationships or fiduciary duties but include
relationships which are “equivalent to contract”.
o Hutch: Once we start tying torts back into contract, we have problems – in Donoghue, the court severed the
relationship, but Devlin is trying to re-establish the connection
  He is trying to convey that you need a really close relationship, but he ends up imposing tort law
duties in places where there are secondary contracts – post-Donoghue, we owe duties beyond
contracting parties entirely
 A man cannot be said voluntarily to be undertaking a responsibility if at the very moment when he is said to be
accepting it he declares that in fact he is not
Lord Hodgson and Lord Morris (minority)
 No DOC owed in this case but there are certain circumstances where one might arise
 The zone of liability is reduced for negligent statements – smaller neighborhood than for negligent acts
Ratio  There is a potential in tort law to allow third-party recovery for the economic loss occasioned by a professional advisor’s
negligent misstatements
 A DOC will arise when there is a type of special relationship within a professional context
o Any relationship where “it is plain that the party seeking information or advice was trusting the other to
exercise such a degree of care as the circumstances required, where it was reasonable for him to do that, and
where the other gave the information or advice when he knew or reasonably ought to have known that the
inquirer was relying on him”.
Notes  The House of Lords was not bound by the decision in Candler v. Crane Christmas because that decision was made at the
Court of Appeal
o Although there was no liability found, they basically upheld Denning’s dissent from Candler v. Crane
Christmas
 They refused to found liability on the “neighborhood” principle of Donoghue, preferring instead to emphasize that the
duty would only arise where there was a “special relationship” between the parties
 It is not enough that advice was wrong – advice must be negligent
 If you take advice off of everyone, you have to show that it was reasonable for you to think that they were capable of
giving advice – some responsibility on you, as well (contributory negligence – reduced liability)
 Hutch does not understand why giving statements in social settings is any different
o If you are a professional in a social setting, and you can’t be bothered to give a disclaimer, then why should
you be protected?

Queen v. Cognos Inc. [1993] SCC

IT Company
Facts Cognos, an Ottawa-based computer software company, was looking to hire someone to assist with a new software product
that it was developing. During a job interview, the manager of product development made representations to Queen about the
project and the successful candidate’s role within the development of same. Among those representations were: that the
position was one drawing upon Queen’s employment background, that the project would last no less than two years, and that,
by inference, that the project actually existed. Queen was offered the position with Cognos, to which he accepted. The
problem was that the project had not been approved by Cognos’ board of directors at the time that the position was offered to
him. Thus, barely five months after his arrival in Ottawa from Calgary, Queen was advised that there would be a
reassignment of personnel involved with the project, owing to diminished research and development funding. Queen was
informed that, unless a position was available to him in another department, he would most likely be laid off. Queen was
transferred around a few times but was ultimately terminated 18 months after he started with them. Queen argued that if not
for the representations made during the interview as to the nature and existence of the employment opportunity, he would not
have left his secure position in Calgary. He sued for negligent misrepresentation.
Issue(s)  Did Cognos or its representative owe a DOC to Queen during the pre-employment interview, with respect to the
representations made to him about the nature and existence of the employment opportunity being offered?
 If so, did Cognos or its representative breach this DOC?
 If yes to the above two questions, does it matter that the subsequent employment agreement signed by the plaintiff had
provisions allowing for termination “without cause” and reassignment?
Decision Yes, yes and no – liability owed by Cognos
Reasons Justice Iacobucci
 In order to be successful in a claim for negligent representation in Canada, the plaintiff must prove 5 things:
o There must be a duty of care based on a “special relationship” between the representor and the representee
 Similar to the idea of proximity, reasonable foreseeability, etc.
o The representation in question must be untrue, inaccurate, or misleading
o The representor must have acted negligently in making said misrepresentation
o The representee must have relied, in a reasonable manner, on said negligent misrepresentation
o The reliance must have been detrimental to the representee in the sense that damages resulted
  The five elements had been made out in this case
o The defendant was under an obligation to exercise due diligence with respect to the representations made to the
plaintiff about the employment opportunity
o The representations were made negligently – it is not sufficient that he believed what he was saying to be true
o It was foreseeable that the plaintiff would be relying on the information given in order to make his career
decision, it was reasonable for the plaintiff to rely on this information, and it was foreseeable that the plaintiff
would sustain damages due to the misrepresentation
o Rejects the restrictive approach in Hedley Byrne of confining duty of care to "professionals" who are in the
business of providing information and advice, such as doctors, lawyers, bankers, architects, and engineers, reflects
an overly simplistic view of the analysis required in cases such as the present one. 
 The question of whether a duty of care with respect to representations exists depends on a number of
considerations including, but not limited to, the representor's profession. 
 While this factor may provide a good indication as to whether a "special relationship" exists between the
parties, it should not be treated in all cases as a threshold requirement. There may be situations where the
surrounding circumstances provide sufficient indicia of a duty of care, notwithstanding the representor's
profession. Indeed, the case at bar is a good example.
Ratio  In order to be successful in a claim for negligent representation in Canada, the plaintiff must prove 5 things:
o There must be a duty of care based on a “special relationship” between the representor and the representee
 Similar to the idea of proximity, reasonable foreseeability, etc.
o The representation in question must be untrue, inaccurate, or misleading
o The representor must have acted negligently in making said misrepresentation
o The representee must have relied, in a reasonable manner, on said negligent misrepresentation
o The reliance must have been detrimental to the representee in the sense that damages resulted
Notes  Iacobucci extends to whom a DOC is owed but he does not throw it wide open – there must still be reasonable reliance,
proximity, etc.
 Casual interactions are not going to ground a basis for liability
 But that doesn’t mean that it is relevant whether you are getting paid – this is important for contract but not relevant for
tort
o If you are acting in a professional manner, regardless of payment, you are expected to uphold a SOC of a
reasonable and prudent person in your field
 Note the difference between this case and in the cases of Candler and Hedley Byrne
o The other cases were about statements made by professionals in the business of making statements
o This was a computer software company – not in the business of making statements

Spring v. Guardian Assurance plc [1994] UK

Facts The plaintiff was employed by a company that acted as agents for the sale of insurance products by Guardian Assurance. The
plaintiff was designated as a “company representative” of Guardian Assurance, and thus was authorized to sell Guardian
Assurance policies and to advise on their merits. When the plaintiff’s employer was sold to Guardian, its new CEO did not
get along with the plaintiff, and so he was subsequently dismissed without explanation. He then sought to form his own
business selling insurance and approached the Scottish Amicable Life Assurance Society to be appointed as one of their
company representatives. The rules governing insurance companies and their hiring processes for representatives required
Scottish Amicable to take reasonable steps to satisfy themselves that the prospective employee was of good character and of
the requisite aptitude and competence. One reasonable step included taking up references relating to character and
experience. Guardian Assurance sent unsatisfactory references for the plaintiff to Scottish Amicable and to other companies
that were considering him for similar positions. As a result, he was unable to secure employment. He sued his previous
employer for negligent misstatement.
Issue(s) Can a defamatory reference invoke liability in negligence to the subject of the reference if it is compiled without reasonable
care?
Decision Yes
Reasons Lord Goff
 Where the plaintiff entrusts the defendant with the conduct of his affairs, in general or in particular, the defendant may
be held to have assumed responsibility to the plaintiff, and the plaintiff to have relied on the defendant to exercise due
skill and care, in respect of such conduct.
 An employer who provides a reference in respect of an employee to a prospective new employer owes a DOC to the
employee in respect of preparation of the reference
 o If the employer breaches this duty, then they are liable for damages for the economic loss suffered by the
employee as a result
Ratio  An employer who provides a reference in respect of an employee to a prospective new employer owes a DOC to the
employee in respect of preparation of the reference
o If the employer breaches this duty, then they are liable for damages for the economic loss suffered by the
employee as a result
Notes  Special relationship between employer and employee

Henderson v. Merrett Syndicates [1994] UK

Facts Lloyd’s of London, an insurance market, was organized in syndicates – groups who shared the business, risk and reward, of
underwriting insurance policies and similar projects. The syndicate acted as a market which offered insurance on the one
hand and investment opportunity on the other. The active business of a syndicate was run by underwriting agents. The
liability of an investor, known as a “name”, was unlimited – names shared the profits but were also exposed to unlimited
liability in the event of losses. At the time of the case, hurricanes in the USA had led to unprecedented losses for insurers.
After the hurricanes, Lloyd’s called upon the investors to cover their share of the losses. The names sued the people running
the underwriting agents for negligent management of the investment fund. Henderson was one of the “names” and Merrett
Syndicates was one of the underwriting agents. It was accepted that the underwriting agents had a duty to exercise due care
and skill – the question was whether the agents could be liable to the indirect investor (the names behind).
Issue(s) Were the agents liable to the indirect investors?
Decision Yes
Reasons Lord Goff
 Hedley Byrne has always been regarded as important in that it established that, in certain circumstances, a DOC may
exist in respect of words as well as deeds
o On the reason that one party assumed or had undertaken a responsibility towards the other
 This principle extends beyond the provision of information and advice to include the performance of other services
o It follows, of course, that although, in the case of the provision of information and advice, reliance upon it by
the other party will be necessary to establish a cause of action (because otherwise the negligence will have no
causative effect), nevertheless there may be other circumstances in which there will be the necessary reliance
to give rise to the application of the principle. In particular, as cases concerned with solicitor and client
demonstrate, where the plaintiff entrusts the defendant with the conduct of his affairs, in general or in
particular, he may be held to have relied on the defendant to exercise due skill and care in such conduct.
 Thus, prima facie a duty of care is owed in tort by the managing agents to such names.
Ratio  Hedley Byrne has always been regarded as important in that it established that, in certain circumstances, a DOC may
exist in respect of words as well as deeds
o On the reason that one party assumed or had undertaken a responsibility towards the other
 This principle extends beyond the provision of information and advice to include the performance of other services
Notes

Haig v. Bamford et al. [1977] SCC

Facts A company was trying to expand. They hired accountants to produce audited financial statements to be relied on by potential
private investors (not public – so a finite, select group of people). Haig, relying upon these statements, agreed to invest
$20,000. It was discovered that the defendants had failed to spot an error made by the bookkeeper, and the business had in
fact been operating at a loss. The defendants were proven to be negligent at trial. After later realizing that the company was
not doing well, Haig decided to make a secondary investment of $2,500 in hopes of saving some of the money he initially put
in. Subsequently, he lost his entire investment and sued for negligent misrepresentation.
Issue(s) Did the accountants owe the plaintiff a DOC, even though they did not know his exact identity?
Decision Yes – DOC owed
Reasons Dickson J
 Several possible tests could be applied to invoke a duty of care on the part of accountants with regards to third parties
o Foreseeability of the use of the financial statement and the auditor’s report thereon by the plaintiff and reliance
thereon
 Unnecessary to use this test
o Actual knowledge of the limited class that will use and rely on the statement
  This is the correct test to use
 Even if they don’t know the precise identity of the person in the class
o Actual knowledge of the specific plaintiff who will use and rely on the statement
 This is too narrow
 The test laid out in Lord Denning’s dissent in Candler and took up by the majority in Hedley Byrne is:
o Professionals owe a duty to their employer or client, and to any third person to whom they themselves show
the reports or to whom they know their employer is going to show the reports so as to induce him to invest
money or take some other action on them.
o They do not owe a duty to strangers of whom they have heard nothing and to whom their employer without
their knowledge may choose to show their reports.
o Duty is confined to cases where the professional prepares his reports and makes his report for the guidance of
the very person in the very transaction in question, though it may be extended to a specific class of persons in a
specific class of transactions.
 Applying the test to the case
o The accountants prepared financial statements for reward in the course of their professional duties.
o The statements were for benefit and guidance in a business transaction.
o The accountants were aware that the Company intended to supply the statements to members of a very limited
class in furtherance of a transaction the nature of which is known to the accountant.
o Haig was a member of the class.
 Thus, the accountants owed Haig a duty to use reasonable case in the preparation of the accounts.
 Not unreasonable that the accountants would be responsible to a small group of people who were being shown the
accounts to invest in the company
o It is ok because it is a small class and the accountants knew that it was a small class
Ratio The SCC determined that accountants owed a DOC to those they knew would rely on the statements they prepared
 Where an accountant has negligently prepared financial statements and a third party relies on them to his or her
disadvantage, a duty of care will arise where:
o The accountant knows that the results will be relied on by the plaintiff;
o The plaintiff is a member of a known limited class;
o The statements have been prepared primarily for guidance of that limited class and for purposes the plaintiff
did in fact rely on them for.
 The accountant does not need to know the specific identity of the user as long as the accountant was aware that the client
intended to supply the statements to members of this very limited class including the user.
Notes  SCC specifically addressed third-party liability in relation to auditors/accountants
 Hutch: Numbers have an effect on the court
o The bigger the number of potential plaintiffs, the more nervous the SCC is going to get
 Actual knowledge is narrower than reasonable foreseeability in Cooper v. Hobart test
 Accountants have a contract with the company (not the investor) – they could put all kinds of conditions in the contract
(exclusion, limitation clauses, etc.)
o But that will only work with the company that they have the contract with
o Does not work against third parties who are not bound by the contract

Caparo Industries v. Dickman [1990] House of Lords

Facts A company called Fidelity plc, manufacturers of electrical equipment, was the target of a takeover by Caparo Industries plc.
Fidelity was not doing well. In March 1984 Fidelity had issued a profit warning, which had halved its share price. In May
1984 Fidelity's directors made a preliminary announcement in its annual profits for the year up to March confirming the
negative outlook. The share price fell again. At this point Caparo had begun buying up shares in large numbers. In June 1984
the annual accounts, which were done with the help of the accountant Dickman, were issued to the shareholders, which now
included Caparo. Caparo reached a shareholding of 30% of the company, at which point it made a general offer for the
remaining shares, as the City Code's rules on takeovers required. Once it had control, Caparo found that Fidelity's accounts
were in an even worse state than had been revealed by the directors or the auditors. It sued Dickman for negligence in
preparing the accounts and sought to recover its losses.
Issue(s) Did the auditors owe a DOC to Caparo?
Decision No
Reasons Lord Bridge of Harwich
 It seems to me that this masterly analysis, if I may say so with respect, requires little, if any, amplification or
 modification in the light of the later authority and is particularly apt to point the way to the right conclusion in the
present appeal.
o They adopt what Denning said in Candler v. Crane Christmas
 According to the old test, a defendant owes a DOC to a plaintiff who have suffered economic damage as a result of his
negligent statements, when there is sufficient proximity between the plaintiff and the defendant
o Sufficient proximity exists if the defendant knew that his statement would be communicated to the plaintiff,
either as an individual or as a member of an identifiable class, specifically in connection with a particular
transaction or transactions of a particular kind, and that the plaintiff would be very likely to rely on it for the
purpose of deciding whether or not to enter upon that transaction or upon a transaction of that kind
 You don’t just owe people a DOC, you owe them a DOC for particular things
o When those accountants did those accounts, they were not doing it so that people could invest in the company
– they were doing it for the purpose of the shareholders exercising their right to make sure that management
was conducting their business in an efficient manner
 When Caparo utilized the accounts, they were operating as shareholders, not investors
 The shareholders could only reasonably rely on the accounts to the extent of the purpose for which
the accounts were prepared
 As a purchaser of additional shares in reliance on the auditor’s report, he stands in no different
position from any other investing member of the public to whom the auditor owes no duty
 One argument is that there can be no distinction in law between the shareholder’s investment decision to sell the shares
he has or to buy additional shares. It follows, therefore, that the scope of the duty of care owed to him by the auditor
extends to cover any loss sustained consequent on the purchase of additional shares in reliance on the auditor’s negligent
report
o I believe this argument to be fallacious
 It is never sufficient to ask simply whether A owes B a duty of care. It is always necessary to determine the scope of the
duty by reference to the kind of damage from which A must take care to save B harmless.
o The question is always whether the defendant was under a duty to avoid or prevent that damage, but the actual
nature of the damage suffered is relevant to the existence and extent of any duty to avoid or prevent it
Ratio  In order for a DOC to arise:
o Harm must be reasonably foreseeable as a result of the defendant’s conduct
o The parties must be in a relationship of proximity
 Sufficient proximity exists if the defendant knew that his statement would be communicated to the
plaintiff, either as an individual or as a member of an identifiable class, specifically in connection
with a particular transaction or transactions of a particular kind, and that the plaintiff would be very
likely to rely on it for the purpose of deciding whether or not to enter upon that transaction or upon a
transaction of that kind
o It must be fair, just and reasonable to impose liability
 But…it is implicit in the passages referred to that the concepts of proximity and fairness are not susceptible of any such
precise definition as would be necessary to give them utility as practical tests, but amount in effect to little more than
convenient labels
o Since Anns, the House of Lords has emphasized the inability of any single general principle to provide a
practical test which can be applied to every situation to determine whether a DOC is owed and, if so, what is
its scope
o The law has now moved in the direction of attaching greater significance to the more traditional categorization
of distinct and recognizable situations as guides to the existence, the scope and the limits of the varied duties of
care which the law imposes
Notes  Courts start to re-orient
o Era of neo-liberalism (revival of full-throated capitalism) – contract should be the governing device not tort
law
o English courts started to pull back from Anns
 We have to be careful because we’re not talking about Mrs. Donoghue – we’re talking about a big company and they
invest in various other companies (they invest in order to make profits)
 Sends a message to Caparo’s of the world to do your own research
 Policy: If we impose too much liability on the accountants – they could decide to get out of the business of auditing
(maybe the fees involved are insufficient to bare this kind of risk)
 Hercules Managements Ltd. v. Ernst & Young [1997] SCC

Facts The defendants were auditors for two companies. The plaintiffs were shareholders in the companies. The defendants created
financial statements for the companies. The plaintiffs claimed that the statements were carelessly made, and they suffered
economic loss as a result of relying on the statements.
Issue(s) Did the defendants owe the plaintiffs (third-party investors) a DOC?
Decision No – judgement for the defendants
Reasons La Forest J
 The existence of a duty of care in tort is to be determined through an application of the two-part Anns/Kamloops test.
That approach should be taken here. To create a “pocket” of negligent misrepresentation cases in which the existence of
a duty of care is determined differently from other negligence cases would be incorrect.
 First, we must ask whether there is a relationship of proximity between the parties giving rise to a prima facie duty, and
second whether policy considerations negative or limit the existence of such a prima facie duty
 Proximity can be seen to inhere between the defendant-representor and the plaintiff-representee when two criteria in
relation to reliance may be said to exist on the facts:
o The defendant ought reasonably to foresee that the plaintiff will rely on his or her representation
o Reliance by the plaintiff would, in the particular circumstances of the case, be reasonable
 The second stage can be explained as follows:
o Enquiries concerning the defendant’s knowledge of the identity of the plaintiff (or of the class of plaintiffs) and
the use to which the statements at issue are put may now quite properly be conducted in the second branch of
[the Anns] test when deciding whether or not policy considerations ought to negative or limit a prima facie
duty that has been found to exist.
o The absence of these factors will normally mean that concerns over indeterminate liability inhere and,
therefore, that the prima facie duty of care will be negated. Their presence, however, will mean that worries
stemming from indeterminacy should not arise since the scope of liability is sufficiently delimited. In such
cases, policy considerations will not override a positive finding on the first branch of the Anns/Kamloops test
and a duty of care will quite properly be found to exist .
 The deterrence of negligent conduct by auditors is an important policy consideration, however in the final analysis it is
outweighed by the socially undesirable consequences to which the imposition of indeterminate liability on auditors
might lead, such as
o The increased insurance premiums, the higher costs faced by accountants, the opportunity costs in time spent
on litigation rather than on generating accounting revenue, reduction in the availability of accounting services
as marginal firms are driven to the wall, and increased costs for consumers of accounting services.
 Applying this conception of duty to the facts of the case at hand
o A prima facie duty arose because the reliance of shareholders on audited statements is reasonably foreseeable,
especially in view of the statutory requirement to place financial statements before the shareholders at the
annual meeting.
o The plaintiff’s reliance was reasonable: the information was given deliberately and in the course of business by
the defendant, who was a professional who had an indirect financial interest in the transaction in respect of
which the representation was made.
 This prima facie duty, however, was negated by the policy concern for indeterminate liability, because, although in this
case the defendant knew the identity of the shareholders who relied on the audit reports, the reports were not used for
precisely the purpose or transaction for which they were prepared.
Ratio  To create a “pocket” of negligent misrepresentation cases in which the existence of a duty of care is determined
differently from other negligence cases would be incorrect – the Anns test should be applied
o Proximity can be seen to inhere between the defendant-representor and the plaintiff-representee when two
criteria in relation to reliance may be said to exist on the facts:
 The defendant ought reasonably to foresee that the plaintiff will rely on his or her representation
 Reliance by the plaintiff would, in the particular circumstances of the case, be reasonable
o The deterrence of negligent conduct by auditors is an important policy consideration, however in the final
analysis it is outweighed by the socially undesirable consequences to which the imposition of indeterminate
liability on auditors might lead, such as:
 The increased insurance premiums, the higher costs faced by accountants, the opportunity costs in
time spent on litigation rather than on generating accounting revenue, reduction in the availability of
accounting services as marginal firms are driven to the wall, and increased costs for consumers of
accounting services.
 o BUT enquiries concerning the defendant’s knowledge of the identity of the plaintiff (or of the class of
plaintiffs) and the use to which the statements at issue are put may now quite properly be conducted in the
second branch of [the Anns] test when deciding whether or not policy considerations ought to negative or limit
a prima facie duty that has been found to exist.
o The absence of these factors will normally mean that concerns over indeterminate liability inhere and,
therefore, that the prima facie duty of care will be negated. Their presence, however, will mean that worries
stemming from indeterminacy should not arise since the scope of liability is sufficiently delimited. In such
cases, policy considerations will not override a positive finding on the first branch of the Anns/Kamloops test
and a duty of care will quite properly be found to exist.
Notes  They back up the House of Lords decision in Caparo, but they don’t think negligent statements is a special area separate
from negligent acts
o They stick with the Anns test and don’t abandon it – no more “special relationships”
 Negligent statements are the same as negligent acts, but we’ll bear in mind that they are statements when we get to the
policy considerations
 Hutch: we need to place more of an incentive on auditor’s to not be negligent!

Economic Loss
 Can a person recover for pure economic loss?
o In 1875, Cattle v. Stockton – cattle was a contractor hired by a land-owner to put a
tunnel under a road – water mane broke and Cattle could not finish the contract –
land-owner had a claim against the owners of the water pipe for flooding the tunnel –
but could the contractor sue the water company because they could not complete the
contract while the area was flooded – contractor did not have any property – can they
recover for the economic losses/lost profits from delaying the contract – court said no
– you did not suffer personal injury – no property damage, not even a threat to this –
pre-Donoghue v. Stevenson
o Donoghue v. Stevenson comes along and now we owe a duty to our neighbors
 Negligent act
 Resulting in personal injury
 Relatively small-scale commercial transaction
o Question is how far are we going to stretch this ratio?
o Hedley Byrne v Heller – statements
 Not limitless – but we can owe people a DOC for negligent statements
 Court never confronted directly the idea that this would lead to recovery
largely for economic losses – not property or personal injury
 Does this mean now that pure economic losses are now recoverable from an
act?
 Is there a difference between lost future profits and lost initial investments?
o i.e. losses v. future losses
 Difference between pure economic loss and personal injury
o Awarding damages to people who suffer personal injuries does not make them whole
again

Weller v. Foot and Mouth Disease Research Institute [1966] UK

Facts A virus escaped from the institute’s facility (government-run research agency) and infected nearby cattle. The cows had to be
killed and the entire area was placed under agricultural quarantine. As a result, Weller (a cattle auctioneer) lost most of his
business. He sued the institute for damages. Negligence was admitted, since farmers with infected cattle had recovered
 damages already. The auctioneers though were strictly a business loss, because they did not own the cattle. Only duty of care
was in dispute.
Issue(s) Did the Institute owe Weller a DOC?
Decision No DOC owed
Reasons Widgery J
 The plaintiffs argued that based on the Donoghue v Stevenson neighbor principle, the defendants owed a duty to the
auctioneers because they should have foreseen the damage to the auctioneers and failed to take proper precaution against
the escape of the virus.
o If this argument is sound, then the liability of the defendants is likely to extend far beyond the loss suffered by
the auctioneers – floodgates argument
o Although the magnitude of these consequences is great, it should not deprive the plaintiffs of their rights if
they are sound
 The problem is – there is tons of jurisprudence both before and after Donoghue v. Stevenson holding that a plaintiff
suing in negligence for damages suffered as a result of an act or omission of a defendant cannot recover if the act or
omission did not directly injure, or at least threaten directly to injure, the plaintiff’s person or property.
o The categories of negligence never close, BUT when the court is asked to recognize a new category, it must
proceed with some caution
o As I have said, there are probably a dozen other cases which could be cited to illustrate the application of that
principle, but I am invited to consider those cases in the light of the more recent decision of the House of Lords
in Hedley Byrne v Heller
 It is now submitted that the plaintiffs’ ultimate success in that case has swept away any existing notion that direct injury
to the person or property of the plaintiff is necessary to support an action in negligence and that the door is now open to
the plaintiffs in the present action to recover the indirect or consequential loss which they have suffered
o But – in general, Hedley v Byrne maintains that you still can’t recover for economic loss alone – the decision
is confined to statements and there is nothing that says that now economic losses are recoverable from
negligent acts
 The defendants’ duty to take care to avoid the escape of the virus was due to the foreseeable fact that the virus might
infect cattle in the neighborhood and cause them to die. The duty of care was accordingly owed to the owners of cattle in
the neighborhood, but the plaintiffs were not owners of cattle and had no proprietary interest in anything which might
conceivably have been damaged by the virus if it escaped.
 There are three categories where a person may recover damages in negligence for injury sustained through the act or
omission of another:
o He may recover where he suffers direct injury to his person or property
o Secondly, he may recover when he suffers resulting or consequential loss arising directly out of the injury,
damage or interference with property or person, provided he had a proprietary right in the person or property.
o The third category (Hedley Byrne – Pure Economic Loss) is where a person suffers pecuniary
loss disassociated from the first two categories and, in this category, he can only recover damages if he has
been directly placed in a special relationship involving an express or implied undertaking of responsibility with
the person from whom he claims damages, i.e. negligent statements
Ratio  Duties of care related to negligence generally cover direct damage, and are rarely extended to damages of pure
economic loss, although it is possible; Hedley- Byrne Test. 
 A plaintiff suing in negligence for damages suffered because of an act or omission on the part of the defendant, cannot
recover if that act or omission did not directly injure or at least threaten to injure the plaintiff’s person or property
 We will allow losses, but we will not allow speculative losses
Notes  The defendant in this case is a public institute
 Are economic losses the same as loss of profit?
o Different from Candler where the plaintiffs invested money and lost that money
o Here, they lost money that they did not have yet
o Not all economic losses are the same
 2 years after Hedley Byrne – counsel want to argue that the ratio of that case does not apply only to statements but to
acts as well
o i.e. Pure economic loss should be recoverable from negligent acts
 Not talked about that much in the case but they are a government-run agency trying to help society by conducting
research
o Ironically, they end up causing problems
o Does this make a difference?
 o Potentially, if we were to analyze this today through the Cooper v. Hobart test – would have to consider policy
o BUT – does it matter that people are going to go out of business in a small town whose economy presumably
runs off of agriculture?
 Also, worth noting – decision by Denning in Lamb case
o We want to encourage people to get insurance – because if you have insurance, you don’t have losses
o Who is in the best position to take steps to guard against the losses?

Spartan Steel [1973]

Facts Spartan Steel is a galvanizing company. They take in raw materials, run them through various machines and produce steel.
They run on a 24-hour cycle. Business is going well. They do 4 or 5 melts a day and they are powered by the local electricity
agency. Outside of their property, up the road, there are some excavators digging up certain land and, in the process, they
break the electrical supply to a variety of sources, one of which being Spartan Steel. The electrical cable was not owned by
Spartan Steel, nor was it on Spartan Steel’s land. They are in mid-melt, the power goes off, and they lose what was in the
machine at that point. It took a considerable amount of time to turn the electricity back on and during that time, they would
have done 3 more melts. Spartan Steel sues the excavators for the loss of raw materials that were in the melt at the time the
power went off, the lost profits on that melt AND the lost profits on the 3 melts they were unable to do. So, we have claims
for property damages (likely not a problem), lost profits on the melt (somewhat speculative), and lost profits on the 3 other
melts they were unable to do (completely speculative).
Issue(s) Can they recover?
Decision For some claims but not all
Reasons Lord Denning
 Introduces a concept that turns out to be important
o Distinguishes between consequential economic loss and pure economic loss
 Two kinds of economic losses in play
o Losses that are consequential upon property damage – those kinds of losses along with the property damage
are recoverable
 Not only can you get damages for the raw materials (property damage), but you can also get lost
profits on that melt (consequential)
 Acknowledging lost profits but only because it is consequential on property damage
o But you can’t have the lost profits for the 3 other melts
 Those were not consequential on any damage to your property – if the cable was the property of
Spartan Steel, they would have been able to recover for this too
 Those were not performed because the electricity was cut off – not because your property in the melt
was damaged
 If we allowed this type of recovery to a third party, we would be opening up the floodgates of
liability – we need a containing device and that device is property damage
Lord Edmund Davies (dissent)
 Would have allowed recovery in this circumstance
 In a nicer way, suggests that Denning is being a timorous sole in this case
Ratio  A plaintiff can recover for losses resulting from negligent acts providing that the losses are for damages to their
property, or for lost profits that are consequential to the property damages
o Pure economic losses, as a result of damages to the property of a third-party are not recoverable
Notes

Caltex – Australia

Facts Oil gets dropped off in Sydney Harbor. To be refined, and then sent out, it must cross over to a separate refinery. There is a
pipeline that runs from one side to the other. The pipeline is owned by one side but not the other. A barge comes along and
breaks the pipeline. This obviously creates damage, but it also prevents oil from being shipped between the pipeline to
Caltex. After, they make all kinds of separate arrangements to get the oil to the other side (very costly) and they still don’t
get the same amount of oil over as they would have, had the pipeline not been damaged. Therefore, they also want to claim
for lost profits. They want to claim for expenditures getting the oil from one side to the other, and they weren’t refining as
much so they were losing profits. The defendants were negligent. They say “yeah, we are liable for damaging the pipeline
and the cost of repairing the pipeline. We might have to pay for the other side’s loss of business during the period in which
 the pipeline was being fixed. BUT Caltex doesn’t own the pipeline”.
Issue(s) Can Caltex recover?
Decision Yes
Reasons  We still want to confine liability – we can’t just let any economic losses be recovered but this is as close to being
Caltex’s pipeline as anyone else’s because the only source of this pipeline is to Caltex
o They don’t own the pipeline, but it is only used to get oil to them
 There is sufficient proximity, and reasonable foreseeability, even though they didn’t own the property
o They were the exclusive users of the pipeline
 We don’t need to worry about opening the floodgates
o No issue of multiplicity of claims here
Ratio
Notes  Hard to know whether the rationale of this case was:
o Damage that occurs to a third-party’s property that is so closely aligned to a plaintiff, can be treated as if it
were the plaintiff’s; OR
o The key is not property damage – they key is the level of proximity and reasonable foreseeability that existed

Canadian National Railway Co v. Norsk Pacific Steamship Co [1992] SCC

Huge case
Facts A tug owned and operated by Norsk negligently struck a railway bridge owned by Public Works Canada (Canadian
government), near the mouth of the Fraser River in BC. The Canadian National Railway (one of the biggest companies in
Canada at the time) was one of several railway companies which held contracts with PWC to use the bridge. CNR was the
primary user of the bridge (86% of total use) and the bridge was known locally as the "CNR Bridge". The bridge was the sole
direct link between CNR rails on the north and south shores of the Fraser. The tug owners were familiar with the area and
were at all times aware that the bridge was mainly used by CNR and was essential to their operations. After the accident, it
took several weeks to repair the bridge, during which time CNR and other railways were forced to re-route traffic. This
increased the cost of operations and reduced the freight capacity during that time. CNR sued Norsk for additional cost
incurred as a result of the closure of the bridge. Norsk stated that they were willing to pay for damage of bridge, but that they
should not pay for the economic losses caused to CNR because of the Weller rule.
Issue(s)  Can a person who contracts for the use of the property of another sue a person who damages that property for losses
resulting from their inability to use the property during the period of repair?
 Can purely economic losses such as this be recovered, or is the right to recover in tort confined to cases where the
plaintiff can show that his or her property or person was injured?
Decision Judgment in favor of CNR
Reasons McLachlin J
 Nature of the problem
o Where the fault is negligence, the duty extends to all those to whom the tortfeasor may foreseeably cause
harm: Donoghue v. Stevenson.
o Recovery was limited to cases where the tortfeasor had caused damage to the plaintiff or his property.
 There has been a fear of indiscriminately opening the floodgates of liability
 Limits were needed to prevent “liability in an indeterminate amount for an indeterminate time to an
indeterminate class”
o This has unjustly deprived some deserving plaintiffs of recovery, so the courts began to allow recovery of pure
economic loss where they thought it was just.
o However, apart from reliance damages for negligent misrepresentation, the course of the law has been neither
uniform nor uncontroversial.
 The search for a principled mechanism of limitation has proved elusive
 The incremental approach to the problem of determining the limits for the recovery of pure economic loss which has
adopted by this Court in Kamloops should be confirmed
o Proximity may be viewed not so much as a test, but as a broad concept, covering a number of disparate
circumstances in which the relationship between the parties is so close that it is just and reasonable to permit
recovery in tort.
 The meaning of “proximity” is to be found rather in viewing the circumstances in which it has been
found to exist and determining whether the case at issue is similar enough to justify a similar finding.
o Before the law will impose liability, there must be a connection between the defendant’s conduct and the
plaintiff’s loss which makes it just for the defendant to indemnify the plaintiff
 Viewed thus, the concept of proximity may be seen as an umbrella, covering a number of disparate
 circumstances in which the relationship between the parties is so close that it is just and reasonable to
permit recovery in tort
 The complexity and diversity of the circumstances in which tort liability may arise defy identification
of a single criterion capable of serving as the universal hallmark of liability
o Pure economic loss is prima facie recoverable where, in addition to negligence and foreseeable loss, there is
sufficient proximity between the negligent act and the loss.
 Proximity is the controlling concept which avoids the specter of unlimited liability
 Proximity may be established by considering factors such as the nature of the case, the relationship
between the parties, physical propinquity, assumed or imposed obligations and close causal
connection.
o In determining whether liability should be extended to a new situation, courts will have regard to the factors
traditionally relevant to proximity such as the relationship between the parties, physical propinquity, assumed
or imposed obligations and close causal connection. And they will insist on sufficient special factors to avoid
the imposition of indeterminate and unreasonable liability. The result will be a principled, yet flexible,
approach to tort liability for pure economic loss.
o Physical injury has the advantage of being a clear and simple indicator of proximity.
 If one is close enough to someone or something to do physical damage to it, one is close enough to be
held legally responsible for the consequences.
 What has happened where the rule has been broadened
o The comparative historical perspective provides little support for the need for a rule which confines recovery
of economic loss to cases where the plaintiff has suffered physical loss or has relied on a negligent
misstatement.
 Economic arguments urged in support of restricting recovery
o The insurance argument.
 The plaintiff is in a better position to predict economic loss consequent on an accident, and hence
better able to obtain cheap insurance against the contingency.
o The loss spreading argument.
 It is better for the economic well-being of society to spread the risk among many parties (the victims)
rather than place it on the shoulders of the tortfeasor.
 This makes no sense when there’s only one victim.
o The “contractual allocation of risk” argument.
 The law of negligence has no business compensation persons who stand to suffer economic loss due
to damage to the property of another but has the ability to allocate the risk within their contracts
effectively with property owners.
 The notion that the business community should know the risks plan its affairs accordingly.
 It assumes that all persons or business entities organize their affairs in accordance with the
laws of economic efficiency, assigning liability to the “least-cost risk avoider.”
 It also assumes that all parties to a transaction share an equality of bargaining power which
will result in the effective allocation of risk.
 Application to this case
o The plaintiff C.N. suffered economic loss as a result of being deprived of its contractual right to use the bridge
damaged by the defendants’ negligence.
o Applying the Kamloops approach, its right to recover depends on:
 whether it can establish sufficient proximity or “closeness,” and
 whether extension of recovery to this type of loss is desirable from a practical point of view.
 The trial judge based his conclusion that there was sufficient proximity on a number of factors
o C.N.’s connection with the property damaged, the bridge, including the fact that C.N.’s property was in close
proximity to the bridge
o C.N.’s property could not be enjoyed without the link of the bridge, which was an integral part of its railway
system
o C.N. supplied materials, inspection and consulting services for the bridge, was its preponderant user, and was
recognized in the periodic negotiations surrounding the closing of the bridge.
 Such a characterization brings the situation into the “joint” or “common venture” category under which recovery for
purely economic loss has heretofore been recognized in maritime law cases from UK and US.
o Where the plaintiff’s operations are so closely allied to the operations of the party suffering physical damage
and to its property that it can be considered a joint venture with the owner of the property, the plaintiff can
recover its economic loss even though the plaintiff has suffered no physical damage to its own property.
 o To deny recovery in such circumstances would be to deny it to a person who for practical purposes is in the
same position as if he or she owned the property physically damaged.
 While proximity is critical to establishing the right to recover pure economic loss in tort, it does not always indicate
liability. It is a necessary but not necessarily sufficient condition of liability.
 The second question is whether extension of recovery to this type of loss is desirable from a practical point of view.
o Recovery serves the purpose of permitting a plaintiff whose position for practical purposes is indistinguishable
from that of the owner of the damaged property to recover what the actual owner could have recovered. This is
fair and avoids an anomalous result.
o The recovery of economic loss in this case does not open the floodgates to unlimited liability; the category is a
limited one.
o It has been applied in the UK and US without apparent difficulty.
o It does not embrace casual users of the property or those secondarily and incidentally affected by the damage
done to the property.
 Hutch – This seems like a strange way to divide liability. What about the 14% of users of the bridge?
Why can’t they recover?
o Potential tortfeasors can gauge in advance the scope of their liability.
Stevenson J (concurring)
 One cannot readily see a policy reason for excluding liability.
 The loss was identifiable, the victim identifiable, the damage almost inevitable. There is no danger of indeterminate
liability. 
La Forest J, in the dissent
 Contractual relational economic loss
o Whether a person A who contracts for the use of property belonging to another B can sue a person who
damages that property for losses resulting from A’s inability to use the property during the period of repair.
 The “bright line” rule
o Court have established a general rule that persons cannot sue a tortfeasor for suffering losses to their
contractual rights with the owner of property by reason of damages caused to that property by the tortfeasor.
o Limited to cases where property damage to a third party has occurred and where the plaintiff’s interest is
contractual.
 Differentiating factors of contractual relational economic loss
o The deterrent effect of tort law is already present.
 The right of action of the property owner puts pressure on the defendants to act with care or be liable
for damages, and the defendant in this case did pay substantial damages.
o Exclusion redirects the right of recovery. The property owner is both entitled to recover from the tortfeasor and
potentially liable under contract to the plaintiff.
 Here the plaintiff could not recover under an exclusion of liability cause, decided based on initial
contractual negotiations of who is in the best position to insure the risk at the lowest cost.
o These cases typically involve accidents.
 A good rule should place some incentive on both parties to act in an economically rational manner to
reduce total accident costs.
 A refined proximity analysis in contractual relational economic loss cases
o The proximity test generally looks at the problem strictly from the perspective of the defendant, but the
situation of both the defendant and the plaintiff needs to be examined in cases of this kind.
o We should consider which party is the better loss bearer in this type of case, i.e. which party is in a better
position to predict the frequency and severity of CN’s economic loss when bridges are damaged, and to plan
accordingly.
o In many cases, loss shifting to the better loss bearer runs squarely into the powerful objection that it is not also
the better risk avoider.
 When the case involves the question whether that party will be held liable at all, the concern for
deterrence overrides the concern about loss-bearing ability.
o Policy concerns with respect to which party can best bear the loss are particularly important.
 Policy concerns with respect to deterrence and cost internalization are generally at least substantially
met by the tortfeasor’s primary liability to the property owner.
 There is an overriding need for strict controls on potential reliability because the potential number of
claims of this type is practically unlimited.
o In this case, CN is undoubtedly in a better position to bear the loss than Norsk.
 CN was probably at least equally competent in terms of estimating the potential risks of bridge
 failure.
 CN would clearly be in a better position than PWC to estimate the potential costs of bridge failure to
CN’s operations.
 CN was better placed to protect itself from the consequences of those losses.
o Contract
 The contractual allocation of risk in this case is probably typical in that risk is allocated to the
potential victim of interrupted service, who benefits from a lower price and who is best placed to take
other measures to deal with accidental interruption of contractual benefits.
 Denying recovery will provide incentives to all parties to act in ways that will combine to minimize
the impact of losses once they occur.
o Implications of allowing recovery
 Both parties would need to seek additional insurance at considerable additional social cost.
 Insurance companies would benefit from the existence of a new and highly uncertain risk against
which companies likely to inflict property damage would need to insure.
 A denial of recovery in this case is justified in light of CN’s overwhelmingly superior risk bearing capacity on the facts
of this case.
Ratio  Where the plaintiff’s operations are so closely connected to the operations of the party suffering physical damage to its
property that it can be considered a joint venture, the plaintiff can recover its economic losses even though the plaintiff
has suffered no physical damage to its property
Notes  Case is important beyond economic loss because McLachlin elaborates on the whole DOC issue and what proximity
means
 There was a clause in the contract between CNR and Public Works Canada
o i.e. What happens if the bridge is not available?
o No liability to the government for the loss of profits from their users if the bridge is out of commission
o Presumably, this would have been reflected in the cost – CNR would have negotiated and said, well if you are
not liable then we shouldn’t have to pay as much
 If Public Works Canada had been on the hook for liability, would they have been able to sue the tug operators for all of
these claims being made to them for lost profits?
o Maybe, maybe not – why should Norsk have to pay for the types of contracts that PWC has?
o Similarly, why should Norsk have to bail out CN for making a deal with an exclusion clause?
 Dissent reflects this idea: CNR was prepared to take the risk with PWC, so why should this be
different with Norsk?
 Tort is not there to bail out people who make bad contracts
 Who should carry the cost of these events?

Winnipeg Condominium Corporation No 36 v. Bird Construction Co [1995] SCC

Facts A land developer (Tuxedo) contracted with Bird Construction to build an apartment building in accordance with plans and
specifications prepared by an architectural firm. Bird Construction subcontracted the masonry portion of the work. Tuxedo
converted the building into a condominium and Winnipeg Condo Corp became the registered subsequent owner of the land
and building. In real estate transactions, the doctrine of caveat emptor generally applies. WCC became concerned about the
masonry work on the exterior cladding of the building. They retained the initial architects and a firm of consulting engineers
to inspect the building, who offered the opinion that the building was structurally sound. Fifteen years later, a large section of
the cladding fell from the ninth story level of the building. WCC had subsequent inspections done which revealed structural
defects in the masonry work. The entire cladding was replaced at WCC’s expense ($1.5 million). WCC could not sue Tuxedo
because they had fulfilled all of the duties in their contract, i.e. they had answered all of their questions. The claim by
Winnipeg was not for property damages, it was for economic loss because the masonry was defective.
Issue(s) May a general contractor responsible for the construction of a building be held tortuously liable for negligence to a
subsequent purchaser of the building, who is not in contractual privity with the contractor, for the cost of repairing defects in
the building arising out of negligence in its construction?
Decision Yes – the reasonable costs of repairing the defects and putting the building back into a non-dangerous state are recoverable
economic loss
Reasons La Forest J
 Economic loss is a difficult category and, on its own, it does not warrant recovery
 If it was decided that the masonry was not at all dangerous, and it was just ugly – they would not be able to recover
o What makes this recoverable is the threat of personal injury – they are investing money to prevent personal
 injury and that is what tort law is all about
 Applied the two-part Anns test
 Was there a sufficiently close relationship between the parties so that, in the reasonable contemplation of Bird,
carelessness on its part might cause damage to a subsequent purchaser of the building such as the Winnipeg Condo
Corp?
o It is reasonably foreseeable to contractors that, if they design or construct a building negligently and if that
building contains latent defects as a result of that negligence, subsequent purchasers of the building may suffer
personal injury or damage to other property when those defects manifest themselves
o The reasonable likelihood that a defect in a building will cause injury to its inhabitants is also sufficient to
ground a contractor’s duty in tort to subsequent purchasers of the building for the cost of repairing the defect if
that defect is discovered prior to any injury and if it poses a real and substantial danger to the inhabitants of the
building
 The lack of contractual privity between the contractors and the occupiers of the building at the time
that the defect surfaces does not diminish the foreseeability of that potential
o There is also a strong underlying policy justification for imposing liability
 Maintaining a bar against recoverability for the cost of repair of dangerous defects provides no
incentive for plaintiffs to mitigate potential losses and tends to encourage economically inefficient
behavior
 Allowing recovery against contractors in tort for the cost of repair of dangerous defects thus serves an
important preventative function by encouraging socially responsible behavior
o In this case, it is clear that the masonry work on the building was poor enough to constitute a real and
substantial danger to the inhabitants and passersby
 Bird agreed that WCC behaved reasonably in fixing the defects but that they should not be held liable
for the cost of repairs on the principle that the owner of a defective article may simply discard it and
therefore remove the danger
 This argument is an inaccurate representation of the choice faced by home-owners – most buy as a
long-term investment and very few will choose to abandon or sell upon discovering a dangerous
defect
 Are there any considerations that ought to negate (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?
o There is a concern that the recognition of such a duty would interfere with the doctrine of caveat emptor (buyer
beware), which dictates that in the absence of an express warranty, there is no implied warranty of fitness for
human habitation upon the purchase of a house already completed at the time of sale.
 The assumption underlying the doctrine is that the purchaser of a building is better placed than the
seller or builder to inspect the building and to bear the risk that latent defects will emerge
necessitating repair costs.
 However, the facts of the case show that the purchaser is not the best placed to detect and bear the
risk of hidden defects.
o Given that most buildings have a relatively long useful life, the concern is that a contractor will be subject
potentially to an indeterminate amount of liability to an indeterminate number of successive owners over an
indeterminate time period.
 However, there is no risk of liability to an indeterminate class because the potential class of claimants
is limited to the very persons for whom the building is constructed: the inhabitants and successors in
title of the building.
 There is also no risk of liability in an indeterminate amount because the amount of liability will
always be limited by the reasonable cost of repairing only the defects in the building that constitute a
real and substantial danger to the inhabitants.
 The burden of proof will always fall on the plaintiff to demonstrate that there is a serious
risk to safety, that the risk was caused by the contractor’s negligence, and that the repairs
are required to alleviate the risk.
 Finally, there is little risk of liability for an indeterminate time because the contractor will only be
liable for the cost of repair of dangerous defects attributable to the contractor’s negligence during the
useful life of the building.
o No adequate policy considerations exist to negate the contractor’s duty in tort to subsequent purchases of
buildings
Ratio  A general contractor responsible for the construction of a building can be held tortuously liable for negligence to a
subsequent purchaser of the building, who is not in contractual privity with the contractor, for the cost of repairing
defects in the building arising out of negligence in its construction if:
 o It is reasonably foreseeable to contractors that, if they design or construct a building negligently and if that
building contains latent defects as a result of that negligence, subsequent purchasers of the building may suffer
personal injury or damage to other property when those defects manifest themselves
 The reasonable likelihood that a defect in a building will cause injury to its inhabitants is also sufficient to ground a
contractor’s duty in tort to subsequent purchasers of the building for the cost of repairing the defect if that defect is
discovered prior to any injury and if it poses a real and substantial danger to the inhabitants of the building
 Where negligence is established, and such defects manifest themselves before any damage to persons or property occurs,
they should be liable for the reasonable cost of repairing the defects and putting the building back into a non-dangerous
state
Notes  Hutch thinks this case is a little bit of a stretch – it is a long way from the Norsk special ‘joint venture’ relationship
o It is an outlier and doesn’t fit very well with the other SCC cases
 Important to note that Bird Construction did not even know about WCC – important in special relationships

White v. Jones [1995] UK

Facts After a family quarrel, the father of the plaintiffs executed a will cutting the plaintiffs out of his estate. Subsequently, he was
reconciled to them, and he instructed his solicitors, the defendants, to prepare a new will leaving 9000 pounds to each of the
plaintiffs. The solicitors neglected to act on these instructions for several weeks. Before the new will was prepared and
executed, the father died of a heart attack. The plaintiffs sued the solicitors claiming that the negligent delay deprived them
of the money they each would have received from the new will.
Issue(s) Does a testator’s solicitor owe a duty of care to a disappointed beneficiary of a will?
Decision Yes
Reasons Lord Goff
 A duty should be owed by the testator’s solicitor to a disappointed beneficiary, for four reasons:
1. If such a duty is not recognized, the only persons who might have a valid claim, i.e. the testator and his estate,
have suffered no loss, and the only person who has suffered a loss, i.e. the disappointed beneficiary, has no claim.
2. Legacies are important to beneficiaries in a society which recognizes the right of citizens to leave their assets to
whom they please.
3. If a solicitor has been negligent in such a way as to defeat his client’s testamentary intentions, the profession
cannot complain if such a liability may be imposed on their members.
4. The public relied on solicitors to prepare effective wills. A duty should be owed as a matter of justice.
 A solicitor who undertakes to perform services for his client may be liable to his client for failure to exercise due care
and skill in relation to the performance of those services in tort, as per Hedley Byrne, on the basis of assumption of
responsibility by the solicitor towards his client.
o However, in the absence of special circumstances, the work performed cannot be said to have been undertaken
for the intended beneficiary, and there would have been no reliance by the intended beneficiary, indeed the
intended beneficiary may not even have been aware that the solicitor was engaged in such a task.
 As a matter of justice, the courts should in cases such as these extend to the intended beneficiary a remedy under the
Hedley Byrne principle by holding that the assumption of responsibility by the solicitor towards his client should be held
in law to extend to the intended beneficiary who (as the solicitor can reasonably foresee) may, as a result of the
solicitor’s negligence, be deprived of his intended legacy in circumstances in which neither the testator nor his estate
will have a remedy against the solicitor.
Lord Browne-Wilkinson
 Although the present case is not directly covered by the decided cases, it is legitimate to extend the law to the limited
extent proposed using the incremental approach by way of analogy employed in Caparo Industries
o The solicitor who accepts instructions to draw a will knows that the future economic welfare of the intended
beneficiary is dependent upon his careful execution of the task. This assumption of responsibility for the task is
a feature of the categories of special relationship so far identified in the authorities.
Lord Nolan
 The solicitors in this case were acting in the role of family solicitors. As is commonly the case, the contract was with the
head of the family, but it would be astonishing if, as a result, they owed a duty of care to him alone, to the exclusion of
the other members of the family. In the particular circumstances of the case, the degree of proximity to the plaintiffs
could hardly have been closer.
Lord Mustill (dissent)
 The intentions of the testator, as proved at the trial, have been frustrated. The beneficiaries under the new will have
failed to receive what the testator wanted them to receive, and those who took under the old will have received moneys
 from the testator’s assets which at the time of his death he did not want them to have. In a real sense, the amounts of the
legacies have gone to the wrong people; a situation which many would feel to be unfair.
o However, to allow recovery would make the solicitor the source of a second fund, enabling both sets of parties
to benefit; so that those taking under the old will can receive and retain money from the testator’s estate which
the testator did not want them to have, and the successful plaintiffs can receive amounts equal to those which
the testator did want them to have, but from a quite different source.
 In Hedley Byrne, there was an undertaking of legal responsibility for careful and diligent performance in the context of a
mutual relationship. In this case, there is no such special relationship.
o The cardinal feature in Hedley Byrne was that the defendants undertook the job for the plaintiffs. The absence
of this feature from the instant appeal destroys the possibility of using Hedley Byrne as a stepping stone
towards the recognition of the cause of action sued upon
o Also, no reliance and the losses had not been suffered
Ratio  As a matter of justice, the courts should in cases such as these extend to the intended beneficiary a remedy under the
Hedley Byrne principle by holding that the assumption of responsibility by the solicitor towards his client should be held
in law to extend to the intended beneficiary who (as the solicitor can reasonably foresee) may, as a result of the
solicitor’s negligence, be deprived of his intended legacy in circumstances in which neither the testator nor his estate
will have a remedy against the solicitor.
Notes  If they are going to sue in tort, they must establish proximity and that they suffered the kind of loss that tort will
compensate them for.
o They claimed money that they never had, and the father might have revoked at any point again prior to his
death.
 There are no losses under the contract – his estate is the same
o He only had his wishes frustrated
o They also were not party to a contract with the solicitor
 Goff – we can’t really explain why based on the existing principles, but we are going to make an exception for lawyer’s
because we don’t want to make it look like we are giving them special privileges
 Dissent says – hard cases create bad law, it is better to stick with principle than allow recovery

Checo v. BC Hydro [1993]

Facts BC Hydro called for tenders to erect transmission towers and power lines. Checo was interested in making a tender and so
did a survey of the land by helicopter. On viewing the area, they noted that the area was in the process of being clear-cut.
Checo issued a tender and won. The tender was incorporated into the contract and included terms stating that Checo would
have no part in clearing a right-of-way of the land. Once the agreement was made no further clearing was done which
resulted significant difficulties for Checo. Checo sued in tort of negligent misrepresentation and in the alternative breach of
contract. The key issue in the case was whether the terms of the contract precluded Checo from suing in tort.
Issue(s)  Can a pre-contractual representation which becomes a contractual term found liability in negligent misrepresentation?
 If so, do the terms of the contract operate to exclude Hydro’s potential liability for any misrepresentations?
 Does an action for pre-contractual misrepresentation lie concurrently in contract and tort?
Decision Yes, no, and yes
Reasons La Forest and McLachlin J
 The basic rule governing concurrent 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
o Different remedies should be allowed since we should allow wronged parties to recover in any way possible
 In contract, the goal is to put the plaintiff back into the same position as if the contract were
performed
 In negligence, damages could amount to any loss that reasonably stemmed from the negligence
because the goal is to put the plaintiff into the position they would have been in had the
misrepresentation never occurred
 To this end, it is always open to parties to limit or waive the duties which the common law would impose on them for
negligence
o However, a contractual limitation may apply where the tort is independent of the contract in the sense of
falling outside the scope of the contract
 The right to sue in tort will not be excluded merely because the parties have dealt with it expressly in their contract –
what matters is how the parties have dealt with it
 o It is untrue that a contradiction of the tort duty by the contract completely negates the tort duty; instead, the tort
duty is diminished to the extent that it is contradicted by the contract
 If the basic rule governing concurrent liability is satisfied (i.e. a given pre-contractual misrepresentation does prima
facie support an action in both tort and contract, and the contract does not indicate the parties’ intention to limit or
negate the right to sue in tort) then the plaintiff will have a choice of actions
o This choice will likely be influenced by the relationship between the tort duty and the contractual duty
 There are three situations where a party can sue in tort and contract
o Where the contract stipulates a more stringent obligation than the general law of tort would impose
 In that case, the parties are hardly likely to sue in tort, since they could not recover in tort for the
higher contractual duty
 Though the right of to sue in tort still exists, it is generally not practical
o Where the contract stipulates a lower duty than that which would be presumed by the law of tort in similar
circumstances
 In this situation, like the first, there is little point to suing in tort because the tort duty (and
consequently any tort liability) is limited by the specific limitation agreed upon by the parties
o Where the duty in contract and the common law duty in tort are co-extensive
 In such cases, the plaintiff may seek to sue concurrently or alternatively in tort to secure some
advantage specific to the law of tort, such as a more generous limitation period
 The current situation falls within the third category and Checo is able to sue in both tort and contract
Iacobucci and Sopinka J (dissent)
 While the existence of a contract between two parties does not preclude the existence of a common law duty of care,
contractual exclusion or limitation clauses can operate either to exclude or limit liability, or to limit the duty owed by
one party to the other, whether in contract or in tort
o In neither case will the plaintiff be permitted to use an action in tort to circumvent the limitation of liability or
of duty in the contract
o BUT a contextual approach should be adopted that considers the context in which the contract is made, and the
position of the parties in respect to one another
 Where the contract context is commercial, and the parties are of equal bargaining power, the contract should govern
o In this case, there is no question of unconscionability or inequality of bargaining power
Ratio  There are important consequences to determining whether an action for pre-contractual misrepresentation lies
concurrently in tort and contract.
o An action in tort may differ from an action in contract with respect to limitation periods, remoteness rules,
extent of damages, and application of statutes.
 A pre-contractual misrepresentation will lead to concurrent liability where a given wrong prima facie supports an action
in both contract and tort, and the contract does not indicate that the parties intended to limit or negate the tort duty.
 If a given wrong does provide for concurrent liability, then the plaintiff will have a choice as to how to frame the action.
o If the contract duty is greater than the tort duty, then the plaintiff will likely sue in contract due to the
unavailability of recovery, in tort, for the higher contractual duty.
o If the contract duty is lesser than the tort duty, then the plaintiff will similarly likely sue in contract because
recovery in tort would be diminished by the extent to which the contract limits the tort duty.
o If the contract duty is equal to the tort duty, then the plaintiff will have to examine the potential differences
between the two claims (limitation periods, remoteness rules, extent of damages, and application of statutes) to
determine how best to frame the action.
Notes  Involves, like in Norsk, two large companies
 Can Donoghue claim in tort for the reduced value of the ginger beer? – this will be on the exam

Martel Building Ltd v. Canada [2000] SCC

Facts Canada held a 10-year lease with an option for renewal in a building owned by Martel. Martel was led to believe that they
were negotiating a lease renewal. However, Canada intended to proceed with a call for tenders. Martel attempted to negotiate
a renewal, but these attempts were frustrated by some of Canada’s employees not being earnest in negotiations. Canada did
not renew the lease and called for tenders. Martel bid. Martel’s bid lost even though it was the lowest bid. There was no
obligation of Canada by the terms of the tender that the lowest bid needed to be accepted. Martel sued in tort for damages
arising from negligent conduct during the tender process and negotiations for renewal of the lease.
Issue(s) Does a duty of care exist in the conduct of commercial negotiations and the tendering process?
Decision No
Reasons Iacobucci and Major JJ summed up the law on economic loss after Norsk.
 Claims concerning the recovery of economic loss are identical to any other claim in negligence in that the plaintiff must
establish a duty, a breach, damage and causation.
 Common law traditionally did not allow recovery of economic loss where a plaintiff had suffered neither physical harm
nor property damage, but over time the traditional rule was reconsidered.
 Types of cases that gives rise to potentially compensable economic loss
o The independent liability of statutory public authorities
o Negligent misrepresentation
o Negligent performance of a service
o Negligent supply of shoddy goods or structures
o Relational economic loss.
 The SCC has looked beyond the traditional bar against recovery of pure economic loss in favour of a case-specific
analysis that seeks to weigh the unique policy considerations which arise.
o A presumptive exclusionary rule exists only within the narrow realm of contractual relational economic loss
(an economic loss suffered via a plaintiff’s contractual relationship with a third party to whom the defendant is
already liable for property damage).
o Recovery for contractual relational economic loss is presumptively excluded (general exclusionary rule),
subject to categorical exceptions.
 McLachlin in Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd. (1997) adopted the
general exclusionary rule and categorical exceptions approach set forth by La Forest J in Norsk
o However, the categories of recoverable loss are not closed, and new ones may emerge as different cases arise.
 Unlike the other areas of economic loss, contractual relational economic loss continues to operate under a presumption
against recovery.
o The following categories of contractual relational economic loss are, to date, the sole exceptions to this
presumption:
 Where the claimant has a possessory or proprietary interest in the damaged property.
 General average cases (shipping cases, don’t worry it).
 Where the relationship between the claimant and the property owner constitutes a joint venture
(Norsk).
Ratio  Iacobucci and Major JJ summed up the law on economic loss after Norsk.
 No DOC arises in conducting commercial negotiations
Notes

Psychiatric Harm
 Used to be the case that people thought that if people had psychological challenges, this was
the result of moral failings
o About an act of will
o Now this thought has gotten a lot better but psychological challenges are still very
controversial
o There is a gendered aspect to it as well
 Social perceptions are different for psychological and psychiatric problems
o A lot more stigma associated with the latter
 Court will always require evidence of any condition
o They are going want proof that you actually have the condition – unlike a broken arm,
you don’t see psychological problems
 Assuming you get over that hurdle, and the court is persuaded that you have a condition like
this, why would the court treat these any differently than physical injuries?
o Harder to quantify damages
o Potential floodgates arguments
 But is that not why we have the main tort mechanisms?
 o Hutch: worried about malingerers and so they’re hung up about psychological
conditions
 But is this legit? These are serious illnesses and there is an usual amount of
stigma around them – different than in physical injuries
 Do we need special rules in tort law for psychiatric illness?

Alcock v. Chief Constable of the South Yorkshire Police [1991] UK

Facts Alcock concerned psychiatric harm caused by the Hillsborough disaster of 1989. This occurred at the Hillsborough Football
Stadium in which 95 spectators were killed and over 400 injured in a human crush. The disaster was broadcast live on
television and radio. South Yorkshire Police had admitted liability in negligence for the deaths, having allowed too many
supporters into the stadium. In the Alcock case, relatives of the deceased brought negligence claims in tort for psychiatric
harm or nervous shock. The police kept the bodies stored in a warehouse while they checked for alcohol in the bodies (they
were looking for a way out because they knew they were in trouble). As a result, it delayed people from being able to see
their relatives. Then when people did show up, they had to walk through the temporary mortuary and see 95 dead bodies
(traumatizing experience). Of the claimants, most had not been present in the stadium at the time of the disaster and none had
been in physical risk. Most had sustained psychiatric injuries after learning of the events by television or radio.
Issue(s) Did the police owe a DOC to the secondary victims who suffered psychiatric harm caused by nervous shock from viewing
the collapse of the stadium and later finding out that their loved ones had died from it?
Decision No duty owed
Reasons Lord Ackner
 McLoughlin v. O’Brian established that:
o A claim for damages for psychiatric illness resulting from shock caused by negligence can be made without the
necessity of the plaintiff establishing that he was himself injured or was in fear or personal injury AND
o A claim for damages for such illness can be made when the shock results:
 From death or injury to the plaintiff’s spouse or child or the fear of such death or injury, and
 The shock has come about through the sight or hearing of the event, or its immediate aftermath
 To succeed in the present appeal, the plaintiffs seek to extend the above boundaries by
o Removing any restrictions on the categories of persons who may sue
o Extending the means by which shock is caused, so that it includes viewing the simultaneous broadcast on TV
of the incident which caused the shock, and
o Modifying the present requirement that the aftermath must be “immediate”
 Shock is no longer a variant of physical injury but a separate kind of damage
o Application of the reasonable foreseeability test is far from being operative, this is due to:
 Even though the risk of psychiatric illness is reasonably foreseeable, the law gives no damages if the
psychiatric injury was not induced by shock (i.e. psychiatric illness caused by coping with the loss of
a loved one is not recoverable)
 Even where the nervous shock and subsequent illness was reasonably foreseeable, it has generally
been held that damages for merely being informed of, reading, or hearing about the accident are not
recoverable – a psychiatric illness induced by mere knowledge of a distressing fact is not
compensable
 Mere mental suffering, although reasonably foreseeable, if unaccompanied by physical injury, is not
a basis for a claim for damages
 There is no authority establishing this liability because at some point there needs to be a limit on the
duty of care owed to third parties
 “Shock” in the context of this case, is the sudden appreciation by sight or sound of a horrifying event,
which violently agitates the mind
 It has yet to include psychiatric illness caused by the accumulation over a period of time or
more gradual assaults of the nervous system
 Because “shock” in its nature is capable of affecting a wide range of persons, Lord Wilberforce in McLoughlin v.
O’Brian concluded that there was a real need to limit the extent of admissible claims – in this context, he considered that
there were three elements inherent in any claim
o The class of persons whose claims should be recognized
 Whether the degree of love and affection in any given relationship, be it that of relative or friend, is
such that the defendant, in the light of the plaintiff’s proximity to the scene of the accident in time
 and space and its nature, should reasonably have foreseen the shock-induced psychiatric illness, has
to be decided on a case by case basis
 Needs to be a special relationship
 The closer the tie, the greater the claim for consideration, but it has to be judged in the light of the
other facts, such as proximity to the scene in time and place, and the nature of the accident
 There is no reason to exclude bystanders on the basis that they are not related to the victim
 The relationship between brothers is not so close and intimate as to give rise to that very special bond
of affection which would make his shock-induced psychiatric illness reasonably foreseeable by the
defendant, unless there is evidence to show the contrary
o The proximity of such persons to the accident – in time and space
 Proximity to the accident must be close both in time and space
 It is reasonably foreseeable that injury by shock can be caused to a plaintiff, not only through the
sight or hearing of the event, but of its immediate aftermath
 Only two of the plaintiffs at bar were at the grounds
 Subsequent identification can be regarded as part of the “immediate aftermath”, but Alcock was the
earliest of identifications at 8 hours after the accident – hardly immediate aftermath
o The means by which the shock has been caused
 Lord Wilberforce concluded that shock must come through sight or hearing of the event or its
immediate aftermath but specifically left open whether some equivalent or sight or hearing (i.e. TV)
would suffice
 It is reasonably foreseeable that parents, friends and family members would be watching the live
broadcast of the events, however, due to TV ethics, there would not be pictures shown of
recognizable individuals suffering – if there was, it would constitute a “novus actus” and break the
chain of causation between the chief constable and the illness suffered
 Although the TV pictures certainly gave rise to feelings of the deepest anxiety and distress, in the
circumstances of this case, the simultaneous broadcast of what occurred cannot be equated with the
“sight or hearing of the event or its immediate aftermath”
 So everyone who was not at the grounds was immediately cut out (a numbers problem)
 However, simultaneous broadcasts of a disaster cannot in all cases be ruled out
Ratio  Because “shock” in its nature is capable of affecting a wide range of persons, there is a real need to limit the extent of
admissible claims – three elements should be considered
o The class of persons whose claims should be recognized
 The plaintiff must have close ties of love and affection with the victim – such ties may be presumed
in some cases but must otherwise be established by evidence
o The proximity of such persons to the accident – in time and space
 The plaintiff must have been present at the accident or its immediate aftermath
o The means by which the shock has been caused
 The psychiatric injury must have been caused by direct perception of the accident or its immediate
aftermath and not upon hearing about it from someone else
Notes  Heavily influenced by the floodgates argument
 The problem with this judgment is that it was done after a very abnormal event
 McLoughlin v. O’Brian – cited in the case
o Has a partner and kids – on Saturday’s they go out and give the mom time to herself – she’s at home – little
known to her, there is a sad and tragic accident and her family is driven into by a large truck – kills one of the
kids – taken to hospital – going about oblivious to this – at least 2 miles away from the accident – at least 2
hours later that she is told that there has been an accident – she immediately rushes off to the hospital – she is a
changed person – she doesn’t relate to people in the way she used to – her relationship with her husband is
changed – an action is brought by everyone against the truck driver (who admitted negligence) – responsible
for the deaths and the injuries of the people in the car – she was not at the scene of the accident or anywhere
nearby, she only heard about it later – he shouldn’t owe her damages for her psychiatric harm (no physical
injury or risk of physical injury) – Wilberforce says ‘nervous shock’ is in a category of its own – we have
special rules, we don’t apply the Anns test – you had to have an immediate and primary perception of the
accident (had to be there and be yourself a potential target of injury or have experienced it directly) – the Court
said she had mere grief
 Hutch: Is it reasonably foreseeable that she might suffer psychological condition from the loss of
their child? OBVIOUSLY!
o The Court said she passed the class (mother), proximity (was at the hospital in the immediate aftermath), and
the means tests
  Hutch: The class of persons is ridiculous – isn’t it sufficient that people are suffering from a psychological condition as
evidence to show that they were in the class?
o And how are brothers not in a close enough relationship?
o They are just trying to cut it down so that no one can recover
 This decision created outrage in Liverpool
o Hutch says the only reason McLoughlin recovered was because there was only 1 of her
o Also, it is important to look at who the defendants were – they were the police!

White v. Chief Constable of South Yorkshire Police [1999]

Facts The plaintiffs were police officers (first responders) who had suffered psychiatric injury as a result of tending to the victims
at the Hillsborough soccer disaster that had occasioned the claims in Alcock.
Issue(s) Should liability be extended for psychiatric injury to “rescuers” who give assistance at or after some disaster without coming
within the range of foreseeable physical injury?
Decision No liability
Reasons Lord Hoffmann (majority)
 In Alcock, it was decided that liability for psychiatric injury should be restricted by “control mechanisms”
o These control mechanisms have been criticized as drawing distinctions which the ordinary man would find
hard to understand
o A mother who suffers psychiatric injury after finding her child’s mangled body in a mortuary “might wonder
why the law rules her child’s blood too dry to found an action”
 There are two opposing views
o If one starts from the proposition that in principle, the law of torts is there to give legal force to an Aristotelian
system of corrective justice, then there is obviously no valid distinction to be drawn between physical and
psychiatric injury
o If one starts from the imperfect reality of the way the law of torts actually works, in which the vast majority of
cases of injury and disability, both physical and psychiatric, go uncompensated, a uniform refusal to provide
compensation for psychiatric injury adds little to the existing stock of anomaly in the law of torts and at least
provides a rule which is easy to understand and cheap to administer
 Should liability be extended for psychiatric injury to “rescuers” who give assistance at or after some disaster without
coming within the range of foreseeable physical injury?
o Such an extension would be unacceptable to the ordinary person because it would offend against his notions of
distributive justice that policemen should have the right to compensation for psychiatric injury out of public
funds while the bereaved relatives are sent away with nothing
o In considering whether liability for psychiatric injury should be extended to such a class, I think it is legitimate
to consider the fact that, in the nature of things, many of its members will be from occupations in which they
are trained and required to run such risks, and which provide for appropriate benefits if they should suffer such
injuries
 It seems to me that in this area of the law, the search for principle was called off in Alcock
o No one can pretend that the existing law, which your Lordships have to accept, is founded upon principle
o Once the law has taken a wrong turning or otherwise fallen into an unsatisfactory internal state in relation to a
particular case of action, incrementalism cannot provide the answer
o Consequently, your Lordships are now engaged, not in the bold development of principle, but in a practical
attempt, under adverse conditions, to preserve the general perception of the law as system of rules which is fair
between one citizen and another
Lord Goff (dissent)
 Tort liability is concerned not only with compensating plaintiffs, but with awarding such compensation against a
defendant who is responsible in law for the plaintiff’s injury
 It may well be that one plaintiff will succeed on the basis that he can establish such responsibility, whereas another
plaintiff who has suffered the same injury will not succeed because he is unable to do so
 In such a case, the first plaintiff will be “better off” than the second, but it does not follow that the result is unjust or that
an artificial barrier should be erected to prevent those in the position of the first plaintiff from succeeding in their claims
 The true requirement is that the claim of each plaintiff should be judged by reference to the same legal principles
Ratio  Such an extension would be unacceptable to the ordinary person because it would offend against his notions of
distributive justice that policemen should have the right to compensation for psychiatric injury out of public funds while
the bereaved relatives are sent away with nothing
Notes  If you apply the plaintiffs in this case, to the test from Alcock – they may not have been in a special relationship with the
victims, but they were primary victims in the sense that they were there first-hand
 We also want to encourage people to rescue
 But, the main thing driving this judgment is: how do you justify allowing police to recover (who were the people
responsible for the disaster) after you have already denied recovery to the families of the victims who died
 3 of the judges try to bounce around the fact that these people, on the principles, should recover and make stuff up to
support their positions
o Hoffman is honest – he says, on the principles, they should recover but we have backed ourselves into a
problem in Alcock and essentially, two wrongs make a right

Tame v. New South Wales; Annetts v. Australian Stations Pty [2002] Australia

Facts The plaintiffs were the parents of a 16-year-old man who had gone to work for the defendant as a jackeroo in the defendant’s
cattle station. Contrary to assurances previously given to the plaintiffs, the defendant sent the son to work alone on a remote
property, where he went missing, He was found several months later dead of dehydration and exhaustion. The psychiatric
harm suffered by the parents during the lengthy search for their son was not induced by sudden shock or by direct perception
of a disastrous event or its immediate aftermath.
Issue(s) Can there be recovery for psychiatric harm that is the result of an event that is agonizingly protracted and not sudden?
Decision Yes
Reasons Gleeson CJ
 The process by which the plaintiffs became aware of their son’s disappearance, and then his death, was agonizingly
protracted, rather than sudden BUT it does not make sense to have such a rigid distinction between psychiatric injury
suffered by parents in those circumstances, and similar injury suffered by parents who see their son being run down by a
motor car
 There was a relationship between the plaintiffs and the defendant, in combination with reasonable foreseeability of
harm, to give rise to a duty of care
o The plaintiffs only agreed to permit their son to go to work for the defendant after having made inquiries of the
defendant as to the arrangements that would be made for his safety, and in particular, after being assured that
he would be under constant supervision
o Thus, there was a relationship between the plaintiffs and the defendant of such a nature that it was reasonable
to require the respondent to have in contemplation the kind of injury to the applicants that they suffered
 Even though there was no sudden sensory perception, the events were clearly likely to result in mental anguish of a kind
that could give rise to a recognized psychiatric illness
Gummow and Kirby JJ
 The requirements of “sudden shock” and “direct perception” of a distressing phenomenon or its “immediate aftermath”
have operated in an arbitrary and capricious manner
o Emergence of a coherent body of law is impeded, not assisted, by such a fixed system of categories
o The term nervous shock is apt to mislead – individuals may sustain recognizable psychiatric illness without
any particular sudden shock
o Direct perception of a distressing phenomenon or its immediate aftermath is what precluded recovery in
Alcock by plaintiffs who watched live television footage where their loved ones were crushed to death, or who
heard of the events from friends or radio reports and only later saw recorded footage
 The justification of the postulated control mechanisms lies in a perceived distinction between psychiatric and physical
harm based on 4 reasons:
o That psychiatric harm is less objectively observable than physical injury and is therefore, more likely to be
trivial or fabricated and is more captive to shifting medical theories and conflicting expert evidence
o That litigation in respect of purely psychiatric harm is likely to operate as an unconscious disincentive to
rehabilitation
o That permitting full recovery for purely psychiatric harm risks indeterminate liability and greatly increases the
class of persons who may recover
o That liability for pure psychiatric harm may impose an unreasonable or disproportionate burden on defendants
 However, the concerns underlying these reasons apply to physical injury as well, and many of them recede if full force
is given to the distinction between emotional distress and a recognizable psychiatric illness
 The law of negligence provides its own limiting device – the plaintiff must establish fault, causation, lack of remoteness
of damages, etc.
o These cases should be analyzed with reference to these principles and not through an absolute denial of duty
Ratio  Individuals may sustain recognizable psychiatric illness without experiencing shock
 Cases of protracted suffering as opposed to “sudden shock” may raise difficult issues of causation and remoteness of
damages
o These difficulties should be dealt with reference to these principles and not through an absolute denial of
liability
 The plaintiff’s physical and temporal proximity to the accident or its aftermath, or the means by which the plaintiff
learns of it, should be irrelevant
 A rule that renders liability on geographic and temporal distance of the plaintiff from the distressing phenomenon is apt
to produce arbitrary outcomes and is also disjointed from the realities of modern telecommunications
Notes

Mustapha v. Culligan of Canada Ltd. [2008] SCC

Facts Mustapha was a loyal customer of Culligan’s for 15 years (got into the purified drinking water game early – Hutch thinks
this is a relevant fact). In the course of replacing an empty bottle of drinking water with a full one, Mustapha saw a dead fly
and part of another dead fly in the unopened replacement bottle. Obsessed with the event and its “revolting implications” for
the health of his family, he developed a major depressive disorder, phobia and anxiety. He sued Culligan, the supplier of the
bottle for psychiatric injury. The trial judge awarded him general and special damages, as well as damages for loss of
business, but the Court of Appeal overturned the judgment on the basis that the injury was not reasonably foreseeable and
hence, did not give rise to a cause of action.
Issue(s) Can the plaintiff recover for psychiatric harm?
Decision No – damages too remote to allow recovery
Reasons McLachlin CJC
 Psychiatric harm is not a category of its own
o Just use the regular negligence test
 A successful action in negligence requires that the plaintiff demonstrate:
o That the defendant owned him a duty of care
o That the defendant’s behavior breached the standard of care
o That the plaintiff sustained damages
o That the damages were caused, in fact (causation) and in law (remoteness) by the defendant’s breach
 Did the defendant owe him a duty of care? YES
o It has long been established that the manufacturer of a consumable good owes a duty of care to the ultimate
consumer of that good (Donoghue v. Stevenson)
o It follows that Culligan owed Mustapha a DOC in the supplying of bottled water to him
 Did the defendant’s behavior breach the standard of care? YES
o Conduct is negligent if it creates an unreasonable risk of harm
o The defendant breached the standard of care by providing the plaintiff with contaminated water
o They were selling it as purified water – clearly in trouble
 Did the plaintiff sustain damage? YES
o Generally, a plaintiff who suffers personal injury will be found to have suffered damage – the damage for the
purposes of this inquiry includes psychological injury
o Nothing will be gained by treating physical and psychiatric injury as different “kinds” of personal injury, so as
to require the application of different tests in law
o However, psychological disturbance that rises to the level of personal injury must be distinguished from
psychological upset
 Personal injury at law connotes serious trauma or illness
o The trial judge found, based on medical evidence, that Mustapha’s psychiatric illness (major depressive
disorder with associated phobia and anxiety) was debilitating and had a significant impact on his life, thus
qualifying as a person injury at law
o It follows that Mustapha has established that he sustained damage
 Were the plaintiff’s damages caused by the defendant’s breach? In fact, YES but in law, NO
o Causation – the trial judge found that the defendant’s breach of its duty of care did cause Mustapha’s
psychiatric injury in fact
 The remaining question is whether that breach also caused the plaintiff’s damages in law or whether
it is too remote to warrant recovery
 o Remoteness concerns whether the harm is too unrelated to the wrongful conduct to hold the defendant fairly
liable
 The principle set out in the Wagon Mound (No. 1) is that “it is the foresight of the reasonable man
which alone can determine responsibility”
 The test is whether the personal injury was foreseeable by the standard of a reasonable person of
“ordinary fortitude”
 The law of tort imposes an obligation to compensate for any harm done on the basis of
reasonable foresight
o Unusual or extreme reactions to events caused by negligence are imaginable but
not reasonably foreseeable
o To say this is not to marginalize or penalize those particularly vulnerable to mental
injury – the law of negligence seeks to impose a result that is fair to both plaintiffs
and defendants, that is socially useful, i.e. reasonable foreseeability
o This is not to be confused with the “thin-skull” principle, where the negligent act
inflicted more damage than expected – to get to the thin skull rule, you have to
have a foreseeable injury, but in this case, there was no foreseeable injury, on the
standard of a person of ordinary fortitude
 If the evidence demonstrates that the defendant knew that the plaintiff was of less than
ordinary fortitude, the plaintiff’s injury may have been reasonably foreseeable to the
defendant
o There was no evidence to support a finding that Culligan knew of Mustapha’s
particular sensibilities
 In sum, in order to show that the damage suffered was not too remote to be viewed as legally caused
by Culligan’s negligence, Mustapha must show that it was foreseeable that a person of ordinary
fortitude would suffer serious injury from seeing the flies in the bottle of water he was about to install
 There is no evidence of this, so the claim must fail on the basis of remoteness of damages
Ratio  In order to make a successful claim of recovery for psychiatric harm, you must prove all of the necessary elements of
any negligence claim – damage will be seen as too remote if the breach would not have resulted in psychiatric harm to a
reasonable person
 If the defendant knows that the plaintiff has a particular vulnerability to psychiatric harm before the breach occurs, then
the psychiatric harm will likely be reasonably foreseeable
Notes  The Court affirms that we don’t have separate rules for nervous shock and psychiatric harm, we apply with the Anns test
o But she introduces an element of the remoteness standard for psychiatric harm which is problematic
 Hutch does not this would be stretched to cases with physical injuries
o Are we not supposed to take care of the vulnerable ones? If you react in the way that a normal person would
do, you’re good to go but if you are susceptible then you’re a hostage to fortune
o You’re carrying a penalty for being vulnerable
 Why do you have to be fair to the defendant in this case?
o He bought purified water – that is already an indication that he is neurotic and providing him with
contaminated water played into that neurosis
o He did nothing wrong, but we have already established that Culligan was negligent, he owed a duty of care, he
caused real damages, etc. – why should we deny these people just because they are vulnerable? This is not fair
 He is in a better position than Donoghue because he has a contract (no middle person)
o In contract, he would have gotten the money back for the water bottle
 In contrast to Donoghue, he did not actually drink the water and he did not have any physical injuries
o It was also a clear bottle – Donoghue didn’t have a chance to look into it
o Would there have been a difference if he actually drank it and THEN saw the fly?
 Probably not – other than the fact that many people’s reactions would change in this circumstance
(has an effect on the reasonable person test)
o But also, Donoghue’s injuries were temporary – Mustapha’s injuries were arguably way worse – he lost his
business, suffered severe psychiatric decline, etc.
 But still, no recovery for him
 Also, Culligan was in a better position to carry the loss
o Nothing Mustapha could have done better
 It is also arguable that Culligan knew of Mustapha’s specific vulnerabilities – he ordered purified water when this was
not yet the norm to do so, he was clearly a neurotic person for ordering this type of water
 Classic concurrent liability case – he had a contract with Culligan – this did not prevent him from bringing a tort action
 o But he lost in contract too because of Hadley v. Baxendale (reasonable foreseeability of damages very similar
to tort)

Wrongful Life
 Court gets themselves in difficulty
 Dobson
o Although it is driven in part by the fact that it was the mother who was the defendant, it does establish a
pretty clear rule about tort responsibility and injuries to babies not yet born
o A fetus has tort rights which materialize upon birth for injuries sustained in the womb caused by negligent
defendants
o If the fetus never gets born, the fetus does not have a claim
o Mother has claim for injuries to herself (Hutch says: of course, the fetus is herself)
 Defendants in these cases are doctors
o Don’t involve the doctor causing injuries
o If they do, they are back in the Dobson category
o They are about a negligent doctor, but the negligence does not injure the child
o They are allowing the child to be born, but not necessarily with injuries
o Not a Donoghue v. Stevenson type case – claims being made are not on physical injury but are made on pure
economic loss
 Courts don’t like to award damages for pure economic loss
 Norsk: they have to be in an extremely close relationship – i.e. joint venture
 Winnipeg: threat of physical injury so we want to encourage people to invest in safety
 Neither of these apply very well to this case – message is courts are iffy and reluctant to give
damages for pure economic loss
 Kids have brought claims saying that they should never have been born
 Parents bring claims for bringing up the child
o It is an expensive business – hundreds of thousands
 If you’re a doctor who is in the business of steralizing women or giving vasectomy to men, it is hard to think that a
failure to do that would not result in pregnancy
o Not as if it is a secondary aspect of what you’re doing
o It is the whole point of why they’re going for the procedure
o So, why aren’t they held liable? Why shouldn’t they have to pay for the cost of bringing up the child?
 Not going to have indeterminate effects because it’s only going to be to the patient, the child and the other parent
 It is kind of a half-way point between physical injury and pure economic loss
o You can’t put people back in the same situation by giving them money
 Claims can involve babies that are:
o Healthy
o Disabled
 Claims can be made by three potential people:
o The child (MacKay – no recovery)
o The person who was affected directly by the doctor’s negligence (could be the man or woman)
o The other partner
 All of these cases are about a partner who is known at the time
o Spectre of indeterminate liability could be there if there is a situation where a man for example gets a
vasectomy and does not have a partner – has sex with multiple other people that we don’t know about at the
time (issues for foreseeability and proximity)

MacKay v. Essex Area Health Authority [1982] UK

Facts The infant plaintiff was born handicapped as a result of her mother’s contracting German measles while the infant was in
utero. The defendants were negligent in failing to diagnose the disease. Had the mother been properly informed, she would
have, so she claimed, aborted the fetus. The infant claimed damages against the defendant on the ground that their failure to
diagnose the disease was in breach of the duty owed by them to her and resulted in her injury, which was to be born.
Issue(s)  Do doctors owe a DOC to born alive children for injuries they received naturally in utero?
Decision No DOC owed – no reasonable cause of action
Reasons Stephenson LJ
 The authority’s hospital laboratory and the doctor looking after the mother during her pregnancy undoubtedly owed the
child a duty not to injure it
o But this child has not been injured by either defendant, but by the rubella which has infected the mother
without fault on anybody’s part
 The only right on which the child can rely as having been infringed is a right not to be born deformed or disabled, which
means, for a child deformed or disabled before birth by nature or disease, a right to be aborted
o The child’s claim against the defendants is a claim that they were negligent in allowing her, injured as she was
in the womb, to be born at all, a claim for “wrongful entry into life” or “wrongful life”
 The defendants must be assumed to have been careless. The child suffers from serious disabilities. If the defendants had
not been careless, the child would not be suffering now because it would not be alive. Why should the defendants not
pay the child for its suffering?
o The answer lies in the implications and consequences of holding that they should
o To impose such a duty towards the child would, in my opinion, make a further inroad on the sanctity of human
life which would be contrary to public policy – it would mean regarding the life of a handicapped child as not
only less valuable than the life of a normal child, but so much less valuable that it was not worth preserving
o Potential for disabled children suing mothers for not aborting them (floodgates argument)
o How do you quantify damages? It would be nearly impossible to evaluate damages by comparing the value of
non-existence with existence in a disabled state
 Thus, neither defendant was under any duty to the child to give the child’s mother an opportunity to terminate the
child’s life
 How could there be a duty to take away life?
o The Court discusses possibilities where the life would be so “certainly awful and intolerable” but these were
not present on the facts of the case
Ratio  Although a doctor may owe a DOC to a mother to advise her of an infection and of the advisability or desirability of an
abortion, they are not under a legal obligation to a fetus to terminate its life
o Such a claim for ‘wrongful life’ would be contrary to public policy because it would violate the sanctity of
human life, and it would be nearly impossible to evaluate damages by comparing the value of non-existence
with existence in a disabled state
Notes  Would have been different if the doctor did some sort of surgery negligently that resulted in the baby being born
disabled
 Mother says: she was deprived of the chance to abort the pregnancy
 Valuing the termination of pregnancy would be very hard to quantify
 Hutch thinks you can quantify non-existence
o The pain and suffering from the disabilities
o He does not think that it is an insurmountable barrier like the court said it was
 Why wouldn’t we give something to the child to make their life a little more bearable than it might otherwise be?
o This is a negligent doctor
o The case says they get to walk away
o Sure, there are conceptual difficulties, but there is a negligent defendant and a blameless plaintiff
o In these difficult situations, why don’t we give the benefit of the doubt to the plaintiff
o Why can the doctor walk away from this having been negligent

Paxton v. Ramji [2008] Ontario Court of Appeal

Facts The acne drug, Accutane, is a teratogenic drug that carries the risk of causing fetal malformation. Dr. Shaffiq Ramji,
prescribed Accutane to Dawn Paxton, the mother of the plaintiff child, Jaime Paxton, on the understanding that the mother
would not become pregnant while taking the drug. The doctor’s understanding was based on the fact that the plaintiff’s father
had had a vasectomy 41⁄2 years earlier that had been successful up to that time. Unfortunately, the vasectomy failed just
when the Accutane was prescribed, and the plaintiff was conceived. She was born with considerable damage caused by the
Accutane and she sued the defendant for negligence in prescribing the Accutane to her mother. Dr. Ramji had taken a
continuing education course for the prescription of Accutane. He knew that he should have implemented the pregnancy
protection program (PPP) before prescribing the drug to a woman of childbearing potential, in order to ensure that they
 would not become pregnant while taking the medication. He did not follow the PPP exactly (he did not advise her not to have
sexual relations) though, knowing about the vasectomy, he only advised her of the necessity that she not become pregnant
and provided her with pregnancy tests before allowing her to commence the drug.
Issue(s)  Does a doctor owe a DOC to a future child of the doctor’s patient?
Decision No DOC owed
Reasons Feldman JA
 Courts in most foreign common-law jurisdictions have refuse to recognize claims for wrongful life
o In the three US states where wrongful life actions have been allowed, courts have generally restricted liability
to special damages, such as for extraordinary medical expenses, and have refused to award general damages
for pain and suffering because of the impossibility of comparing existence with non-existence
 Wrongful life claims are not to be confused with claims labeled wrongful birth
o Actions for wrongful birth are brought by the parents (rather than by the child) who claim that their child
would not have been conceived or born but for the doctor’s negligence. In such claims, the parents seek
damages associated with the birth and care of a child
 However, by asking whether or not the claim before the court should be characterized as one for wrongful life, Canadian
courts have asked the wrong question
o In order to determine whether Ramji can be liable in negligence to Jaime Paxton, the question confronting the
court is whether he owed her a duty of care
 Is this case analogous to a recognized duty of care?
o The court in Lacroix observed that cases involving a claim by a child born with abnormalities generally fall
within one of two categories:
 Cases in which the abnormalities have been caused by the wrongful act or omission of another
 The doctor would be liable for causing direct damage
 Cases in which, but for the wrongful act or omission, the child would not have been born at all
 The doctor would not be liable because this is an action for wrongful life
o The case at hand cannot be viewed as a claim under either category
 There is no settled jurisprudence in Canada on the question whether a doctor can be in a proximate
relationship with a future child who was not yet conceived or born at the time of the doctor’s
impugned conduct
o The relationship between a doctor and a future child of a patient is also not analogous to the relationship
between
 A mother and her fetus (Dobson)
 A driver of a motor vehicle and the woman’s future child
o Thus, the proposed DOC does not fall within an established category of relationship giving rise to a DOC, and
the court must proceed to the two-stage Anns test
 Stage 1: Prima facie DOC
o Reasonable foreseeability
 The question of the reasonable foreseeability of possible harm to a future child by actions or
omissions of the mother’s doctor in prescribing teratogenic medications to the mother is, in my view,
not a difficult one
 The question is less simple if foreseeability is approached not from the point of view of foreseeability
of harm, but rather the foreseeability of conception
 One could argue that harm to a future child is not foreseeable if the future child is not
foreseeable, for example, if the people involved are using reliable birth control. This
however, confused the DOC with the SOC
 As long as there is the potential for a future child to be born who may be affected by a teratogenic
drug being prescribed to a woman who is of childbearing capacity, then at the first stage of the Anns
test, the harm to that future child is reasonably foreseeable
o Proximity
 The court must determine whether the doctor and the future child are in a “close and direct
relationship” of proximity that makes it fair and just that the doctor should owe a duty of care to the
future child
 The SCC recognized the potential for conflicting duties as an important policy consideration in Syl
Apps
 If a doctor owes a DOC to a future child of a female patient, the doctor could be put in an
impossible conflict of interest between the best interests of the future child and the best
interests of the patient in deciding whether to prescribe a teratogenic drug or to give the
 patient the opportunity to choose to take such a drug
 This conflict of duties could prompt doctors to offer treatment to some female patients in a
way that might deprive them of their autonomy and freedom of informed choice in their
medical care
 Another consideration is that the relationship must be both “close and direct” for legal proximity to
exist
 The doctor’s relationship with a future child is inherently indirect, mediated through the
patient
 The doctor can do no more than enlist the agreement of the woman that she will take the
necessary precautions to protect a future child from harm
 Thus, no prima facie DOC arises
 Stage 2: Residual policy considerations
o Not necessary to continue with stage two, but assuming there is a prima facie duty, residual policy
considerations at this stage would negative the proposed duty
o Recognizing a duty of care by a doctor to a future child of a female patient would:
 Affect the doctor’s existing legal obligation, which is to the patient
 Interfere with the exercise of a woman’s right, in consultation with her doctor, to choose to abort a
fetus
 Conflict with the doctor’s obligation to act in the best interests of the mother, consistent with
society’s recognition of the need to preserve a woman’s “bodily integrity, privacy and autonomy
rights” (Dobson)
 Unfortunately, whenever the court concludes that there is no duty of care, a party who has been affected by another’s
conduct will not be able to recover in tort for the loss – these costs are only somewhat mitigated by the claim that
parents can make against the doctor – ALSO, without a DOC, it is hard to ensure that doctors will maintain the
appropriate SOC when prescribing these types of drugs to women of child bearing age
o It is for the legislature to consider and assess all of the policy issues and to determine whether and in what
circumstances a remedy should be available to a child born with disabilities as a result of the conduct of the
mother’s doctor, as well as the nature and extent of any remedy
Ratio  In order to determine whether a doctor can be found liable for damages to a future child of their patient, the proper test is
the Anns test (DOC)
Notes  Not a claim for wrongful life because the doctor did cause the disabilities
 Two actions brought in this case
o Mother – failed on SOC
 What if there was contributory negligence instead of no liability? He gave her advice and she chose
not to go along with it
o Child – failed on DOC
 The prescribing of the Accutane was done when the baby was not even conceived yet – not even yet a
fetus
 In this case, the doctor by prescribing the Accutane under certain conditions, had been the cause of her disabilities
o The doctor was the source of her disabilities
o We don’t go down the MacKay road
 Hutch doesn’t understand why the competing duties was so prominent in the proximity discussion
o Tons of people owe conflicting duties
 The problem with this case, is they would be way better off saying there was DOC owed but in this case, no negligence
 Hutch thinks the Canadian courts would adopt the decisions in McFarlane, Parkinson and Rees
o Rees maybe would have had a different outcome – the doctor presumably was told about the blindness, so they
had special knowledge
 McLachlin said DOC is all about fairness and justice
o Are these result just?
 Female judge (is there any relevance to that considering the topic?)

Kealey v. Berezowski [1996] Ontario Supreme Court

Facts The defendant doctor negligently performed a tubal ligation, with the result that the plaintiff became pregnant and gave birth
to a normal healthy child.
Issue(s) Can damages be awarded for a wrongful pregnancy of a healthy child?
Decision General damages awarded for pregnancy costs
Reasons Lax J
 Three principal approaches which courts have used to deal with damages consequent upon a wrongful pregnancy.
o Total recovery approach.
 Recovery for all reasonably foreseeable damages based on ordinary principles of recovery in tort law,
including pecuniary and non-pecuniary costs associated with the birth as well as for the economic
costs of raising the child.
 The strict application of tort principles to wrongful pregnancy cases is problematic.
 It treats the birth of a healthy child as an injury.
 If the assessment of damages associated with a child’s birth is considered on the basis that damages
are awarded to compensate for an injury, not in the abstract, but with reference to the purpose of the
activity, in this case, the sterilization, these facts that the parents in this case welcomed the unplanned
pregnancy may very well matter.
o The “offset/benefits” approach.
 Recovery is permitted for birth costs as well as the consequent economic costs of child-rearing, but
the recoverable damages are offset by the benefits which the birth and rearing of a child normally
brings to its parents.
 This approach raises the unpalatable prospect that the “beneficial” child could completely offset the
damages awarded to his or her parents thereby negating the award. The greater recovery would go to
parents who not only did not want their children but who were lacking in affection for the child and
able to demonstrate that the child was of no value. This can’t be right.
o The “limited damages” approach.
 Recovery is permitted for the unplanned pregnancy but not for the unplanned child. Damages
consequent on the pregnancy and birth of the child are recoverable but no damages are awarded for
the child-rearing costs, denied for reasons of public policy, causation or both.
 This is the approach of this court.
 The particular damage sustained in this case is an unplanned and undesired pregnancy.
o There is no damage caused by the defendant’s negligence which prevents Ashley’s parents from fulfilling their
responsibilities to her or compromises in any way the relationship of mutual support and dependency which, as
a matter of law, arose on her birth.
 The fact that a woman opts not to abort, does not bar her from recovering in tort
 Life is about choices and not everything in life is predictable or planned. To transform a mistake, measured in
millimeters, into a monetary award in this case, cannot be right. Nor, in my view, can every mistake be evaluated by
rules designed for different reasons. The Kealey’s are willing and able to assume and have assumed their responsibilities
as parents to their third daughter as they should. Ashley is ensured a happy and successful childhood in a family which
has welcomed her, loves her and can afford to raise her. The responsibilities should remain where they are.
o Accordingly, the child-rearing costs in this case are not a compensable loss.
 This case does not finally determine whether, in all cases, damages for child-rearing costs are or are not recoverable.
This is not a case:
o Where a sterilization was sought to protect a mother’s health and the mother became ill, impairing her ability
to care for the child.
o Where a sterilization was sought to avoid the transmission of a hereditary condition and the child was born
diseased.
o Of economic necessity, imposing unreasonable financial burdens on an impoverished family.
o Where a physician’s failure to diagnose a pregnancy following a failed sterilization interfered with a woman’s
decision to terminate the pregnancy in a timely manner.
 General damages were awarded for the costs of the unplanned pregnancy.
Ratio  In this case, the court took the “limited damages” approach for determining damages for a wrongful pregnancy, but this
should not be taken as a general principle, determinative for all cases
o Costs of bringing up a child are not awarded
 The process of determining damages for a wrongful pregnancy should be done on a case-by-case basis to allow for the
development of sound rules appropriate to the varied circumstances which can arise in wrongful pregnancy cases
Notes  Hutch thinks it is a factor that the parents in this case loved the baby just as much as the others
o They didn’t want it but when it came, they loved it
o Even though they said in their judgment that the decision should not only ride on
 Also, important that it is a healthy child
o Not facing any great challenges
  Do we hold it against her that she chose not to terminate the pregnancy?
o The argument would be if they chose not to terminate, they forego their right to sue
 Just because they can afford to bring up the kid and love the kid like their others, there is no reason to deny them
compensation
o If you think back to early on in the course, this is not what we say to any other victim of a tort
 The case does say that there are exceptions to the general rule
 The problem is we already made this decision
o They already chose that the child wasn’t worth it to them because they chose to get the procedure
o How can you argue that their love for the child offsets their damages?

McFarlane v. Tayside Health Board [2002] UK

Facts The plaintiffs who already had four children decided that they did not want any more. The husband underwent a vasectomy
and was informed that his sperm count was negative. He and his wife resumed intercourse without contraception. His wife
consequently became pregnant and gave birth to a daughter.
Issue(s) Can the parents recover for the wrongful pregnancy of their daughter?
Decision Recovery was allowed for the discomfort and the extra costs associated with the pregnancy, but not for the costs of
maintaining the child
Reasons Lord Slynn of Hadley
 This is a case of economic loss, and in such cases, a duty is found only when there is a closer link between the act and
the damage than foreseeability provides.
o The proximity test is of a higher threshold in these cases
Lord Steyn
 There are two way to view the case
o The perspective of corrective justice requires somebody who has harmed another without justification to
indemnify the other.
 Then the parents’ claim for the cost of bringing up Catherine should succeed.
o The perspective of distributive justice requires a focus on the just distribution of burdens and losses among
members of a society.
 The law of tort has no business to provide legal remedies consequent upon the birth of a healthy
child, which all of us regard as a valuable and good thing.
 The truth is that tort law is a mosaic in which the principles of corrective justice and distributive justice are interwoven.
o And in situations of uncertainty and difficulty a choice sometimes has to be made between the two approaches.
 In my view it is legitimate in the present case to take into account considerations of distributive justice.
o Tort law does not permit parents of a healthy unwanted child to claim the costs of bringing up the child from a
health authority or a doctor.
Lord Hope of Craighead
 The costs of rearing the child is a reasonably foreseeable consequence of the defender’s negligence.
o However, with cases of economic loss such as this, foreseeability is not the only criterion that must be
satisfied.
o There must be a relationship of proximity between the negligence and the loss which is said to have been
caused by it and the attachment of liability for the harm must be fair, just and reasonable.
 The costs to the pursuers of meeting their obligations to the child during her childhood are not recoverable as damages.
Lord Clyde
 Reasonableness includes a consideration of the proportionality between the wrongdoing and the loss suffered thereby.
 The expense of child rearing would be wholly disproportionate to the doctor’s culpability.
Lord Millett
 I am not persuaded by the reasoning of Lax J in Kealey v. Berezowski, where he appears to have held that the parents
sustain no loss if their ability to discharge their obligations to maintain the child is not impaired.
o Quite apart from the fact that their ability to discharge their obligations to their other children must be reduced,
the argument does not meet the way the parents put their claim.
o They do not claim that they have sustained loss by the impairment of their ability to discharge their existing
liabilities, but that they have sustained loss by the incurring of an additional liability.
 I am also not persuaded by the argument that the remedy is disproportionate to the wrong.
o It is common for the harm caused by a botched operation to be out of proportion to the seriousness of the
 operation or the condition of the patient which it was designed to alleviate.
 The law must take the birth of a healthy child as a blessing
o Society must regard the balances of losses and benefits as ultimately beneficial
o It is morally offensive to regard a baby as more trouble and expense than it is worth
 The reason for denying recovery for the costs of maintaining the child is found in the fact that the advantages and
disadvantages of parenthood are inextricably bound together.
o It would be subversive of the mores of society for parents to enjoy the advantages of parenthood while
transferring to others the responsibilities which it entails.
 However, the rejection of their claim to measure their loss by the consequences of Catherine’s conception and birth does
not lead to the conclusion that they have suffered none.
o They have lost the freedom to limit the size of their family. They have been denied an important aspect of their
personal autonomy. Their decision to have no more children is one the law should respect and protect.
o Thus, they are entitled to general damages to reflect the true nature of the wrong done to them.
Ratio  Parents of a healthy child who was born due to the negligence of another cannot recover the cost of maintenance of the
child, and only for the discomfort and the extra costs associated with the pregnancy
Notes  Award of damages for ‘wishes denied’
 Nothing for bringing up the child
 Father had a claim for hurt feelings
o Called solatium

Parkinson v. St James and Seacroft University Hospital NHS Trust [2002] UK

Facts A doctor at a hospital administered by the defendant negligently performed a sterilization procedure on the plaintiff.
Consequently, the plaintiff, who already had four children and did not want more, became pregnant. This was catastrophic
for her. She could not resume work or move with her family from their two-bedroom house to a larger accommodation, as
planned. Her husband could not cope with the prospective financial strain of a fifth child and left the family home three
months before the birth. The plaintiff was told that the child might be born with a disability but decided not to have the
pregnancy terminated. The child was born with the symptoms of autism. The plaintiff acknowledged that the disability was
not caused by the negligent sterilization. The plaintiff sued for the basic costs of the child’s maintenance. The lower court
held that the plaintiff could recover damages for the costs of providing for her son Scott's special needs and care relating to
his disability, but that she could not recover damages for the basic costs of his maintenance.
Issue(s)  Can the plaintiff recover damages for the costs of providing for her son’s special needs and care relating to his
disability?
 Can the plaintiff recover damages for the basic costs of his maintenance?
Decision Yes and no
Reasons Hale LJ
 Tort law protects one’s right to bodily integrity, to physical autonomy, and to not be subjected to bodily injury or harm,
by giving redress to the one who’s rights have been violated through another’s negligence.
o There are cases where the invasion of the right to bodily integrity has caused, not only pain, suffering and loss
of amenity (including freedom and autonomy), but also financial consequences, whether in the shape of loss of
earnings or the like, or out-of-pocket expenditure.
o There is an undisputed invasion of bodily integrity and personal autonomy caused by conception, pregnancy,
childbirth, and parenthood.
 How disabled does the child have to be for the parents to be able to make a claim?
o The Children Act provides a definition, “a child is disabled if he is blind, deaf or dumb or suffers from mental
disorder of any kind or is substantially and permanently handicapped by illness, injury or congenital deformity
or such other disability as may be prescribed.”
 When must the disability arise?
o The two serious contenders are conception and birth.
 The argument for conception is that this is when the major damage was caused, from which all else
flows. This was what the defendants undertook to prevent.
 The arguments for birth are that, although conception is when the losses start, it is not when they end
(the defendants also undertook to prevent pregnancy and childbirth), and it is only when the child is
born that the deemed benefits begin. And it is those deemed benefits which deny the claim in respect
of the normal child.
  It is not reasonable to expect any woman to mitigate her losses by having an abortion
 In considering a disabled child, he has the same worth as a non-disabled child, but in needing more care, he costs more.
o I conclude that any disability arising from genetic causes or foreseeable events during pregnancy (such as
rubella, spina bifida, or oxygen deprivation during pregnancy or childbirth) up until the child is born alive, and
which are not novus actus interveniens, will suffice to found a claim.
 In considering fathers
o If the object of the operation was to prevent that particular mother becoming pregnant, the proximity between
her and the defendant is as close as it can be.
o Even if the object of the operation (and later advice) was to render the father infertile, the proximity between
his partner and the defendant is quite close.
o If there is a sufficient relationship of proximity between the defendant and the father who not only has
but meets his parental responsibility to care for the child, then the father too should have a claim
Ratio  The extra costs involved in discharging the responsibility to care for a disabled child, who was born due to another’s
negligence, can be recovered
Notes o Disability was not caused by the doctor
o The sterilization did not cause the disability
o They gave her not the costs of bringing up the disabled child, but the extra costs associated with bringing up a disabled
child
o McFarlane says you don’t get damages for a healthy child
o You get the difference between a healthy and a disabled child
o Critics say this judgment is inconsistent
o They are showing some compassion but if they are not going to award damages for a healthy child then why
are you going to give them for a disabled child when the doctor had nothing to do with the injury
o Hutch doesn’t necessarily have a problem with the compassionate aspect of the judgment, but he thinks they
are going down a difficult road – how do you make distinctions between healthy and disabled children?
 Presumably there are benefits attached as well to these kids – so are they suggesting that they
somehow provide less benefits to their parents than healthy children? This is a dangerous road to go
down
o Most cases involve men making these decisions
o Hutch: venture to say that they probably did not spend much time bringing up children
o He thinks that the decision is skewed by the idea that women stay home and don’t go to work so in a sense,
they are catching a break anyway

Rees v. Darlington Memorial Hospital NHS Trust [2003] UK

Facts The plaintiff was a woman with a genetic condition that severely affected her sight. Feeling that her disability would make it
very difficult for her to bring up and take care of another child, she determined to undergo a sterilization procedure. The
defendant performed the procedure negligently. The plaintiff became pregnant and gave birth to a healthy child. The plaintiff
then sued for the costs of maintaining the child. The Court of Appeal found for the plaintiff stating that just as the extra costs
involved in discharging that responsibility toward a disabled child can be recovered (Parkinson), so too can the extra costs
involved in a disabled parent discharging that responsibility toward a healthy child. The defendants appealed to the House of
Lords.
Issue(s) Can the plaintiff recover for the costs of maintaining the child?
Decision No
Reasons  McFarlane teaches us that the costs of bringing up a healthy child does not sound in damages
o In this case, the child is healthy – so no damages
 Disability is a misfortune, and it is the mark of a civilized society that it should provide financial assistance to the
disabled
o The United Kingdom discharges this responsibility by payment of disability allowance – but this is the
responsibility of the state and is properly funded by general taxation
o It is not the responsibility of the private citizen whose conduct has neither caused nor contributed to the
disability
 The proper outcome in these cases is to award parents a modest conventional sum by way of general damages, not for
the birth of the child but for the loss of personal autonomy ‘wishes denied’
o In a straightforward case, damages should not exceed 5000 pounds – this case was unique so 15,000 pounds
 were awarded on the circumstances
Ratio  Disability is best dealt with by the government through general taxation – it is not the responsibility of private citizens
whose conduct has neither caused or contributed to the disability to provide compensation
 The proper outcome in these cases is to award parents a modest conventional sum by way of general damages, not for
the birth of the child but for the loss of personal autonomy
Notes  Like in McFarlane, a healthy child does not have a claim
o Wanted to remain consistent with this judgment
o Hutch doesn’t understand why the opposite decision in this case would have undermined the McFarlane
precedent
 But still awarded damages for ‘wishes denied’
o Hutch thought this added insult to injury
 Compassion went missing on this case

Informed Consent
 Three potential legal actions that can follow from a medical procedure
o Assault and battery: unconsented to interference
 Ex. If you consent to a doctor doing a minor exploratory procedure, and then they remove your
colon
o Negligence
 You consent to a procedure but due to the negligence of the doctor, you get injured
 White v. Turner
o Informed consent
 You have a procedure, the procedure is performed in a non-negligent way, but you suffer damage
 One of the risks of that operation materializes
 I was never told of the risk of that happening and if I was told, I would never have agreed to it
 The real charge of these issues is that they only arise after the fact
 A consent or waiver form will not by itself prevent a tort action
 There is a difference between being told or provided with information on risks, and
actually understanding or appreciating the risks
 Test:
 What is the duty on the doctor for disclosing information?
 What is the standard to be applied to the patient if they had been given the correct
information?
 Was there a causal connection between the failure to provide the information and the
injuries that occurred?
 People are entitled to make decisions about their bodies, and they are entitled to make bad
decisions – extreme examples are Jehovah’s Witnesses
 But doctors are going to need to make it very clear what the risks are and ensure that the
patient actually understands the risks (maybe through a waiver)
 In an emergency situation, a doctor does need to take some reasonable care to ensure that
the person would consent to certain procedures but there is some onus on the patient to
make it clear what their wishes are (i.e. have something in your wallet)
 Gets confusing when parents are making decisions on behalf of their children
 Difficult because we assume that parents have the best interests of their children in mind,
and if they are not able to make the decision, then who is able to? The kid is too young to
make the decision on their own
 But what if they are 15?
 What if the parents disagree?
 We are afraid to ask doctors and dentists whether they are experienced in certain procedures and
what their particular risk levels are
 These are not unreasonable things to ask but we are embarrassed to do it
 This is particularly true of minorities (who are either afraid of or incapable of asking for
clarification)
 Up to 1980, the standard was that doctors had to inform people, but they had to inform them of what doctor’s thought
people needed to know
 o This changed in Reibl v. Hughes
 Why have we restricted informed consent to doctor-patient relationships?
o What about the sale of a car?
o They are prepared to extend it to pharmaceutical products
 When it comes to deciding in these commercial situations, the standard is not objective (what
would the reasonable person do), it is a subjective test (what would you as the recipient do)
 Court has been more pro-consumer in this situation

Reibl v. Hughes [1980] SCC

Facts The plaintiff, then 44 years of age, underwent serious surgery on March 18, 1970 for the removal of an occlusion in the left
internal carotid artery, which had prevented more than a 15 percent flow of blood through the vessel. The operation was
competently performed by the defendant-respondent, a qualified neurosurgeon. However, during or immediately following
the surgery the plaintiff suffered a massive stroke which left him paralyzed on the right side of his body and also impotent.
The plaintiff had, of course, formally consented to the operation, but he alleges that his was not an “informed consent.” He
stated in his evidence that if he had been properly informed of the magnitude of the risk involved in the surgery, he would
have elected to forgo it, at least until his pension had vested and, further, he would have opted for a shorter normal life than a
longer one as a cripple because of the surgery. Although elective surgery was indicated for the condition from which the
plaintiff suffered, there was (as the trial judge found) no emergency in the sense that immediate surgical treatment was
imperative. The plaintiff sued for damages and recovered on this ground in both battery and negligence.
Issue(s) Was the defendant negligent in failing to disclose the attendant risks and liable for the injury the plaintiff suffered as a result
of the surgery?
Decision Yes
Reasons Laskin CJ
 The question of imposing liability for battery – Denied
o The tort of battery is an intentional one, consisting of an unprivileged and unconsented to invasion of one’s
bodily security
o There can be no action of battery where there has been consent to the very surgical procedure carried out upon
a patient but there has been a breach of the duty of disclosure of attendant risks.
 The relationship between surgeon and patient gives rise to a duty of the surgeon to make disclosure to the patient of
what I would call all material risks attending the surgery that is recommended.
o In obtaining the consent of a patient for the performance upon him of a surgical operation, a surgeon,
generally, should answer any specific questions posed by the patient as to the risks involved and should,
without being questioned, disclose to him the nature of the proposed operation, its gravity, any material risks
and any special or unusual risks attendant upon the performance of the operation.
o Material risk include risks that ordinarily need not be disclosed (as they are mere possibilities) but carry
serious consequences, such as paralysis or death.
 However, the scope of the duty of disclosure and whether or not it has been breached are matters
which must be decided in relation to the circumstances of each particular case.
o The materiality of non-disclosure of certain risks to an informed decision is a matter for the trier of fact.
 Medical evidence is relevant but should not control determination of the breach of the standard of
care.
 The question of causation and liability – Found against the defendant
o Two possible standards to determine whether the patient would have decided against the treatment had he been
informed of its risks
 Subjective view
 Whether, if informed, the particular patient would have forgone treatment.
 Objective view
 Whether the average prudent person in plaintiff’s position, informed of all material risks,
would have forgone treatment.
 The objective standard is preferable, since the subjective standard has a gross defect – It depends on
the plaintiff’s testimony as to his state of mind, thereby exposing the physician to the patient’s
hindsight and bitterness.
o It is the safer course on the issue of causation to consider objectively how far the balance in the risks of surgery
or no surgery is in favour of undergoing surgery.
 However, merely because medical evidence establishes the reasonableness of a recommended
 operation does not mean that a reasonable person in the patient’s position would necessarily agree to
it, if proper disclosure had been made of the risks attendant upon it, balanced by those against it.
 Further, since the test is based on the decision that a reasonable person in the patient’s position would have made, the
patient’s particular position must be based on reasonably grounds.
o Factors relevant to determining whether a reasonable person in the plaintiff’s position would have declined
surgery at that particular time:
 He was within about one and one-half years of earning pension benefits if he continued at his job;
 As a result of the defendant’s breach of the duty of disclosure, the plaintiff understood no more than
that he would be better off to have the operation than not to have it, and he was also under the
mistaken impression that the surgery would relieve his continuing headaches.
 There was no immediate emergency making the surgery imperative.
 There was a grave risk of a stroke or worse during or as a result of the operation, while the risk of a
stroke without it was in the future, with no precise time fixed or which could be fixed except as a
guess of three or more years ahead.
 Thus, a reasonable person in the plaintiff’s position would, on a balance of probabilities, have opted against the surgery
rather than undergoing it at the particular time.
Ratio  Doctors must inform their patients of all material risks before the patient can give informed consent. This includes a
discussion of any possible serious outcomes such as death or paralysis, even if they are very remote.
 The test to see if enough information has been given is to objectively ask: would a reasonable person in the plaintiff's
shoes decide to have the surgery or not if they were given all of the information? Is this different than the answer with
only the amount of information that was given?
Notes  He would have received his pension and there was no significant increase in risk in delaying the procedure until after he
received the pension
 Patients are allowed to make bad decisions – doctors don’t always know best
 Doctor must disclose all material risks
 Ask: would a reasonable patient, in the particular circumstances of the plaintiff, taking into account the reasonable
concerns, have opted for or rejected the procedure?

White et al v. Turner et al. [1981]

Reasons Linden J summarized the law resulting from Reibl v Hughes

 Canadian doctors are obligated to disclose to their patients “the nature of the proposed operation, its gravity, any
material risks and any special or unusual risks attendant upon the performance of the operation (Hopp v Lepp).
o Problems associated with inadequacy of information about risks are to be analyzed with negligence law theory,
rather than with the law of battery (Reibl v Hughes).
 The tort of battery is to be limited to cases involving a real lack of consent.
 The matter of disclosure of risks by a doctor may be viewed as not entirely unlike the manufacturers’ duty to warn
consumers about the dangerous properties of their products.
o Manufacturers have an obligation to warn consumers through a high degree of explicitness about the dangers
inherent in their products (Lambert et al v Lastoplex Chemicals).
 In analyzing the quality and quantity of the information given to a patient under negligence principles, the test to be
employed is no longer the professional medical standard, but the “reasonable patient standard” (Reibl v Hughes).
o In determining what a reasonable patient in the position of the plaintiff would consider to be “material risks” or
“special or unusual risks” about which he would want to receive information, the Court will hear expert
medical evidence on the question of what the risks inherent in a particular operation are, how serious these
risks are, how frequently these risks may arise, and what information medical practitioners usually transmit to
their patients in relation to these risks.
 The Court will also give due consideration to the evidence of the patient and his family as to his general situation, and
the information the patient would want to know in the circumstances.
 Weighing all of these factors, the Court will decide whether the information given to this patient in these circumstances
was sufficient.
 An objective test of causation is to be employed in assessing whether the patient would have consented to the operation
if he had been properly warned (Reibl v Hughes).
 In order to recover in negligence law, it must be established that the patient would have refused to undergo the surgery if
he had been told about all the relevant risks.
Notes  Also have to tell information about the non-operation
 There is still a basic threshold for the subjective test (you still have to be believed)

Hollis v. Dow Corning Corp [1995] SCC

Facts The defendant, Dow Corning Corporation (“Dow”), is a US manufacturer of “Silastic” silicone breast implants. The plaintiff,
Susan Hollis, had Silastic breast implants implanted in 1983, which ruptured in her body 17 months after. Ms. Hollis’ seven-
year surgical ordeal caused her great physical and psychological pain, residual scarring on her breasts, and a loss of past and
future income. Dow submits that it was not responsible for Ms. Hollis’ injuries because (1) the warning it gave Dr. Birch was
adequate and sufficient to satisfy its duty to Ms. Hollis, and (2) even if it did breach its duty to warn Ms. Hollis, this breach
was not the proximate cause of her injuries. BC Supreme Court, Bouck J: Awarded damages and costs against Dow to the
respondent, Susan Hollis, for the negligent manufacture of a Silastic breast implant that ruptured in her body approximately
17 months after it was implanted in 1983. BC Court of Appeal: Overturned Bouck J’s finding that Dow had negligently
manufactured the implant but dismissed the appeal on the ground that Dow had failed to warn Ms. Hollis adequately
concerning the risks of rupture.
Issue(s)  Whether a manufacturer of silicone breast implants may be held liable in tort to a patient who suffers injuries from an
unexpected rupture in the implants when the manufacturer has failed to give adequate warning to the patient or the
surgeon concerning the risks of the rupture
Decision Dow breached its duty to warn Dr. Birch concerning the risks of post-surgical rupture and because of this failure to warn, is
liable to Ms. Hollis for her injuries
Reasons La Forest J (majority)
 It is well established in Canadian law that a manufacturer of a product has a duty in tort to warn consumers of dangers
inherent in the use of its product of which it has knowledge or ought to have knowledge.
o All warnings must be reasonably communicated and must clearly describe any specific dangers that arise from
the ordinary use of the product.
 The courts in this country have long recognized that manufacturers of products that are ingested, consumed or otherwise
placed in the body, and thereby have a great capacity to cause injury to consumers, are subject to a correspondingly high
standard of care under the law of negligence.
o There are similarities between the manufacturer’s duty to warn and the doctrine of “informed consent” in
doctor-patient relationships.
o However, where the patient can question the doctor with respect to the risks and benefits of particular
procedures and where doctors can tailor their warnings to the needs and abilities of the individual patients, the
manufacturer-consumer relationship is characterized primarily by a lack of direct communication or dialogue.
 The “learned intermediary” rule
o The duty to warn is owed directly by the manufacturer to the ultimate consumer. However, in exceptional
circumstances, a manufacturer may satisfy its informational duty to the consumer by providing a warning to a
“learned intermediary”.
o The rule is applicable either where a product is highly technical in nature and is intended to be used only under
the supervision of experts, or where the nature of the product is such that the consumer will not realistically
receive a direct warning from the manufacturer before using the product.
o The manufacturer can only be said to have discharged its duty to the consumer when the intermediary’s
knowledge approximates that of the manufacturer.
 Application of the “learned intermediary” rule
o The “learned intermediary” rule is applicable and so the question is whether Dow fulfilled its duty to Ms.
Hollis by adequately warning Dr. Birch of the risk of post-surgical rupture of the implant
 There are two distinct causation issues.
o Whether Ms. Hollis would have elected to have the operation if she had been properly warned of the risk by
Dr. Birch.
 The test is a modified objective test in doctor-patient relationships, whether reasonable woman in the
patient’s particular circumstances would have consent to the surgery if she had been properly warned
of the risk (Reibl, Prowse JA).
 In the case at hand involving a manufacturer, the test should be a subjective test (Buchan, Robins
JA), whether the patient herself would have consented if she had been properly warned of the risk.
 It is highly desirable form a policy perspective to hold a manufacturer to a strict standard of
warning consumers of the dangers associated with using their products.
o Whether Dr. Birch would have warned Ms. Hollis if he had been properly warned by Dow of the risk.
  The ultimate duty of the manufacturer is to warn the plaintiff adequately. For practical reasons, the
law permits it to acquit itself of that duty by warning an informed intermediary. Having failed to
warn the intermediary, the manufacturer has failed in its duty to warn the plaintiff who ultimately
suffered injury by using the product, and it cannot raise as a defence that the intermediary could have
ignored this information.
 Ms. Hollis would not have opted for the surgery had she known all of the attendant risks. Dow breached its duty to warn
Dr. Birch concerning the risks of post-surgical rupture in the Silastic implant and because of this failure to warn is liable
to Ms. Hollis for her injuries.
Sopinka J (dissent)
 Disagrees with the majority on the analysis and application of the principles relating to causation.
 Agrees with the majority on the principles of duty to warn and the learned intermediary rule.
 The test for causation
o The subjective test fails to take into account the inherent unreliability of the plaintiff’s self-serving assertion.
 The plaintiff may be perfectly sincere in stating that in hindsight she believed that she would not have
consented to the operation. However, the trier of fact must discount its probity not only by reason of
its self-serving nature, but also by reason of the fact that it is likely to be colored by the trauma
occasioned by the failed procedure.
o The most reliable approach in determining what would in fact have occurred is to test the plaintiff’s assertion
by reference to objective evidence as to what a reasonable person would have done.
 Burden of proof for causation
o In order to establish liability, the plaintiff must show not only a breach of duty by the defendant, but also that
the breach in question was the cause of the plaintiff’s injury.
o In this case, the burden applies to require the plaintiff to show that her injuries would not have occurred but for
had Dow’s negligence in failing to warn Dr. Birch of any dangers inherent in the implants.
 Ms. Hollis must show that her doctor would have warned her of any dangers that had been brought to
his attention and that if warned she would have refused the operation.
o Absent this form of proof, it cannot be said with any degree of certainty that the failure of Dow to warn
physicians was the cause of the unfortunate injuries suffered by Ms. Hollis.
 Reverse burden in Cook v Lewis and Snell v Farrell
o The burden of proof is properly reversed where the defendant has somehow participated in destroying the
means of proving the case against it or where the defendant somehow controls the relevant evidence.
 Only within this limited sphere of cases is the plaintiff partially relieved of the burden of proving
causation.
Ratio  Manufacturers in the medical realm owe a particularly strict duty of care to the eventual consumers because of the
serious side effects that can result from a breach of this duty, however, they can discharge this duty to the consumer if
they properly inform a "learned intermediary" (the doctor) to give them the same level of knowledge of the
manufacturer in order to assist the consumer.
 When establishing causation in cases involving a failure to disclose medical risks and a manufacturer, you must use a
subjective test, asking whether, if informed, this particular patient would have forgone the treatment.
o If they would have decided against surgery, then causation is established.
 In learned intermediary cases, the patient does not need to prove that the intermediary would have relayed the risks on to
the patient if the manufacturer had properly informed them.
Notes  Manufacturers did not inform the doctor of the risks
 Manufacturer said that even if they had informed the doctor of all the risks, he still would not have told you anyway
(therefore, no causal connection)
 Two negligent parties playing off against each other and claim neither of them should pay the plaintiff
o Court said they could not allow that to happen
 Makes it a lot easier to write a dissent, if you know you are going to be in the dissent
o Relies on the but for test
 The doctor would not have told her anyway
 The doctor can’t be the cause either because he wasn’t informed of the risks
o Agrees that they breached their duty to warn
 Hutch thinks Sopinka had a point, but he would still allow liability
o The primary duty of Dow was to the patient – the exception is the learned intermediary rule
o If they had knowledge that the learned intermediary was not passing on information, then they cannot rely on
the learned intermediary exception – they were not fulfilling their primary duty
 o You can’t take advantage of this rule
 Incorporate this into the causation notes

Nonfeasance
 Do you have a duty to rescue?
o If you fail to act, do you owe damages?
o Intersection between law and morality
 Causation issue
o Are we prepared to say that fortuitous bystanders should have to pay? – SCC does not proportion liability
typically, it is an on/off switch
o They were dying anyway
 If someone is drowning, are we going to hold a lifeguard to a different standard?
o Take in mind, they are not in a lifeguard situation
o What about doctors in an emergency situation outside of a hospital?
o Remember, we hold people to a reasonable person standard, but that standard is specific to the person
 What if you dive in and it doesn’t go well?
o Can you claim against anyone? – Haynes v Harwood
o The rescuer may or may not recover – often based on negligence
 Haynes recovered because the horse tier was negligent
o The rescuer when they jump in does not know whether or not they will be able to recover, because they
don’t know how the drowning person got there and if they were negligent
 Was there a legal duty upon me to rescue?
 Misfeasance
o Can be acts or omissions that lead to liability
 Nonfeasance
o General rule is failure to act will not result in liability
o It has to be a certain kind of omission for it to lead to liability
o The rescuer had no part in creating the risk
 You can challenge the actions of administrative bodies if they act in an unreasonable fashion
o Roncarelli v. Duplessis
o Public bodies get power through legislation, and they can do anything they want within their jurisdiction
 If they are empowered to do something, it does not mean they are obligated to do it
 They are restricted by their legislative jurisdiction and the charter but there is otherwise no
obligation to act in good faith

Childs v. Desormeaux [2006] SCC

Facts The defendant hosts held a “BYOB” party at which the defendant Desormeaux was a guest. After leaving the party,
Desormeaux drove a vehicle that collided with the vehicle in which the plaintiff was a passenger. The plaintiff was seriously
injured. At the time of the accident, Desormeaux’s blood-alcohol concentration exceeded the legal limit. The defendant hosts
served small amounts of champagne at the party. The trial judge did not make a finding that the hosts knew Desormeaux was
intoxicated when he left the party. The plaintiff seeks compensation from the hosts on the basis that they failed to stop
Desormeaux from driving while inebriated. The trial judge found in favor of the defendants, and the Ontario Court of Appeal
dismissed the plaintiff’s appeal, which they further appealed to the SCC.
Issue(s)  Do social hosts who invite guests to an event where alcohol is served owe a legal duty of care to third parties who may
be injured by intoxicated guests?
Decision No DOC owed – appeal dismissed
Reasons McLachlin CJ
 The rule for establishing a duty of care was found in Anns v. Merton Council, as applied in Canada in cases such as
Nelson v. Kamloops and Cooper v. Hobart
 Stage 1: is the situation analogous to one in which a duty of care has already been established? If not, is there a novel
duty of care, evidenced by foreseeable harm within the context of a relationship of sufficient proximity to warrant
imposing a duty?
 o Stewart v. Pettie affirmed that a special relationship existed between taverns and the motoring public that could
require the former to take positive steps to protect the latter
 Though, the situation here was not analogous to the duty applied to commercial hosts in light of the
difference in the latter’s ability to monitor consumption, the existence of strict legislative regulation
of sale and consumption of alcohol (which was not mirrored for hosts) and the added motivation for
commercial hosts to encourage consumption
 Commercial hosts enjoy an important advantage over social hosts in their capacity to
monitor alcohol consumption (Hutch thinks this has to do with standard of care – he thinks
it would have been a way better SOC case, he is baffled why there is not a SOC)
o The trial judge’s factual findings did not support the conclusion that the hosts knew or should have known
Desormeaux was too inebriated to drive – risk of injury to third parties was not reasonably foreseeable
 If there was no finding that the hosts knew or should have known that the guest who was about to
drive was impaired, how can it be said that they should have foreseen that allowing him to drive
might result in injury to other motorists?
o A novel duty would be based on nonfeasance and a positive duty to act, which may exist if foreseeability of
harm is present and if other aspects of the relationship between the plaintiff and the defendant establish a
special link or proximity – three situations have been identified by the courts, but this was not a situation
where a positive duty to act had been recognized
 The hosts had not attracted others to participate in an inherently risky activity that they controlled –
they were not involved in the creation or control of a risk
 The hosts had not entered into a paternalistic relationship of supervision and control – there was no
reliance by the plaintiff upon the defendant hosts to take steps to protect against the risk involved
 The hosts had not exercised a public role or benefited from a commercial enterprise offering a service
to the public
o The court needed to be concerned with individual autonomy – the defendant hosts served alcohol at their party,
but their guests did not “park their autonomy” at the door
 While there is no doubt that an omission may be negligent, as a general principle, the common law is
a jealous guardian of autonomy (who’s autonomy are we protecting here? Why is the autonomy of
social hosts who are hosting parties trumping people out there who are being injured by drunk
driving?)
 Stage 2: if a prima facie duty of care is established under stage 1, are there residual policy considerations outside the
relationship of the parties that may negative the imposition of a duty of care?
o Since no prima facie duty of care was established, there was no need to consider stage 2
Ratio  Social hosts who invite guests to an event where alcohol is served are not, absent conduct implicating them in the
creation or exacerbation of a risk, in a relationship of sufficient proximity to give rise to a duty of care to third party
highway users who may be injured by intoxicated guests
 A novel duty would be based on nonfeasance and a positive duty to act, which may exist if foreseeability of harm is
present and if other aspects of the relationship between the plaintiff and the defendant establish a special link or
proximity
o The hosts attracted others to participate in an inherently risky activity that they controlled
o The hosts had entered into a paternalistic relationship of supervision and control
o The hosts had exercised a public role or benefited from a commercial enterprise offering a service to the public
Notes  Legally not required to carry 1st party insurance – they maybe had $1 million, the drunk driver maybe had $1 million,
but they were short lots of money that they needed
o They had exhausted all of the possible sources of compensation
o This is how you explain this – the plaintiffs were not in any way to blame for this crash
o It is not if someone one day said, should we make social hosts liable? They are looking for insurance
o The question is: are you going to let these people access the insurance of the people who hosted the party?
 Hutch does not think it would make a difference based on McLachlin’s judgment whether or not the party was BYOB or
not
o To her, the major hurdle is proximity
 Tough to say that no matter what happens in someone’s house, if they are a social host, too bad
o What if he got drunk and attacked someone in the house?
 Hutch thinks that the SCC would have had a different result – you owe a DOC to your guests to
protect them from harms on your property
 Hard to say you didn’t have anything to do with it – you encouraged people to come to your house
and drink whatever they wanted
  Hutch thinks this should have been a SOC case
o No problem with a lowered SOC for social hosts than commercial hosts but why is there no duty to act (failure
to act will not result in liability)
o Social policy behind this is very dubious – don’t we want to discourage people from having parties where
drunk people drive?
 They may have run into a foreseeability issue like in Rankin (although Hutch doesn’t buy this either)
 How can you use the autonomy of the social hosts as a way to deny these victims claims, when they hosted a party
where people were getting black out and driving drunk?
 Based on McLachlin’s reasoning, two people might exist where one person has a duty to the other, but not the other way
around
o We would not have to rescue Hutch, but he would have to rescue us (paternalistic relationship)
 Why is the party not caught up in McLachlin’s first exception?
o They intentionally invite people to the house and bring their own booze
o From a SOC perspective, she could have taken extremely minimal steps to ensure that no one drove home

Just v. British Columbia [1989] SCC

Facts Heavy snow fall forced Just and his daughter to stop in a line of traffic by a rocky slope on a major highway. A boulder,
which worked loose from the wooded slopes above the highway, came crashing down upon his car killing his daughter and
causing him very serious injuries. Just contended that the city had negligently failed to properly maintain the highway. The
Department of Highways had set up a system for inspection and remedial work upon rock slopes. Inspection and
recommendations were made by engineers and the work was effected by a rock scaling crew responsible for performing
remedial work throughout the entire province. The department’s practices had been to make visual inspections from the
highway unless rock falls or a history of instability in an area indicated a need for the rock engineer to climb the slope.
Numerous informal inspections were carried out by highway personnel as they drove along the road. The trial judge found
that the entire system of inspection and the way it was implemented was a policy matter which did not give rise to liability.
No finding was made as to whether or not the system of inspection was reasonable or whether the inspections themselves
were properly carried out. The Court of Appeal upheld the finding of the trial judge.
Issue(s) Is the government under a duty of care to maintain highways and if so, are they liable if the highways are not sufficiently
maintained?
Decision New trial ordered
Reasons Cory J (majority)
 The province owes a duty of care, which ordinarily extends to their reasonable maintenance, and to those using its highways. 
 The Department of Highways could readily foresee the risk that harm might befall users of a highway if it were not
reasonably maintained. 
o That maintenance could be found to extend to the prevention of injury from falling rock.
 Government agencies may be exempt from the application of the traditional tort law duty of care if an explicit statutory
exemption exists or if the decision arose as a result of a policy decision.
o On their face, the statutory provisions do not appear to absolve the respondent from its duty of care to maintain
highways reasonably, rather, by inference they appear to place an obligation on the province to maintain its
highways at least to the extent that a municipality is obligated to repair its roads
 The functions of government and government agencies have multiplied enormously in this century – often government
agencies were and continue to be the best suited entities and indeed the only organizations which could protect the public in
the diverse and difficult situations arising in so many fields. 
o They may encompass such matters as the manufacture and distribution of food and drug products, energy
production, environmental protection, transportation and tourism, fire prevention and building developments. 
o The increasing complexities of life involve agencies of government in almost every aspect of daily living. 
o Over the passage of time the increased government activities gave rise to incidents that would have led to tortious
liability if they had occurred between private citizens. 
 The early governmental immunity from tortious liability became intolerable – this led to the enactment of
legislation which in general imposed liability on the Crown for its acts as though it were a person. 
o However, the Crown is not a person and must be free to govern and make true policy decisions without becoming
subject to tort liability as a result of those decisions. 
 On the other hand, complete Crown immunity should not be restored by having every government
decision designated as one of “policy”. 
o Thus, the dilemma giving rise to the continuing judicial struggle to differentiate between “policy” and “operation”
  Whether or not a decision is characterized as a policy decision or as an operational decision rests on the nature of the decision
and not on the identity of the actors. 
o Generally, decisions concerning budgetary allotments for departments or government agencies should be classified
as policy decisions. 
o A policy decision may be open to challenge on the basis that it is not made in the bona fide exercise of discretion.
 If after due consideration it is found that a duty of care is owed by the government agency and no exemption by way of
statute or policy decision-making is found to exist, a traditional torts analysis ensues and the issue of standard of care
required of the government agency must next be considered. 
o The manner and quality of an inspection system, since it was clearly part of the operational aspect of a
governmental activity, should be assessed when consideration is given to the standard of care issue. 
o At this stage, the requisite standard of care must be assessed in light of all the surrounding circumstances including
budgetary restraints and the availability of qualified personnel and equipment. 
o In this case a new trial was necessary to make the necessary findings of fact on the negligence issue.
Sopinka J (dissenting)
 The respondent had the power to carry out the inspections but was under no duty to do so. 
o Conduct within the limits of this discretion gives rise to no duty of care; conduct outside of these limits may attract
a private law duty of care.
 The respondent’s liability, pursuant to the Crown Proceeding Act, was no greater than that of a municipality. 
o A municipality has, within its statutory discretion, the authority to maintain highways but no duty to do so. 
o A litigant may not attack a policy and it is not appropriate for a Court to pass on it, absent evidence that a policy
was adopted for some ulterior motive and not for a municipal purpose. 
o In order for a private duty to arise, it would have to be shown that the Rockwork Section acted outside its delegated
discretion to determine whether to inspect and the manner in which the inspection is to be made.
 Policy decisions are immune from review because they usually entail not only a decision to do something but also some call
upon the public purse. 
 The respondent was acting within its discretion when it decided that inspections should be done and the manner in which
they were to be done. 
 Responsibility for deciding the extent to which the inspection program was to be implemented was delegated to the
Rockwork Section.
Ratio  The duty of care should apply to a public authority unless there is a valid basis for its exclusion.
 Policy decisions – the decision by the government about what acts to perform under a given statute – are exempt from
liability; operational decisions – the decision by the government about how to perform those acts once they have been
decided – are not exempt from liability.
Notes  Hutch thinks this case is not a million miles away from Vaughan v Menlove/Bolton v Stone
o Should it be different if the property is public property?
 Why might we think a different test would be appropriate?
o Any property that is owned by the province (huge in BC) – are we going to say you are responsible for all of
this as if it were private property?
o The effect would be enormous time and cost expenditures on behalf of the BC government (higher taxes or
cuts to other services)
o The message we send to Stevenson is, if you can’t afford to make safe ginger beer, then get out of the business
 This logic does not work for the BC government – they will just pass legislation exempted them from
liability and any maintenance
 Trying to find a balance between some effort made but there are going to be some limits
 Distinction between policy and operation
 Massive difference between public and private bodies SOC analysis is that the public body can claim budgetary limits
(we did the reasonable think within our budget – the private individuals cannot run these same lines of argument)

Jane Doe v. Metropolitan Police [1990]

Facts On August 24, 1986 Jane Doe was confronted by an intruder. He had gained access to her second-floor apartment by forcible
entry through a locked balcony door. Ms. Doe was raped. The attacker fled. The police were called immediately. Several
months later, the attacker was captured. He ultimately pleaded guilty to a number of sexual assaults. These included the
attack upon Ms. Doe and assaults upon several other women who had been previously violated in a manner similar to Ms.
Doe. The accused was sentenced to 20 years' imprisonment. All of the prior attacks had occurred within a one-year period in
 the vicinity of Church and Wellesley Streets, Toronto. They involved white, single women, living in second or third floor
apartments. In each case, the attacker had gained entry through a balcony door. Ms. Doe has now started a civil action
against: (1) Kim Derry and William Cameron, the investigating officers in charge of the case; (2) Jack Marks, Chief of the
Metropolitan Toronto Police Force at that time; and (3) the Board of Commissioners of Police for the Municipality of
Metropolitan Toronto. She seeks damages for pain and suffering, inconvenience and loss of enjoyment of life. In addition,
she has incurred expenses and lost income. She suffers from serious and prolonged bouts of depression and anxiety. This has
led to psychiatric counselling and therapy. Ms. Doe has raised two causes of action against each of the defendants. The first
of these is framed in tort. The second seeks a declaration that her right to security of the person and her right to equal
protection of the law under ss. 7 and 15(1) of the Charter respectively, have been violated.
Issue(s)  Do the pleadings support a cause of action against the defendants, or any of them, in tort?
Decision The claim in tort against all defendants must be allowed to proceed
Reasons Moldaver J
 Section 57 of the Police Act imposes certain duties on the police
o Preserving the peace
o Preventing crimes
o Apprehending offenders
 The police are charged with the duty of preserving law and order within our society, including the protection of the
public from those who would commit or have committed crimes
 While the police owe certain duties to the public at large, they cannot be expected to owe a private law duty of care to
every member of society who might be at risk (indeterminate liability for a public body)
o Foreseeability of risk alone is not sufficient to impose a private law duty of care
 To establish a private law duty of care, foreseeability of risk must coexist with a special relationship of proximity – the
requirements of this special relationship were defined by Lord Wilberforce in Anns
o “First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage,
there is a sufficient relationship of proximity or neighborhood such that, in the reasonable contemplation of the
former, carelessness on his part may be likely to cause damage to the latter – in which case a prima facie duty
of care arises”
 The plaintiff alleges that the defendants knew of the existence of a serial rapist – it was eminently foreseeable that they
would strike again and cause harm to another victim
o This supports the foreseeability of risk
 The plaintiff further alleges that by the time she was raped, the defendants knew or ought to have known that she had
become part of a narrow and distinct group of potential victims, sufficient to support a special relationship of proximity
– they knew:
o That the rapist confined his attacks to the Church and Wellesley area
o That the victims all resided in second or third floor apartments
o That entry in each case was gained through a balcony door
o That the victims were all white, single and female
 Accepting the facts, they support the requisite knowledge on the part of the police sufficient to establish a private law
duty of care – the harm was foreseeable, and a special relationship of proximity existed
 In this case the plaintiff claims that the duty owed to her required that she be warned of impending danger or in the
absence of such a warning that she be adequately protected
o She claims that they made a conscious decision to sacrifice her in order to apprehend the suspect
 In Kamloops, the court held that even if a private law duty of care exists, policy decisions made by public officials will
not attract liability in tort so long as they are reasonably and responsibly made
o On the other hand, when it comes to the implementation of policy decisions, i.e. the operational arena, public
officials who owe a private law duty of care will be exposed to the same liability as others if they fail to take
reasonable care in discharging their duties
o If the decision not to warn was based on policy, the plaintiff implicitly alleges that it was made arbitrarily,
unreasonably and irresponsibly – it stemmed from a conscious decision to use the plaintiff as bait, combined
with an unwarranted stereotypical belief that such warning would cause hysteria
o Even if the decision not to warn was one of policy and was responsibly made, it may have carried with it an
enhanced duty to provide the necessary resources and personnel to protect the plaintiff and others like her
 In terms of causation, it is possible to argue that it cannot be proved that if the police had discharged their private law
duty of care to the plaintiff, she would not have been assaulted
o But, had they warned her, many options would have been available to her, all of which she was denied as a
result of a failure to warn
o Also, it is possible that if the police properly protected her, she would not have been assaulted
 o Where the negligent conduct alleged is the failure to take reasonable care to guard against the very happening
which was foreseeable, the claim should not be dismissed for want of causal connection
 The pleadings in tort are sufficient
Ratio  Even if a private law duty of care exists, policy decisions made by public officials will not attract liability in tort so long
as they are reasonably and responsibly made
o On the other hand, when it comes to the implementation of policy decisions, i.e. the operational arena, public
officials who owe a private law duty of care will be exposed to the same liability as others if they fail to take
reasonable care in discharging their duties
Notes  This decision merely entitled the plaintiff to continue her action – it is not an indication that the allegations or any of
them against the defendants are true or that the defendants are liable to the plaintiff – these are matters for trial
 She wanted to change police practices, not so much concerned with damages
o They seem to put the priority on capturing the rapist as opposed to protecting women from assault

R v. Imperial Tobacco Canada Ltd [2011] SCC

Facts In 2005, the Supreme Court of Canada held that British Columbia’s Tobacco Damages and Health Care Costs Recovery Act
was constitutional in British Columbia v Imperial Tobacco. The CRA allows the provincial government to recover smoking-
related healthcare costs from tobacco companies. In response to the decision, the tobacco industry, in what can be seen as an
effort to derail payment, attempted to recoup damages from the federal government by alleging that the Government of
Canada should also be responsible for any damages that might be found against the tobacco companies because Canada has
actively participated in the Canadian tobacco industry on an operational level for 50 years. In 2011, the SCC unanimously
rejected this argument in R v Imperial Tobacco Canada, eliminating the possibility of holding Canadian taxpayers as insurers
of smoking-related diseases. Imperial Tobacco pleaded that Canada researched, designed, developed, tested, manufactured,
and promoted the “light” and “mild” strains of tobacco at issue in the Knight case, and that it received licensing fees and
royalties for the tobacco strains it developed in return. Additionally, Imperial Tobacco alleged that Canada made
misrepresentations to consumers and Imperial Tobacco about the relative safety of cigarettes containing the tobacco strains
designed by Canada. Accordingly, Imperial Tobacco raised numerous claims against Canada in both cases. For example, the
tobacco companies claimed that Canada owes a duty of care to Imperial Tobacco and consumers for negligent design, failure
to warn and negligent misrepresentation. The tobacco companies also claimed entitlement to equitable indemnity from
Canada; even if Canada is not liable under any of the third-party claims, they claimed entitlement to declaratory relief.
Issue(s)  Whether to strike out third-party notice that added Canada as a third-party to two cases before the courts of British
Columbia:
o The Costs Recovery Case: The Government of BC sought to recover costs for medical treatment of individuals
suffering from tobacco-related illnesses, alleging that the tobacco companies failed to warn the public about
the risks associated with cigarettes
o The Knight Case: A class action brought against Imperial Tobacco on behalf of class members who purchased
“light” or “mild” cigarettes alleging the tobacco industry misrepresented the levels of tar and nicotine listed on
the packages
Decision All claims struck
Reasons McLachlin J
 The test to strike out a claim is well established: assuming the facts as pleaded are true, if it is plain and obvious that the
pleading discloses no reasonable cause of action, a claim will be struck.
o The SCC struck out all of the claims against Canada, holding that none of them had a reasonable chance of
success
 The crux of the appeal was to differentiate between governmental “policy” and “operational” decisions.
o Government actors have no duties in negligence with respect to policy decisions, yet they may attract tort
liability when they are negligent in carrying out prescribed duties.
o Policy decisions are exempted from tort liability because the Crown must be free to govern and make policy
decisions without becoming subject to tort liability as a result of those decisions.
o The question then becomes what constitutes a policy decision that is protected from negligence liability?
 While various courts have addressed this question, the SCC said that the answer remains elusive.
 The policy/operational approach, albeit the dominant approach in Canada, “does not work very well
as a legal test.”
 Courts have found it notoriously difficult to decide whether a decision falls on the policy or
operational side of the line.
 After a review of foreign jurisprudence, the SCC made the following three observations:
 o (1) the net of immunity is cast too broadly if all the rational government acts that involve discretion are
protected;
o (2) only “core” policy decisions should be protected from negligence liability; and
o (3) core policy decision should not be defined as a “non-operational” decision but should be defined positively
as a decision that is grounded in social, economic and political considerations.
 Based on these premises, the SCC concluded that “core” policy governmental decisions protected from judicial review
are “decisions as to a course or principle of action that are based on public policy consideration, such as economic,
social and political factors, provided they are neither irrational nor taken in bad faith.”
o This approach emphasizes positive features of policy decisions, instead of defining the decision negatively as
one that is not an “operational” decision.
o Additionally, it is not a litmus test and the degree of “policy” involved should be taken into account.
o Furthermore, government actors with the responsibility of formulating a course of action based on social,
economic or political factors are likely to be immune.
 After the SCC fashioned this clearer policy/operational test, it held that the claims to negligent misrepresentation, failure
to warn and negligent design were struck out because they were related to core policy decisions.
 Assuming that the facts as pleaded were true – Canada falsely represented to consumers and to tobacco companies that
low-tar cigarettes were less harmful – Canada developed this public health policy out of concern for the health of
Canadians.
o Additionally, the Minister of Health’s recommendations on warning labels are integral to the policy of
encouraging smokers to switch to low-tar cigarettes.
 Furthermore, even though Canada owed a prima facie duty of care to the tobacco companies when it negligently
designed its strains of low-tar tobacco, policy considerations negated this duty because Canada’s decision was based on
Canada’s health policy.
Ratio  After a review of foreign jurisprudence, the SCC made the following three observations:
o (1) the net of immunity is cast too broadly if all the rational government acts that involve discretion are
protected;
o (2) only “core” policy decisions should be protected from negligence liability; and
o (3) core policy decision should not be defined as a “non-operational” decision but should be defined positively
as a decision that is grounded in social, economic and political considerations.
 Based on these premises, the SCC concluded that “core” policy governmental decisions protected from judicial review
are “decisions as to a course or principle of action that are based on public policy consideration, such as economic,
social and political factors, provided they are neither irrational nor taken in bad faith.”
o This approach emphasizes positive features of policy decisions, instead of defining the decision negatively as
one that is not an “operational” decision.
o Additionally, it is not a litmus test and the degree of “policy” involved should be taken into account.
o Furthermore, government actors with the responsibility of formulating a course of action based on social,
economic or political factors are likely to be immune.
Notes