Sharon Zheng | LAW 108C | Spring 2012| Donald GallowayCASE FACTS DECISIONAthey v. Leonati

SCC 1996

Appellant suffered back injuries in 2 successive motor vehicle accidents, went to the gym after, and then experienced disc herniation

BUT FOR TEST A factor is a cause of a result of the result would

not have happened but for that factoro AKA that factor is a cause if it is a necessary

pre-condition Tortious acts: car accidents – caused back injury

(causation established)o But for can still be used for multiple

wrongdoers Non-tortious act: stretching exercises – worsened

back injury BOTH contribute to the harm HELD: but for the tortious acts, there

wouldn’t be the harm. Causation found, liability

BUT there can be more than one cause – the negligence doesn’t have to be the SOLE cause of the injury!

As long as the D is part of the cause, then the D is liable, even though his act alone was not enough to create the injury

Although held contributorily

ISSUE: the BUT FOR TEST is sometimes unworkable (Athey) WHAT DOES “NOT WORKABLE MEAN?

o 1) a test that points in the wrong direction (ie we know the right answer but the test doesn’t provide it – and therefore there’s a way to get to the right answer) OR

o 2) a test that doesn’t provide an answer ORo 3) a test that provides an unfair answer (not that the answer is wrong – but

we don’t like it because it’s unfair)?

SITUATIONS IN WHICH CAUSATION IS TRICKYo Ordinarily we attribute causality in circumstances where the event would still

have happened. Examples: 1) Three people independently pull ropes that open a floodgate. Only

two were needed 2) Two people shoot a victim through the heart at the same time 3) I dig a hole that you fall into; if I hadn’t dug it someone else would

have dug it and you would still have fallen in (pre-emption)o 1) and 2) are examples of “over-determination” where >1 factor

contributes Belt + suspenders In the first case, the extra person eases the effort of the other people,

but is otherwise redundanto 3) is one where the defendant’s act pre-empts the operation of another

element If no belt, then suspenders

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway

PROBLEM 1 OF THE BFT: it can extend to an indeterminate number of things!

o It’s excessively inclusive: the gunman who shot the victim is a cause, the person who sold the gunman the gun, the person who made the gun, the parents of the person who made the gun … (at the end of Athey)

o SOLUTION: 1. When we use the but for test, we don’t use it in the ordinary sense

of the words We distinguish between background factors (taken as given) and

causes Causes are unusual interventions that operate against the

background, that help to explain the occurrence of an event or the non-occurrence of an event that should have happened

2. In tort we differentiate between factual cause and proximate cause (in crim, legal cause)

FIRST we look at factual cause: is there a causation? THEN we look at proximate cause. Proximate cause is more

normative and value laden … given the factual cause, is it fair to hold proximate cause?

PROBLEM 2 OF THE BFT: there may be several chains of causation!o Courts have been seduced by the metaphor of a “chain” of causationo Each link is a necessary precondition - if you remove a link you break the

chaino If you reject the metaphor, you reject the reason for the BFTo ISSUES: what if your chain is not linear? What if you have several chains

feeding into the main one – if you break one chain, it would still happen PROBLEM 3 OF THE BFT: (the first major problem)

o It is a test of INCLUSION Yes - if the BFT is met, the factor is a cause

o It is NOT a test of EXCLUSION Just because a factor FAILS the BFT doesn’t mean it isn’t a cause!

o That is to say: it does not allow us to determine when the factor is not a cause (it can give rise to false negatives)

o For THIS REASON, it is sometimes not workable! Note on MATERIAL CONTRIBUTION

o Law saying we need to supplement the inclusive part of the BFT with the MC test

o Supplementing the BFT with a MC test does address cases where we would commonly identify causality, but it doesn’t address the pre-emption case unless we say that in that case the factor is MATERIALLY CONTRIBUTING

Just because if I didn’t do it someone else would – does that attribute material contribution?

o But if that is the case why don’t we just dispense with the BFT? ISSUE:

o Material contribution SOUNDS like a great supplemental test because we use it in ordinary life

o We use the word CONTRIBUTE rather than CAUSE to indicate that many factors were operational

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayo But what stops the MC test from SUPPLANTING the BFT? Then we’re

just supplementing a problematic test with another problematic test. According to Athey there are always multiple factors (the fire is caused

by the match, O2, waste paper) so every case is a case of contributiono The BUT FOR TEST tells us that a cause is a necessary precondition (a

synonym), AS WELL AS a method for defining when something contributeso The MATERIALLY CONTRIBUTION test provides a synonym, BUT does not

show us when something is contributing or noto The idea of material contribution fits best where we take

background conditions as given and have two interventions that combine to bring about a result:

Ex: where 10 drops of poison kill, A gives one drop and B independently gives 9 drops. A has materially contributed to the death

Same where A gives a drop to someone who has already taken 10 drops but is not yet dead (they’re gonna die anyways, but you give one more for luck – adding to the mess)

Is A responsible? Factually, we accept they’ve contributed (requirement 1)

Once we introduce material contribution as a test, it threatens to supplant the BFT rather than supplement it

o So why does the SCC hold onto the BUT FOR test at the primary test?o Every BF factor is a contributing factor, some contributing factors that will

count as causes are not BF factorso If all count as causes then we have a contribution test of causality rather

than a BFT In fact, BFT is a factor which we can use to help us determine if

something is MCo But once we use the MC test to supplement the BFT, then the BFT is

no longer the test, the MC test iso What we really want is a valuation of the extent of something’s cause

It’s a FAIRNESS test then, not a factual test

Snell v. Farrell

SCC 1990

Respondent consented to have a cataract surgically removed. Surgery was performed negligently (Dr should have realized bleeding and stopped) – lead to blindness in right eye due to atrophied optic nerve but unsure whether it was the surgery, a stroke (due to

INFERENCE OF CAUSATION Tortious act: Dr Non-tortious act: stroke? Diabetes? Causation was not proven – do not know that but

for the Dr’s negligence the plaintiff would not be blind

P: we should move away from the but for test!o McGhee

Brick kiln worker, had to cycle home to shower

Contracts dermatitis, argues Coal Board responsible for not providing showers

Coal Board: showers don’t remove every grain of dust – you even if we had supplied a shower we don’t know if you would’ve gotten dermatitis anyways!

SOLUTION 1 – reverse the onus

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaydiabetes) or glaucoma

(Wilberforce) SOLUTION 2 – material contribution is

material increase (Lord Reid) – P just has to show material increase!

ISSUE: material increase in risk and material contribution are collapsed into one here and they’re not the same!

Only the later changes the state of the world!

SOLUTION 3 – cook v. lewis: both plaintiffs equally liable, onus reversed

In this case, one neg and one non neg cause!

There P hasn’t established they’re a victim of tort! Cannot reverse onus

Spokina does not accept any of these – if we did insurance for Drs would go through the roof

SOLUTION: All the knowledge is with the defendant (Dr)

therefore inf of causation If you’ve established there’s a tortious and non-

tortious cause but don’t know which one caused the harm – assume Dr is liable, and Dr can show evidence to rebut

Note: “not shifting the burden”, and keeping the “robust and pragmatic approach” to causation using the but for test

Galloway: this “non shift” is problematic – what if D doesn’t have extra info? Does this only apply to Drs? Why are we focussing on the integrity of evid?

Cook v. Lewis

SCC 1951

ALTERNATIVE LIABILITY THEORY (SUBSET OF MATERIAL CONTRIBUTION)

Two tortious act Only one act causes the harm (two bullets, one

bullet hole) but it’s not know which one caused the harm

Since they’re both tortious, they should sort it out among themselves: presumption that both are liable, onus of proof shifts to wrongdoer to show each is not the sole wrongdoer

HELD: Liability was split! LiabilityBM v. BCAG

BCCA 2004

RCMP at Prince George failed to investigate complaint of domestic violence (reoccurring incidents in which

MATERIALLY CONTRIBUTION TEST DISS (Donald) – it’s time for change!

o Found duty, breach and causationo This case is like McGheeo Just and fairness: RCMP should’ve

investigated and didn’t (policy reasons – right to police protection high)

Sharon Zheng | LAW 108C | Spring 2012| Donald GallowayRCMP were involved, F was forgiving of M) – 7 weeks later he shot his. M shoots friend and daughter, kills friend. M suing RCMP

o P: if I am unable to show causation and am not compensated, there’s something wrong with the legal system! Donald agrees

o If material contribution above de minimis range, then it’s a cause

o 4 part Haag formulation re: when we should apply a relaxed notion of causation:

1. Where a breach of duty has occurred,

2. The damage has arisen within the area of risk which brought the duty into being

3. The breach of duty materially increased the risk that damage of that type would occur (contentious)

4. It’s impossible, in a practical sense, for either party to lead evidence which would establish either that the breach of duty caused the loss or that it did not

o All we know here is that police intervention = effective deterrent, and that there was a breach of a duty in this case (tortious cause)

MAJo HELD: No causation – no evidence that

RCMP intervention would have lead to a different outcome, there were already disincentives in place

Walker HIV + man, not asked HIV screening question (Canadian Red Cross Society failed its duty to implement adequate donor screening measures ex. pamphlets), donates tainted blood.

ISSUE (Major):o Breach of duty – did the RC ask enough Qs in

screening people?o Causation – if the individual had been given

the proper warning would he have gone ahead and donated?

Finds BFT unworkable (seems to have overdetermination in mind) because multiple independent factors are contributing – but (Athey) there are ALWAYS multiple causes! Multiple causes creating independent series of events adding together is what overdetermination is really about

So this us a fairness issue! 3rd type of unworkability! The question is – was the failure a sufficient

condition. Is this the right Q?!o Galloway: NO! Sufficiency is the wrong notion

to introduce – you really don’t know what the donor would’ve done

Major finds: we use MC when but for doesn’t work – but for doesn’t work in situations like this where you can’t be sure – and yet Major concludes the but for test works!! Claims to adopt Snell reasoning?!

Sharon Zheng | LAW 108C | Spring 2012| Donald GallowayNonsensical …

HELD: CRCS/ hospital liableResurfice v. Hanke

SCC 2007

Hanke placed water hose into gasoline tank of ice resurfacing machine rather than water tank. Hot water overfilled gas tank, vaporize gas, released into air, ignited by overhead heater, causing explosion and fire. Breach of duty due to mislabelling of the tank – caused a burn.

Whatever Donald J said, prima facie we use the but for test (even for multiple wrongdoers), material contribution is only for cases when it’s impossible for the P to prove that the D’s negligence cause the injury using but for

Causation is showing breach of duty exposed plaintiff to suffer that form of injury

The SCC ends up saying the same thing as Donald J (the 4 factors as being a situation when MC is appropriate) –they characterize it broadly but then read it as leading to a NARROW number of cases that apply!

2 situations in which MC is appropriate:o Cook v. Lewis type = MC instead of causality

ISSUE – this is actually an onus reversal, not MC at all!

o Impossible to prove what a person in the causal chain would have done had the D not committed the negligent act (Walker type)

ISSUE – Walker is incoherent! (Galloway)

And just because you fail at but for doesn’t mean you can move onto MC!

But for causation is appropriate in this case HELD: no but for causation, no liability

Clements v. Clements

BCCA2010

Joan severely injured while riding as passenger on motorcycle driven by husband – 1) overloaded, 2) pulled out to pass another vehicle (speeding), 3) hit a sharp object and punctured rear tire, 4) unevenly loaded 5) excess speed considering weather (pouring rain). Mr. Clements Felt it weave, unable to regain control, flipped over causing serious

Issue; would the accident still have happened if the D had been careful about weight and speed?

Mr. Clement liable for all 5 factors except #3 (tire puncture)

Material contribution test is not a test for determining factual causation – rather it provides a basis for finding legal causation when there’s a possibility that the D’s negligence could have been the factual cause

Therefore use of MC is not a test of causation – it’s a policy-driven rule of law to allow P to recover in cases despite their failure to prove causation

BCCA: no – if MC applies every time but for fails, then but for isn’t even a rule! If you fail but for it means you fail causation – not than you can move onto MC

2 situations in which MC is appropriate:o Circular causation: Cook v. Lewiso Dependency causation: Walker

This is just a case where we don’t know and it’s not unfair to left the D off the hook – BFT should operate! Are we convinced? Are we just turning causation into a fairness test?

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayinjury. HELD: applies but for causation - no

causation, no liabilityo Hypothetically:o P: but for the overloading/speeding in the rain

etc. (4 factors that were Joe’s fault) the accident would not have happened, therefore Joe’s at fault

o D: no – we don’t know that but for those things the accident would know have happened because there’s still the issue of the rock! Even without those things the rock could still have caused it – so we can’t prove that Joe caused it

o P: FINE, MC, so Joe’s at fault Just because but for doesn’t produce the wanted

result (you fail on it) doesn’t mean you can ditch it - it means you've failed causation! Can’t move onto MC!

o Need to decide whether or not to apply but for FIRST and THEN apply if. If it shows no causation, then that’s the end!

Tort is only where lack of care causes harm – there must be FAULT and we don’t ascribed fault unless we can prove causation on but for

What should the decision of Clements say? FIRST PRINCIPLE

If plaintiff can show that the BFT is met on the balance of probabilities, then P has proved causation

Therefore the BFT is a strategic device that P can use to meet the burden of proof but there are other ways to meet it as well

But if P cannot, P can turn to other strategies! Failing to meet BFT doesn’t necessarily show that the P fails.

SECOND PRINCIPLE: Cook v. Lewis If P can show that he was the victim of a negligent act but there were more

than one negligent actors that might have done it, P can rely on a reverse onus. Each of the negligent actors is deemed the cause unless they can show on the balance of probabilities that they were not

Ex. Each defendant trying to find THEIR bullet is somewhere else, to prove their actions are uninvolved

ISSUE: does this apply to more than 2 wrongdoers? We don’t know. This is about FAIRNESS of BURDEN OF PROOF, not causality

THIRD PRINCIPLE: overdetermination Two independent series of events may combine or come together

2 independent shots hit the mark Although redundant, a factor may sometimes be cited as a cause A full explanation would note the combine operation of two independent

factors ISSUE: can this also be applied to reasons?

1. If you give someone an incentive to do something that they probably would have done anyways you still contribute to their decision (you

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway“seal the deal”)

o Although some things count as incentive, though, and others don’t 2. Likewise if you fail to provide a disincentive, you contribute to the

decision (reversing the first point)o This move would allow us to explain Donald J in B.M. and maybe

even Walkero Donald (BM) and Major (Walker): in B.M. – if the police are under a

duty to change the assailant’s reasoning, it doesn’t matter what the assailant would have done! The negligence is so big that by doing nothing, they’ve contributed to that person’s decision EVEN IF the assailant has made their mind up

o BM Majority judge: the assailant had his mind made up! He already had disincentives in place! And they didn’t stop him, so the police couldn’t have stopped him!

Galloway’s hypothesis:PART ONE Plaintiff must provide an explanation of how we got from past to present The plaintiff will cite factors and must show that there are serious reasons

for believing these factors played a roleo Galloway: We usually talk about proof and a bop – but really we have a

flexible notion of proof operation hereo Plaintiff, we will allow you to succeed if there are serious reasons for

believing any of the elements they played a role in the resulto Therefore in the case of causation, we’re asking for less than a

balance of probabilities. We’re asking for a serious belief Ex. If you failed an exam but there was an ear splitting whistle in the exam

room at the timeo Would I have to prove that this jeopardized my performance on a bop?o Or would you say that I was a terrible student and would’ve failed

anyways?o Despite the fact that I may have failed anyways, we’re not going to ask

if I had done better without the whistle. We ask if there’s a serious reason for believing the whistle would affect my exam results

If the plaintiff will succeed unless the defendant can show (on a bop) that the factor didn’t play a role

o If there are serious reasons for believing the factor played a role, then the plaintiff will succeed

o The defendant’s job is to say that their behavior didn’t play a role! Merely showing that it probably would still have happened is not enough for

the D to succeedo Saying “on a balance of probabilities it would have happened anyways”

is not sufficientSummary

What we have done is reduce the plaintiff’s onus: if P can show that there are serious reasons for believing that a factor played a role then it is a cause unless D can show otherwise

Saying “I have a serious reason for believing the Dr’s negligence did it” will be enough for the plaintiff. So the Doctor in Snell would be liable unless he can show that negligence was unrelated or trivially related to physical deterioration.

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway Plaintiff met the burden of proof in this case!

The police are liable in B.M. unless they can show that their failure played a trivial role

Clements: P has a responsibility to show there are serious reasons the factors played a role P cites factors: overloading and speed P now has a good explanation for what happened – there are serious reasons to

believe that these elements has a bearing on the outcome because these factors tent to produce accidents like this one

Now to the D Evidence from the defendant that there is no bearing of the overloading and speed

on the crash, that they played no role That they did not in the circumstances make it more difficult to control the

bike Because they had an effect on the chain of events leading to the difficulty

in controlling the bike Evidence from the D that the accident would have happened anyway is not enough

to defeat the claim!

Therefore, we’re dealing with FAIRNESS, RISK ALLOCATION, and using language that meets our intuition. It’s not about reversing the onus or proof or using 2 tests. It’s just about REDUCING the burden of proof and seeing what happens …

Material contribution test is only really at home in the over determination cases

Instead of asking “would dermatitis have happened even if they had the shower?” under material contribution, ask “is there a serious reason for believing that not having a shower is related to dermatitis?” and then the defendant’s responsibility to prove otherwise, under the reduced onus version of the causality test

USUALLY: subjective test DRs: standards are much higher, personalized, therefore policy reasons to use

modified objective MANUFACTURER OF MEDICAL GOODS: information imbalance,

Reibl v. Hughes

SCC 1980

Underwent serious surgery, suffered a massive stroke, found that the plaintiff did not have informed consent because he wasn’t warned. Suing for damages in battery and negligence. Pension would vest in 1.5 years.

Duty of Drs: to warn of all material risks (via BC Health Care Consent Act)

1. Severity –o Objective ex. death ando Subjective standard ex. scarring (ex. Videto),

if the Dr is made aware 2. Likelihood After Dr found to have breached failure to warn of a

procedure, issue is whether, if informed of all of the risks, if they would have gone through with the treatment anyways

Instead of normal causation: modified objective based on all the circumstances (reasonable person in all the circumstances of the accused), including gender, age, beliefs etc. – a reasonable patient in

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaythat decision, of but for test

No one in hind sight would say they would have had a procedure that went so badly

10% chance poor outcome HELD: reasonable person would’ve opted

against the surgery, liability Note: if there’s no causation of harm, there’s no

negligence – so if nothing bad happened to you but your Dr failed in his duty to warn, still no neg

The court is telling us there’s an objective test of causation for medical cases and that this is coherent with the current test of causation. HOW DO RE RECONCILE THIS?o SOLUTION 1: the but for test itself is bad – because the objective test

is NOT even a test of causation! It’s actually an argument about fairness. Because it’s not fair to hold a Dr liable in certain situations

Ex. if the reasonable person would have gone through the operation This isn’t about the world anymore, it’s about what’s fair etc.

o This allows us to distinguish this case from Hollis, in which case you aren’t dealing with Drs!

When the manufacturer of a product fails to warn the consumer, we use the normal subjective test – would this person have taken the product if she had been warned?

Therefore, this is not an issue of causality between what happens, it’s actually about a favouritism towards Drs that doesn’t apply to manufacturers

ISSUE: In this case, there are situations in which plaintiff can show causality, and yet the plaintiff is losing. Is this saying that the but for test isn’t working for plaintiffs anymore?

o SOLUTION 2: The test is good! We are really using the subjective test in both! The problem with the but for test in Reibl v. Hughes though is not the BFT itself – it’s that the subjective test is not the way to go

Relying on the plaintiffs evidence of what would have happened had they been given the information is unreliable

The best we can rely on is what the reasonable person would have done, to replace what you would have done

This means we don’t have to change the test of causation or have two different test (one in the manufacturing cases, one in the doctor’s cases)

We have ONE SUBJECTIVE TEST – what would this person have done? It’s just supplemented by a rule of evidence – can’t reply on plaintiff’s words so go to what a reasonable person would’ve done

Therefore Laskin: maintaining the subjective test, but just changing rules of evidence

ISSUE: the concerns of a plaintiff must be reasonable based Galloway: you don’t want the objective test because of

bitterness and hindsight – that’s the only evidence you want to exclude. This has nothing to do with the reasonableness of a plaintiff’s concerns. The idea of autonomy means you can decide the weight of your fears yourself. Therefore Laskin overstepped and went too far.

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway Galloway: if you were really consistent though, you should be

avoiding the bitter hindsight evidence in Hollis as well

Hollis v. Dow Corning

SCC 1995

Plaintiff isn’t informed of the risk of breast implants. Implant rupture, causing harm

The fact that there are two factors (1 – whether Hollis would’ve elected otherwise, 2 – whether Dr. Birch would’ve warned Hollis had they known) is found to be irrelevant

Poor policy to allows manufacturers who breach their duty to escape causation by questioning what the Dr would have done

The ultimate duty of manufacture is to warn the plaintiff adequately – for practical reasons the law permits it to acquit itself 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

Perhaps: learned intermediary is already the courts going halfway, so really unforgiving when the manufacturers fail to come back the other half!

HELD: causation found on the but for test, manufacturer liable for failing to disclose the dangers to the P

ISSUE 1: Arndt v. Smith (2 years later in 1997)o Dissent (CJMac) – you can’t have different

tests for doctors and manufacturers! The subjective test should be used in all cases

o This shows how unsure this area of law is ISSUE 2: the causation test in the learned

intermediary ruleo Court abandons any notion of causality in this

issueo An argument by the manufacturer (when it

fails to inform doctors) that even if they had passed onto the information onto a Dr the Dr wouldn’t have passed it on will not stand

Court: if manufacturers are going to make it easier for themselves by using a learned intermediary, then they cannot rely on the normal rules of causation!

“The ultimate duty of the manufacturer is to warn the plaintiff adequately … having failed to warn the intermediary, the manufacturer has failed in its duty to warn the plaintiff who ultimately suffers …”

Brito v. Woolley

Plaintiff vaginally delivers twins,

Professional women, (therefore had respect for other professionals?), had 2 children vaginally

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway

BCJ 2003second twin’s cord prolapses causing severe mental disability to the child. Plaintiff claims that the doctors failed to present her with the material risk of prolapse and present her with the option of having a caesarean section

previously with no complicationso Suggests that she would have followed the

Dr’s advice and the lower likelihood of risk, rather than the emotional response she claims after

o Received medical advice from more than one Dr who concurred

<1% poor outcome (although dire consequence, so material risk)

HELD: no causation – would have opted for a vaginal delivery even if she had been informed of the risk, and a reasonable Fr would have recommended vaginal delivery, no liability

ISSUE: just because a doctor recommends something doesn’t mean it would be unreasonable to not follow those directions: Laskin is very wary of this

Donald in this case though, holds to the idea that if a doctor recommends something the plaintiff (and a reasonable person, a “loving mother”) would have always followed the doctor’s recommendation regardless of what kinds of warnings/ information was given

o This is exactly of the antithesis of Laskin’s judgement!

o Laskin wanted to allow patients to reject doctors and make up their own minds!

o Galloway: goodbye autonomy? Can only win legal action if you follow doctor’s recommendations? This is the issue with the objective test!

o Laskin’s method of using the subjective test but excluding certain information is much better

Martin

ABQC 2007

Martin needed surgery, but not immediately. Dr warned of bleeding in the brain, but not sufficiently using the proper language. He made it clear to the Dr he was looking forward to his retirement and dancing with

Duty of Drs: to inform of all material risks in a manner that the patient would understand

Dr knew that Martin was looking forward In this case, high risk of harm, disclosed, but not

disclosed adequately – used language that was too medical (‘bleeding in the brain’ not ‘stroke’)

P: you owe me damages for the rest of my life for this surgery: care, remodelling of the home etc

o The surgery would have occurred later, and at the later surgery date, there would still be the same chance of the harm occurring!

o Causation test is the mixed subjective/ objective but for

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayhis daughter at her wedding. P claims if he had been warned, he would’ve had the surgery after his daughter’s wedding.

o Therefore if something’s going to happen anyway, you’re only responsible for the amount you sped it up (crumbling skull)

D: no – we only owe the addition costs in between the two dates

COURT: because we don’t know what would have happened at the surgery on the later date (unwilling to predict), they awarded the entire period (whole life!). Rejects the crumbling skull type analysis

HELD: but for causation, liability ISSUE: how can you hold THIS Dr liable if the next

Dr would have done the exact same thing?!Chester v. Afsher (H of L)

Woman goes to doctor for medical treatment. Not explained by doctor the possibility of nerve damage, and she suffers nerve damage. Plaintiff is a witness who is absolutely honest, and says she doesn’t know if she would have had the operation – BUT she says she knows that she wouldn’t have at the operation then

Deprivation of choice held sufficient for liability!

Although not followed in Canada (Galloway – this case is shocking)

But for test is met by plaintiff, but still not going to find causality!

HELD: the but for test is easily satisfied … but the doctor isn’t going to be liable because the doctor’s duty to warn didn’t cause the injury. The risk was the same irrespective of when or at whose hands she had the operation

Galloway: this is revolutionary! It’s not who caused the injury – it’s whether the doctor’s breach of duty INCREASED the risk of injury! We should only hold the Dr liable when we say yes. Since the plaintiff could have had the operation later and would have been subject to the same risk then, we shouldn’t hold the Dr liable for ANYTHING

US and UK trying to put less weight on causality and willing to recognize lost opportunity/ chances, since the traditional tort rules don’t always lead to fair results

Canada is really resistant to this!o In personal injury the question is who caused

the injury, NOT who increased the risks! In Canada, can you sue the doctor who took the

opportunity to decrease the risk of cancer? No! That’s not enough! There has to be harm!

Sindell v. Abbott US

Generic drug on the market, for pregnant women to prevent morning sicknesses. 12 years later, finds that the drug causes increase

Normal solution would say that plaintiffs would not meet their case

Issue is vast majority of plaintiffs unable to identify 12 years later the specific company which manufactured the pills

Solution: should hold each company liable for the proportion of the injury that reflects their market share (how much of the drug they marketed during a particular period)

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayin risk to cancer to daughters

o This means we don’t expect the plaintiff to tie the harm they’ve suffered to a specific wrongdoing – we treat the companies as risk creators

o Instead of joint and several liability for the whole harm, we divide the harm and allocate responsibility by market share

This is a rethinking of the tort law of negligence! It’s all about holding people liable for losses suffered

UK: Barker v. Corus

References the Fairchild case:Suffering from asbestos related diseaseWorking at two workplaces over the time where it could be contracted – and evidence suggests no other source. Two negligent activities, happening one after the other (not contemporaneously) but either one or both brought it about even though we don’t know which

House of Lords: Both should be liable. In reaching this decision, there are 6 factors (pg 126)

o Doesn’t say why these 6 factors count (court hasn’t figured it out)

o When you satisfy all these factors, there will be liability

Hypotheticalso 1st employer has asbestos, but there’s no reason at that time for the

employer to worry about asbestos because there’s no evidence of its harmo Employee might’ve contracted disease from first employer, but they weren’t

negligento Would the negligent party have to pay for anything??

House of Lords rethinking Fairchild case in Barker v. Corus It’s not just a Cook v. Lewis issue with 2 negligent parties – going back to McGee

o Pg. 128: HOL – materially increasing the risk is not the same as materially contributing!! Unlike the SCC who made this mistake, we are avoiding it!

o The employers have materially increased the risk of contracting mesothelioma so we should hold each liable to the degree they contributed to the illness – therefore liability is not for the harm but for the increasing of the risk

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayo What if the plaintiff also worked with asbestos at home? HOL recognizing it’s

still possible to apportion the risk based on the increase of risk by other parties Therefore severally liable only

UK leg didn’t like this solution so wrote a statuteo Worried about the impact on the economy, since lots of mesothelioma caseso Compensation Act (2006) – returning to the familiar situation

If you’re pointing the finger, it must be done in relation to causing the harm, not increasing the risk

So you have to go after each If there’s more than one, defendants can be jointly and severally

liable Contributory negligence won’t necessarily deny liability, but just

decreases the amount that will be paid In BC, Workers Compensation schemes would deal with this

o Is this the best way to deal with this?o Only 40% make workers comp claims – therefore something is preventing

people from seeking insurance redress. Why? Knowledge isn’t filtering to individuals

This still raises causality problems - what’s the fairest way to solve a causality problem? Don’t know.

REMOTENESS There’s been a breach of duty, a causal link, but D is saying “I shouldn’t be liable

for THIS”Wagon Mound 1

Another ship in the harbour releasing bunker oil in the water – this was negligent because it’s mucky to clean (but no one recognized it was flammable). In Vaughan v. Menlove – haystacks are recognizably easy to light on fire, but not bunker oil. On docks, people are welding. Molten metal gets on wood, a piece of cotton on top of that, bunk oil reaches this and

Re Polemiso 2 stevedores working on a boat unloading

planks of woodo Drop a plank into hold of the ship, hits bottom

of boat, spark is caused, burned down shipo Defendant: okay – we caused the loss of the

boat but we shouldn’t be held liable because it’s so bizarre and unforeseeable

o Court: you’re liable! For all the consequences that directly fall from your negligence – whether or not they’re reasonably foreseeable

Initially we saw battery to be direct and negligence to be indirect

Yet here, they want to say you’re negligent for everything you directly cause!

For it to be indirect, there has to be some element of intervention

Cameron v. Hamilton Auction Mart (Scotland)o Excited cow that went up the stairs into a

house, fell through floor, in its struggles, turned on a water tap, flooding the unit, cow thrashing lost property

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaya fire’s created, and the dock burns down

o Issue: too remote? Yes!o Court: you can’t hold people liable for

unforeseeable consequences just because they’re direct!

Court: over-ruled Polemis. HELD: you should be liable for consequences that you should have foreseen as a reasonable man! Following Cameron v. Hamilton

o Responsible only for the reasonably foreseeable consequences of one’s acts, and it was not reasonably foreseeable that dumping durance oil on water would cause conflagration

This case is less bizarre, but the same conclusion being released

PC: we use reasonable foreseeability – we hold you liable for only the probable consequences of your acts

o ISSUE - Duty of care: you owe a duty to someone if it’s reasonably foreseeable you’ll harm them

o For what harms are you liable? You’re only liable for reasonably foreseeable harms, in terms of probability

o So we’re using the same standard for duty of care and remoteness!

oHughes v. Lord Adcovate

Post office employees left manhole open, so put lamps and a tent around the hole. Kids find it alluring and explore it. Kids climb down, climb back up, knock lamp into hole, there’s a gas leak (unbeknown to anyone) and it explodes causing injury

Modified Wagon Mound COURT: You’ve created an allurement – we don’t

expect children to listen to their parents, we expect them to explore what you’ve created!

Def: this is like wagonmound! Too improbable to foresee that explosion would result!

HOL: no – this is within proximity, not too remoteo Relaxing the standardo Burns were reasonably foreseeable, these

kids suffered burns. They’re worse burns than would’ve been foreseeable due to this strange unfolding – but that’s not relevant!

o Why not? Being able to foresee the precise way the world unfolds is too hard – BUT if the eventual consequence (last chain) is generally foreseeable, then we should hold the defendant liable

Lord Reid p143: I agree that we shouldn’t be too sensitive about how things unfold, BUT there could be a case where the intrusion of a new and unexpected factor could be considered the cause of the accident instead of the act of the defendant

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayo But that’s not the case here. The fact that

there were kids is not a new factor – it’s a normal concatenation of circumstances

o OKAY so what would count as a new factor? Lord Reid is thinking about the excited cow case! The damage caused is the same sort of damage as if the cow just barged into a place. But in that case the circumstances got so bizarre that liability wouldn’t apply

What’s the difference between this situation and the cow story? It’s the difference between tragedy and farce – that some things are so strange that they are out of the world of drama and into the world of comedy

Galloway: a reluctance to use foreseeability to describe the actual chain of events, and looking more towards the foreseeability of result!

In the ensuing years, the compatibility of Hughes and Wagon Mound I has been questioned.

Assibinoine

Dad rigs up snowmobile for kid to be able to start, but it can’t stop. Kid loses control of the snowmobile, it hits the gas pipe of a school, which floats up into an intake vent and lights the school on fire

Held: not too remote! Dickson J: Polemis, Wagon Mound I, Hughes, Wagon

Mound II (not the cow case)o Claims the force of WMI has been dissipated

by Hughes (which is more plaintiff friendly) – minor modification changing the emphasis (although not overruling)

o WMI says that if the unusual happens, then that’s a categorical difference v. Hughes in which we don’t recognize a categorical difference

o Don’t need to foresee the precise concatenation

o Foreseeability doesn’t go to probabilities, it goes to possibilities

Wagon Mound II (1966)o Plaintiff was another ship that burned downo What happened between 1961 (WMI) and

1966? 1961: if plaintiff was contributorily

negligence, def would get off the hook completely

In 1961 (WMI), that plaintiff argued Polemis – you’re liable for direct responses, plaintiff trying to underplay their own contributory negligence and trying to downplay the negligence of

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaythe bunker oil release

In 1966, this plaintiff was innocent, so claiming it’s negligent to release bunker oil! Evidence was therefore very different

o Lord Reid: replay of Bolton and Stone! Very different than WMI!

The reasonable person would concede that discharging the oil is a bad idea primarily because it adheres to the dock, but secondarily because it would go on fire

Therefore even if it isn’t probable or foreseeable, it’s a possibility that a reasonable person would cite it as a reason for not discharging the oil

Therefore it counts as a reason not to do it!

In the cow case, a reasonable person wouldn’t cite the flooding as a reason for not caring for the cows

o Plaintiff friendly! Pltf only needs a reasonable possibility to win a case

This is the test accepted by Hoffer: it is enough to fix liability if one could foresee in a general way the sort of thing that happened

o WMII is the high water mark SCC: action can be successful if this is not

impossible to expect. You lose liability only with the bizarre and far fetched

Conclusion: recovery may be available provided the event giving rise to the damage is not regarded as “impossible”

o When you rig up a snowmobile like this, this result is NOT bizarre and far-fetched!

o It is enough to fix liability if one could foresee in a general way the sort of thing that happened

The idea seems to be that if a reasonable person with his/her understanding of the circumstances would cite the consequence as a reason for not doing the act the defendant can be held liable

But is the consequence to be understood as the type of harm, the way in which the harm occurred, or the story of the events?

Lauritzen Two Albertans driving from pub to pub, getting

Held: not too remote – held liable Although the wife’s departure is seen as too

remote. This reveals that remoteness can be raised

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayseverely drunk, one interferes with the driver, driver objects, causing car to go off road, lands in ditch in middle of nowhere in winter. Driver gets out to try and go for help, gets frostbite, wife leaves him.

at two junctureso First, at the stage of determining liability ando Second, at the stage of assessing damages

Lauritzen hypotheticalo Lets say driver walks out in the blizzard,

walks into refrigeration truck, truck driver locks up drives off and driver gets frostbite!

o Because frostbite is in the realm of possible circumstances (the final event is foreseeable), it seems that the SCC would say that it doesn’t matter how it happened

o Galloway: but that’s not the law Maybe the final event is foreseeable but

the concatenation of events is so bizarre that you’re not in the world of reasonableness

So what are we applying foreseeability to?

1. The eventual consequence; AND

2. The concatenation of events!!

Pulling it all together

1. In some cases, the courts regard the defendant as acting against a set of stable circumstances. Where the defendant’s act produces a highly unusual type of harm because one of the pre-existing circumstances was unusual, the courts may see it as too remote and deny liability. (Dropping a plank - ship explodes) (Re Polemis)

2. On the other hand, if the harm is of the same type as could be reasonably expected, the court will be disinclined to deny liability. (Hughes: explosion and burns)

3. Where the defendant’s act modifies the pre-existing circumstances in a highly unusual way, the courts will be disinclined to deny liability. (You don’t have to foresee the precise concatenation of events) (Assiniboine, Lauritzen)

4. Only if the final result is farfetched or bizarre will the court find remoteness (Assiniboine, Lauritze )

Since 1961, courts trying to use the reasonably foreseeable standard for remoteness

o But do you apply it to the result or chain of events? The former.

THE THIN SKULL RULE• Where you have breached a duty to someone and caused physical harm, you take

your victim as you find them• Where the victim’s unusual pre-existing condition produces results that are more

serious than you would ordinarily expect, you are still liable for the full extent of the injury

• This goes beyond Hughes, since it suggests that an injury of a different type would also be covered!

Questions

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway• Why do we have this rule?• The general rule is not that you take pre-existing circumstances as you find them.• Does it have something to do with the idea that it is your duty to treat all

individuals as unique?• It’s problematic to think that you hold someone accountable only for harms a

reasonable person would suffer• Treating people as autonomous agents means treating them as people –

we’re all special! The law does not want to work to deny the uniqueness of individuals and individuals’ bodies• Bodies are unlike houses• It’s something that defines us

• The normal rule might create an incentive to treat others as means rather than ends

• Does it apply beyond the body to the mind?• Does it apply to the “thin personality” rule?• Not really. Because fortitude is something you’re responsible for• If your body defines you, surely your personality defines you!

• Consider a person with a pre-disposition to anxiety or depression who may become severely anxious or depressed after being exposed to danger (return to this)

• Consider also the person who for religious reasons does not treat an injury negligently caused by D and it becomes worse (see interventions)• If your personality defines you, surely your religious beliefs define you!

• Would it also apply in a case where a person committed suicide? What if you’re negligent to someone, they suffer harm and they commit suicide – are you liable? (see interventions).

Bishop Man is expecting resistance from opening door, there is none, he falls through. Sues for negligent failure to warn against the door. Serious injury

Thin skull applies One would in most circumstances expect (at most)

a simple fracture and an uneventful recovery Here “the congenital condition becomes grossly

exaggerated by trauma of any sort”o This isn’t a more serious injury of the same

sort, it’s the bringing of distinct consequences that fall within the realm of liability!

Athey v. Leonati

Appellant suffered back injuries in 2 successive motor vehicle accidents, went to the gym after, and then experienced disc herniation

Crumbling skull doctrine: although D is held liable for the injury that is precipitated by the pre-existing condition, the level of compensation should discount any losses that would be suffered without D’s intervention

INTERVENING ACTStansbie v. Troman

Painter in the house, doesn’t lock it. Burglar goes in and robs

Offers one clear situation: if you undertake to protect a person from a third party intervention but are negligent you may be liable for the result

o The issue at tort is not the intervention of the

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayit. third party

o It’s that the relationship that gives rise to any tort liability at all is the undertaking to prevent certain results from happening

Held: liable Ex. why do you have locks in the house? To keep

burglars out, vandals outo What about the person who goes into the

house and burns it down? This is strange - you could’ve set the fire outside

o Is the defendant liable for that? Unsureo There are some crimes are so bizarre that

even the person who has undertaken to look after your interests is not held liable

Therefore just because a third party has intervened, doesn’t mean the original wrongdoer won’t be held liable

The negligent body guard, the negligent tradesmanBradford v. Kenellos

Restaurant – grease fire because the grill is poorly cleaned. Causes state of the art sprinkler system to put it out but someone at the restaurant sees the fire, hears a hiss and thinks there’s a gas leak and there’s going to be an explosion. Cause everyone to panic, someone gets trmpled.

The Supreme Court is divided on where to draw the line.

If we expect that a certain kind of intervention will occur through the ordinary course of events, then the original wrongdoer is not absolved of liability

The majority regard the intervention as “freakish”. The link between D’s negligence and the result is broken by “hysterical” conduct that is not within the risk created by D’s negligence

o You’re not liable for the strange conduct of a third party

o Is it so far fetched that it’s unfair to hold the original wrongdoer responsible for the consequences?

In dissent Spence (citing Fleming), says that what happened was “part of the ordinary course” of things

o There’s no intervention of a third party! The court sees it as critical that the hissing sounds

leading to harm is based on a remedial action trying to resolve the harm, as opposed to the harm itself

o This seems to really ignore the fact that their negligence did cause the fire in the first place!

MANUFACTURERS, DISTRIBUTORS, CONTRACTORS AND REMOTENESSSmith v. Inglis

Everyone in a Nova Scotian society cuts off

Held: liable The manufacturer of the fridge should have

foreseen that someone would cut off the third

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaythe third prong of a plug for the refrigerator. The refrigerator manufacturer uses a cheap circuit, that is not safe to cut off the third prong. Someone gets shocked.

prong of the plug (Everyone in the business knew or should have known that this happens). Again the ordinary course of events

o The intentional decision to cut off the third prong is within the ordinary course of events

Can you rely on the argument that people weren’t supposed to cut off the third prong?

No. It’s not an intervention – you can trace it to the malfunctioning of a fridge. Anything anyone regularly does is not an intervention, it’s part of the ordinary realm

o You have a duty to look out for the interests of other parties

o You have to look out for how they’ll actually behave

Good-wear Treaders

Good-Wear sold retreaded tires to Pash that were not dangerous in themselves but knew that Pash was going to use them in a dangerous way. Pash is warned not to use them in that way. Pash uses them and 3rd

party is killed through the use

Q1 Did Good-wear breach a duty to roadusers? Q2 If so, did the breach cause the death?

o Pash’s decision to use the tires is not regarded as an intervention. The matter is resolved at the duty/breach stage. A result like this is the very reason behind the duty

There’s a duty to road users to make sure they’re not subjected to this kind of harm

Court: because it’s foreseeable that someone will be hurt (at the duty stage), then you have a duty to not sell a tire that you know will be used in a dangerous way! Remoteness isn’t an issue.

The facts are described in para 17 as rare. Is this true?

o Court claims that this issue will only come up in rare situations

Rarely would the seller know that the buyer would be using their products in a dangerous manner

Good-wear has an obligation to road users – so we hold them to normal negligence standards (normal tort principles) … in terms of “who do I have to think about” includes road users

o Is this actually rare? This is a subjective standard – but is there a way of stopping from moving to an objective standard?

Pash’s negligence doesn’t “block or isolate” any prior negligence

Galloway: this is very intriguing! And much broader implications than what the court would suggest

SUBSEQUENT MEDICAL ERRORS

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway Def 1 hurts plaintiff Dr (Def 2) is negligent and makes it worse Is Def 1 responsible for the Dr’s negligence as well? 1970s: if a wrongdoer puts a person in the hospital, theyre responsible for the

plaintiff having to be in the hospital, but not for Dr’s negligenceo Dr negligence is so unusual and strange that it breaks the causal linko This is different than negligence by someone else (non Dr) because

negligence by others can be expected Galloway and modern law: this is likely wrong (Katzman)

o Dr’s negligence is fairly common now, we don’t se it as being so unusual that it’s freakish

o At some stage, the Dr’s negligence may be seen as bizarre so at some stage we’re in the realm of the unexpected BUT this is not the usual case

DEFENCES? There are some defences to negligence actions, but they’re limited

o 1. Voluntary assumption of risk We will only impose this in situations where it’s absolutely clear that

the plaintiff knows there are risks, and are also aware of the legal risks (waiving legal rights)

And these factors must be clearly articulated to the plaintiff If it’s unclear, then this defence will be limited

o 2. Illegality (ex turpi causa) Limited – if you’re a bank robber you can’t sue your fellow bank robber

for not having shot the cop BUT this is narrow – just because you’re doing something illegal

doesn’t mean you can’t have an action in negligenceo 3. Contributory negligence (partial defence)o 4. Inevitable accident?

No – this really isn’t a defence! It’s a historical anachronism that hasn’t gone away yet – a car accident

looks a lot like a battery and originally to defend against battery, had to argue inevitable accident (non intentional or negligent)

Later, car accidents were treated as two cars hitting each other (not just one party hitting the other), and may be non battery and non negligent as well

PURE PSYCHIATRIC HARM

A HISTORY (discussed in Devji)

Emotional disturbance itself will not be allowed as a tort action. Why not?o It’s more subjective than physical injury – it affects being vastly differentlyo We are responsible for our own wellbeing?o Compensating for the harm is very challenging, and there are perhaps

evidentiary issues? What about the possibility of junk science?o Is creating an emotional disturbance really a wrong? Is it actually harmful?o Floodgate! We’ll have many claims and also, we won’t be able to distinguish

between those that are worthwhile and those that aren’t – where would we

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaydraw the line?

Courts: there is such thing as psychiatric harm BUT we must be dealing with recognized illnesses. Just general emotional distress won’t be enough

o Seriously, likely long lasting would be more convincing Two questions re: the nature of this tort action:

o 1) DUTY: when do you have a duty to look after someone else’s mental wellbeing? And to take measures to prevent a person from suffering psychiatric harm? Do you have the same duty to peoples’ mental wellbeing as their physical well-being?

Dorset Yacht: YEAH – there’s a different set of circumstances where you’d recognize a duty to physical harm as you would to psychological harm

Post Cooper: when will you be in a close enough relationship that you owe a duty to not harm someone? When are you in a sufficiently close relationship that is reasonable and just to hold someone to such a duty?

Is proximity for psychiatric harm issues the same as for physical harm?

o 2) REMOTENESS: If you breach a duty to a person and create the risk that they will suffer physical injury, should you be liable if they instead suffer psychiatric harm? Pre Cooper, duty is used in remoteness language as well

WARNING! The courts of OFTEN confused the two questionso In Mustapha, the issues is REMOTENESS. SCC emphasizes the need

to keep them aparto Plaintiff has shown a negligent breach of duty – issue is whether the

defendant should be liable Another question:

o What if you breach your duty and cause physical harm, and then as part of that also cause psychiatric harm (ex. depression?)

If you’re liable for a breach of duty, causing harm, including psychiatric harm, then courts have little problem holding individuals responsible for the psychiatric harm (psychiatric harm caused by or concomitant with the physical harm)

o Courts will talk often about pure vs. impure (resulting from physical harm) psychiatric harm

There are 3 general types of cases we see commonly: 1. Duty case – when do I have a duty to pure psychiatric harms? To

look after someone else’s mental health? 2. Remoteness case – I have breached my duty, but instead of

causing physical harms it only caused psychiatric harms 3. Impure case – I have breached my duty, caused physical harms,

and also psychiatric harms 1. When do you owe a duty to look after someone else’s mental health?

o Pre-Cooper: part 2 Anns test says that reasonable foreseeability to decide liability, but we need control mechanisms

There are some cases that are deserving, and some that are noto Courts seem to think that the suddenness of shock is more likely to lead to

mental illness than a prolonged experience

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway Therefore the difference between a deserving and undeserving person

is whether is someone’s been subject to a sudden impact on the mind (deserving)

Devji v. Burnaby

Yasmin Devji is killed in a car accident, the family (father, mother, two sisters) are told by a police officer at their home and asked to go to the hospital to identify the deceased. They go almost immediately to the hospital, view the body, and then claim they suffered nervous shock injury

Devji v. Burnaby Victorian Rlwy Comrs. (para 18) P171: 1888 – negligence causing near

collision, leading to shock but no physical harm Breach of duty, but the only thing suffered is nervous shock Court: will not recognize the harms IF she had also suffered physical injury, then we’d consider your

nervous shock Court: concerns due to 1) floodgates and 2) wide field for

imaginary claims Dulieu (miscarriage case)

Pregnant woman frightened when a carriage is negligently driven through the window of the pub in which she is

o HELD: there cannot be recovery for nervous shock without immediate fear of personal injury to plaintiff

o This means that a defendant can be liable for psychiatric harms IF there’s an immediate fear of bodily harm

Remoteness case: duty was breached No physical injury, but found liability for nervous shock!

Hambrook Looks like a duty analysis Mother suffers shock at the sight of an accident in which one of her

children is injured due to defendant’s negligenceo Court: If you expose children to the dangers of the road, you

don’t owe a duty to all witnesses, but you do owe a duty to the MOTHER in addition to the other road users

o This is true even if the mothers are not exposed to physical danger

Hay Motor cyclist driving too fast, hits a vehicle. Hay looks at the

carnage, and while she wasn’t in immediate danger herself, suffers from shock

Miscarriage like Duliu Court: Loses on the ground of reasonable foreseeability Court’s Duty refinement: the test of liability for shock is

reasonable foreseeability of injury by shock! Held: no duty owed here – woman’s decision to look at the accident

was her own Chadwick

Rescuer, rescuing people during a train wreck Traumatized by role, sues the train Held: there’s a duty to rescuers, extends to post traumatic

stress even if they aren’t exposed to original risk and haven’t suffered physical harms

o There’s a duty to not only those who use trains, but also those who help save the train situation

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway McLoughlin v. O’Brian (Lord Wilberforce, HL)

Starting to use proximity to define the ambit of duty – introduces language of proximity when defining the ambit of the duty

FACTS: car accident, victims raced to hospital with serious injuries. Mother told about the accident, raced to the hospital, sees the kids in the aftermath of the accident.

o This is a parasitical claim: injury is caused to kids, but extends to problems suffered by parents etc.

HELD: where physical injury has been caused negligently to someone else, a duty will be owed to a limited class of people in regards to their mental health

o 1. Closeness of family tie (mother, not just witness) Your connection doesn’t have to be mother: could be

father, friend perhapso 2. Proximity to accident (witnessing the accident or its

immediate aftermath vs. hearing it on the telephone) Time and Space

o 3. Means by which the shock is caused Is there a difference between actually witnessing

something first hand vs. through a medium (TV etc.) In the UK: yes – there’s a dominant line between real

and virtual experienceso But the less the relationship, then the close you’ll have to be

to the accident 2 BCCAs that buy into McLoughlin 1) Beecham v. Hughes

Husband and wife in a car accident Husband suffers no injury, wife suffers severe physical injury,

husband has to take care of wife constantly, husband sinks into darkness and psychiatric care

Husband sues defendant and loseso Held: psychiatric harm is a result of sorrow as opposed

to as a result of the accident 2) Rhodes

Plaintiff heard about the accident on the radio, and thinks the son is on the train

Starts driving from Vancouver Island to the train wreck in Alberta

She’s not allowed to get close to the train, she’s diverted, she’s given false information, and eventually learns that son was killed on the train

Mother was sent the body parts by mail (although railway company was not responsible for that)

Held: she can’t recover because (unanimously) she didn’t experience fright, terror or horror at the scene at the time of the accident

o She head a long time to get to the train and get control of her emotions

o You must trace your psychiatric harm to fright/ terror/

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayhorror to have a successful action

There lacks the immediacy of the horror What is this immediacy all about? It’s about limiting claims

(see below)JUDGMENT The law expects people to be of ordinary fortitude

We don’t all have the same resilience But we want and expect people to take responsibility for

their own mental health – if they’re overly sensitive, we expect them to take measures to protect themselves (get a thicker skin)

The talk of ordinary fortitude suggests that we will recognize a duty to those people from whom you have taken away the opportunity to brace themselves against psychiatric impact

This arises from the shock, immediacy, close ties with the person getting injured

These tend to be easy cases There seems to be a sense about the impact of love on

your mental health We don’t expect you to brace yourself in a loving

relationship – since it’s an unconditional relationship, we expect to throw yourself in

We do expect you to brace yourself for harms that you might see against a stranger though, for ex.

The more gruesome the case, the more we are willing to hear your claim though – is the familial and loving relationship required?

o Unsure – but we have in the past been sympathetic to rescuers

Where, however, a person has the opportunity to brace themselves, they will be held to be the single author of the psychiatric harm

HELD: no liability

Mustapha v. Culligan

Mustapha is a customer of Culligan water. Sees flies in an unopened delivered bottle of water,

Remoteness case Everyone expected that this would answer all our questions re: the

differences between deserving and undeserving cases Two issues emerging in this case:

o 1) It seems that the court is saying that the thin skull rule does not apply when we are dealing with questions of liability – that it only applies when we are dealing with damages

o 2) Would the situation be different if Mustapha had consumed the fly, suffered gastroenteritis, and then suffered some psychiatric damage? AKA if some physical harm was suffered

Common law countries are in complete disagreement re: how we deal with these kinds of cases

o In UK, the courts adopted an idea of primary vs. secondary victims

Primary victim = Mustapha, a duty of care is owed to them and breached against them. He has suffered harm

The position of primary victims is very different than the

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayand Mustapha suffers psychiatric harm from the disgust he experiences

position of secondary victims – ex. the mother seeing the dead son

If the primary victim suffers harm, we should apply the “take your victim as you find them”, regardless if it’s psychiatric illnesses or physical illnesses alone

It’s only with secondary victims that we expect victims to be able to brace themselves, have ordinary fortitude etc.

o SCC: we’re not going to draw this line. We’re going to draw the normal principles of negligence liability and see where that gets us

In Mustapha, they don’t even go into the Cooper analysis – they just state that duty of manufacturer to customer is just a duty

o This is quite radical!o SCC could have said that up until now, the manufacturer has had

a duty only to guard against PHYSICAL harm! Not PSYCHIATRIC harm!

o SCC accepts that physical and psychiatric harms are the same thing (any harm)

The SCC also states (easily) that Culligan has a duty to prevent foreign objects from falling into the water

o Galloway: this is a bit too quick – we’re worried about animals, body parts, feces, falling into the water but we’re less worried about food colouring etc.

SCC states that, given there’s a breach and the suffering of recognized illness, the issue in this case is remoteness

o The SCC could have dealt with this under the thin skull rule BUT they don’t want to go in that direction

Don’t think it’s fair for Mustapha to succeedo SCC finds that this is not the type of injury that Culligan

risked by letting flies fall in the water AKA defendant is not responsible for every consequence,

just ones that occur in the ordinary course of events This is not the ordinary course of events because we expect

people to have an ordinary fortitude Thin skill doesn’t get off the ground because the

breach of duty has only caused one sort of injury, and that sort is one that we don’t think should be ordinarily compensable! This isn’t the kind of harm you risk by breaching your duty

This case deals with psychiatric injury – and Mustapha passes thato The law does not recognize upset disgust or anxiety as injury

Para 16: Tort imposes an obligation to compensate for harm done on a basis of reasonable foresight, not as insurance (Galloway: this is the turning point of the case)

o Just like in Wagon Mound where you don’t associate bunker oil with large fire

o Reading paragraph 16, do you get the idea that the thin skull rule is being rejected?

We ask whether a person of ordinary fortitude would suffer

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaythe psychiatric harm

o Is it significant that Mustapha had not suffered any harm? Had he swallowed the fly, suffered gastro-enteritis and then depression, would he be able to recover? (Compare the person who swallows the fly suffers gastro-enteritis and then has kidney failure because of a weak kidney)

In the “duty cases” we require people to brace themselves In the remoteness cases we expect the same - the failure of

Mustapha to brace himself is seen as an intervening factor! We’re adopting the secondary claim analysis – and we’re treating Mustapha like a secondary victim! We expect you to brace yourself, and you can’t blame those who have wronged you for your failure to brace yourself!

o We’re telling Mustapha that he has a sensitivity, and that his opportunity to brace himself has not been taken away just by a fly

o We identify Mustapha as the author of his problem We’re essentially saying that some claims are meritorious and some

are not to restrict what will get through – but it’s not really fair to draw it this way

SCC also says though that if the defendant knew the plaintiff had specific weaknesses (ex. if Culligan knew that Mustapha was sensitive to flies) then the ordinary fortitude requirement need not be applied strictly

o = in situations where there’s knowledgeo Galloway: how does that knowledge have an impact on the

explanation?! If we’re telling Mustapha that his weakness is something that he alone is responsible for (ie he is the intervener), then how does the knowledge mater??

Thin skull only gets off the ground when we find that the defendant is liable for something – not in determining whether there was a tort

PURE ECONOMIC LOSS

DUTY issue Economic loss that is not derivative of any physical harm (personal injury or

damages to one’s property) In Dorset Yacht we saw that Lord Reid note that if we based tort liability on the

reasonable foreseeability of financial losses, competitive markets would cease to function

o In the market, when someone wins, someone loses As with psychiatric harm, we can identify 2 questions:

o 1. When do you owe a duty to take steps to prevent others from suffering economic loss?

o 2. If you’ve breached a duty in relation to property damage but have only caused economic losses, when should you be liable?

Recognized categories1. D makes a negligent misstatement (= negligent misrepresentation). P relies

on it and suffers loss;

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway When do you owe a duty not to make a negligent mis-statement? Ex. Hedley Byrne. Someone trusts another for information, relies on it

to their economic detriment In these cases, courts may recognize liability for economic losses

under tort liability Hedley Byrne, Hercules

2. D provides that service for P’s benefit but does so negligently do that P does not benefit;

When do you owe a duty In these cases, there may be liability even if the plaintiff has not

relied on it to their detriment! Ex. if a lawyer is working for someone drafting their will, if the lawyer

negligently drafts the will so that their void, and the person who loses is the beneficiary under the will (not the testator)

Can the beneficiary sue the lawyer? Yes. And there need not be reliance in this situation until after the fact (after discovering the will is void)

Since the lawyer has undertaken to provide a service Overlaps with the first, but this category is very slim

3. D markets a dangerous good. P must spend money in order to render it safe; This is a remoteness case If you have marketed a dangerous good but before the danger

manifests itself the consumer discovers it and has to spend money to render the danger safe, there’s been no personal injury/ property damage

But given you’ve breached your duty, can you be liable for those expenses to render it safe?

4. D harms 3P’s prop. Relies on that property in order to make a profit. P alleges relational economic loss;

You don’t have a property interest, but you use someone else’s property

This is not normally a situation that gives rise to tort liability for your economic losses (this is quite clear now)

Ex. driver negligently hits hydro pole, knocks electricity out of homeowner’s house, and unable to carry on their business and make money. Can they sue the person who damaged the hydro pole? Probably not.

NEGLIGENT MISREPRESENTATIONHedley Byrne v. Heller

Easipower wants to buy advertising from P (on credit),

Held: the bank is not liable – they covered themselves with a disclaimer However, it’s not problematic that D didn’t know who would be using

the info Lord Reid rejects out of hand the argument that the D is not liable because it did not know the ID of the P

o D bank knew there was a client out there who would be relying on the information, and for contractual purposes

o Therefore Lord Reid treat it as a case of info directly given to the P

Dismisses the bank as agent as an important elemento Therefore leaves open the Q of “the degree of proximity”

to focus on the issue of economic loss due to negligent

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaybut P wants to ensure that Easipower is good for its obligations. P’s bank approached D bank to get credit rating reference for Easipower. D gave references that were not justified and P relied to their detriment

misrepresentation 1. P’s first argument: rely on Donague (p188)

o Lord Reid rejects the Donaghue and Stevenson ruing in this case a. There is a difference between words and actions

Ex. on social occasions people give opinions even when they see that others are likely to rely on their statements

They don’t take the same level of care that they would on a business occasion

Therefore no duty of care on these occasions b. A negligently made article will only cause on accident:

the level of proximity is easy to determine. On the other hand, words can be broadcast without consent. K can’t cover all these third parties

o Therefore there’s good sense behind the generality that there’s no liability for economic losses caused by negligent misstatements

2. For liability something more is needed: the D must have undertaken some responsibility (p. 189) or performed a gratuitous service (some authority that there can be liability there)

o The basic requirement is that a person, through their words in the context, is taking on responsibility

3. Lord Reid goes further to develop this legal principle: on its surface, Derry v. Peek seems to suggest that there can be liability only for fraudulent mistakes.

o However, the later cases indicate that courts have recognized innocent or negligent misrepresentation in cases of special relationships that give rise to liability for economic losses (p.190)

o What are these special relationships? All those relationship where the party seeking information

was relying on the other where 1) one party trusts/ relies on the other to exercise due case 2) it’s reasonable to do so because of the circumstances 3) where the party giving the information knew or ought to have known the other’s reliance

When all these elements are present, we conclude that the person has undertaken a responsibility!

Applying this to a professional setting: where D provides information to another who is relying and the circumstances make it reasonable to rely, D will be liable

How well does the undertaking analysis work?o If someone comes into your office for advice (and you know

you’re being trusted in your advice) you could: 1. Keep silent 2. Give an answer but make a statement that no

responsibility is accepted 3. Answer without qualification Therefore the choice is up to the person giving the

information, but if you choose step three then you’ve

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayaccepted responsibility!

o Therefore this doesn’t cover a social situation!o Would it cover a situation where P2 passes on the

information to P2? If the test is just reasonable foreseeability, then this might

be covered (where you get a professional opinion it is foreseeable that you will pass it on)

If you say the test is reasonable foreseeability plus reasonable reliance, then it may still be covered

BUT if the basis of the rule is that you have undertaken responsibility (“you may trust me on this”) then you have made no such statement to a 3P

o So maybe there are 2: reasonable reliance + special relationship and undertaking

Lord Morriso Voluntary undertaking can give rise to the duty to exercise

reasonable care where another person relieso Where possessor of special skills undertakes to exercise those

skills for the assistance of another who relies on them, a duty of care will arise (irrespective of contract)

o Where it is reasonable for others to rely on skills of a person and that person takes it upon himself to give information or allow it to be passed on to a person who, as he should know, will rely, then there is a duty of care.

What is the critical issue?o Is it the reliance and the reasonableness of reliance? Or is it the

assumption of responsibility?o In Hedley Burne it doesn’t matter since either will decide the caseo But in later cases, we find assumption of responsibility

without reliance Remember: there was on K between the banks

BG Checo v. BC Hydro

Tender for a K to erect transmission towers and to string transmission lines. BC Hydro claims that land

Can sue in both tort and K In Hedley there is no K – but what if there is a K?

o Central Trust – like Hedley Byrne. Professional relationship, defined by K. Can party due in tort and K? Yes

o Checo Tort liability and contractual liability can run concurrently Where they do, P may select the action that is more

advantageous, or sue in both Where D is under a tort duty to P, they may include that

duty as part of a K Three situations:

o Iacobucci’s dissent If parties specify a duty in L then whether or not it’s a tort

duty, P can only sue in K Tort liability will only apply if the K does not address the

required behaviouro LaForest/ McLachlin (majority)

No that’s too narrow – we should allow concurrency to

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaywill first be cleared by a third party. Checo bids and wins the K – then discovers the clearing hasn’t been done or has been done poorly, and that they’ll lose money by completing the K. BC Checo wants to sue in tort and K, even though K stipulates what the standard will be

allow the plaintiff to recover 1) Where a contract stipulates that a party will live up to his

tort responsibilities, then the other party may sue either in tort or contract.

2) Where the contract requires a person to go further than he would have to in tort, the tort duty remains open but it is likely that the party will sue in contract.

3) Where the contract allows a party to reduce or nullify liability in tort. Must be in clear terms.

An interesting twist in Checo! The last line: a contractual limitation that limits tort liability (even clearly) may not apply where the tort is independent of the K

o Therefore there’s a field that the K covers, but anything outside that field is fair tort game

o A mysterious provision! On the same day the court decides Cognos:

FACTS: P is an IT specialist, who is hired to the operation in Ottawa (made to feel very wanted by Cognos). P agrees to move from Calgary to Ottawa, and signs an employment K that can terminate him without cause

P is brought to Ottawa on the basis of negligent representations about the nature of the work he will be doing. Turns out that the project P is hired for is just a pipe dream (there’s no financing behind it), he is terminated and loses his job

HELD: The contract allowed him to be terminated without cause – this relates to the doing of the project

The representations made to make P leave Calgary relate to something independent of the employment K

La Forest and Iacobucci see the tort to be independent of the contract! Iacobucci: the representations relate to the nature and the reality of the project not to the amount of involvement.

Galloway: this is ridiculous, and a much too narrow way to construe the K!

Hercules Mgmt v. Ernst and Young

SCC 1997

Is an auditor liable to investors (shareholders) in a

Pre-Cooper case. During this time, McLachlin and (Laforest) REALLY disagreed about the meaning of tort law, and what proximity in tort law meant

o LaForest: instrumentalist view of tort – it’s meant to achieve certain social ends. Therefore we need to exercise controls to prevent it leaking to areas where it doesn’t serve a social purpose

o McLachlin: tort is about private relationships between parties, the notion of proximity is first and foremost to negligence

LaForest’s decision (Maj)o Adopts 2 part Anns Test

Prima facie duty of care at first stageo But claims that in cases of negligent misrep, most of the work will

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaycompany who relied on its negligently prepared audits of the company that were prepared for all shareholders?Some shareholders are claiming that they relied on the negligently prepared document in order to make further investments and that if Ernst and Young had done their job properly, the shareholders would have withdrawn their money, preventing the personal losses they’ve

be done at the second stage Social/ policy reasons for limiting/ recognizing tort liability

o Acknowledges there’s some argument that the Anns test doesn’t apply to negligent misrep cases, but he doesn’t accept this

Analysis: The concept of proximity is seen to be key Para 23 and first part of para 24 is consistent with but not as well

developed as the later statement in Cooper But they key to understanding proximity is identified in para 24

as relianceo The reliance in these circumstances is reasonable!o The D ought to reasonably foresee that P will rely on the

representation; the plaintiff’s reliance is in the particular circumstances reasonable

o Therefore, since these two elements are met, there’s a special relationship

When is reliance reasonable? Para 43: 5 indiciao 1) Def has direct financial interesto 2) Def was a professional or someone possessed of

special skillo 3) Advice provided in course of businesso 4) Given deliberately and not on a social occasion (old

Hedley Byrne notion)o 5) Given in response to a specific enquiry or request (fact

situation in Hedley Byrne)o LaForest: Don’t need to meet all five (here only first four

are met) because it’s not a test of reasonableness, it’s just indicating where negligence is reasonable vs. where it is not

Emphasizing not the relationship of the parties, but the professionalness of the services

How is this different from Hedley Byrne?o In Hedley: if you’re a professional – you have 3 choices as to what

you can do Don’t give info Qualify the info Make unqualified statement

o Galloway: Hedley suggests that it’s easy for a person putting info into the public to avoid tort liability just by adding a disclaimer (“this info can only be used for limited purposes” ex. just for one client)

BUT it’s up to the person providing the information to make the choice on what to do!!

o But there is nothing in the analysis about Ernst and Young undertaking or assuming responsibility for the individuals’ losses!

Usually when we think undertaking, we thing about someone asking “can I trust you” and you saying “yes”

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaysuffered. Therefore given there’s a duty to shareholders generally, can individuals sue when they experience personal losses

o LaForest: no! The burden shouldn’t be on the information provider! To meet Pt 1 of the Ann’s Test, just have to be in a situation where economic loss is reasonably forseeable and the other party is reasonably relying

Primary basis on reasonable reliance But now leaving it open for individuals to be liable for

general statements they release into the public, so then creating the control mechanisms

Therefore saying that there’s a limited amount of people who can rely on Ernst and Young. Court must create the limitations, via proximity

Lord Reid would say different: he’d say that Ernst and Young could limit their own liability with a disclaimer

o So we move onto Pt 2 of the Anns Test There are potentially enormous social costs – the number of

tort actions will explode. So we introduce 2 control mechanisms:

1) Only owe duty of care to individuals for whom you made the statements

o You know their identity or the class to which they belong

2) Only owe duty of care if the information is used for the very purpose for which it was created

o For LaForest, this is the easy way to deal with the solution! But by emphasizing reasonable reliance as the key to the index of when there’s a duty of care, he may be causing problems for himself later on

In this case, the audit wasn’t created for individuals to make investments although it’s reasonable for people to use it that way. It was created so that shareholders as a group can make decisions re: the management of the company.

HELD: therefore no liability in this case Galloway:

o This is a convoluted way of looking at a problem! That could’ve been dealt with easily under the Lord Reid method!

o Instead adopts this: 1) broad notion of proximity, take reasonable reliance loosely 2) limit liability for social reasons

o This might end up being a good answer but it creates TWO PROBLEMS: ISSUE 1 WITH HERCULES: if the basis of liability is the reasonable reliance of the

plaintiffs, than can you ever (in a neg misrep case) have contributory negligence?

o You should be able to determine that the defendant is still liable, but only so for a percentage or proportion of the losses

If we base it on the reasonable reliance of the plaintiff, though, this becomes no longer available

o If the reliance was unreasonable then there would be no tort. The court in Avco tries to resolve the issue – says that contributory negligence should still

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaybe available

There can be reasonable reliance, and also responsibility for own downfall to some extent

Ex. Business owner, gets a reference letter giving a great reference to a worker, but the writer gives the reference negligently (ex. they think they’re writing about someone else) and business owner hires them, who turns out to be an embezeller

1) I was reasonable to rely on the reference writer 2) But I might be contributorily negligent for not protecting my

business against embezellerso This isn’t too troubling

Avco Financial v. Norman

Contributory negligence is still available!

NEGLIGENT PROVISION OF A SERVICE

ISSUE 2 WITH HERCULES: what if the person harmed is not the person who relied (the person to who the statement is made) but the person about whom the statement is made??

Haskett Creditor wants to know the person’s creditworthiness. Bank says they aren’t creditworthy when they actually are, have to pay a lot more to borrow, and experience losses, due to the negligence misstatement even though they’re not relying upon it

Hercules decision based on reliance can’t deal with this case! Because plaintiff hasn’t relied but there should still be liability nonetheless!

Court suggests that reliance is not necessaryUse the Cooper analysis instead:

1) is this case analogous to an established category of case where we recognize liability?

2) if this isn’t a recognized level, the relationship here is sufficiently proximate to fairly create a new category hold there’s liability (recognizing negligent misrepresentation not based on reliance)

o They’re saying reliance is not necessary – that this is analogous even without reliance

o Monumental! Note the equivocation – the situation is analogous to the causes of action where liability for negligent misrepresentation has been recognized.

o Court relies on Feldthusen in Cognos (who LaForest in Hercules relied on): Reliance not necessary – para 33 of Haskett

o The key is a special relationship (not reliance)

o Para 34 the representor has effectively assumed responsibility because of the potential harm.

Where assumed or imposed liability exists (para 39)

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway = ignore later precedent of the SCC

and using a prior precedent 3) are there any social/ policy reasons to not

recognize this new category in 2)? No – not in this case

o Indeterminacy not a problem here. Knowledge and Control (para 45)

o Are other legal remedies available, such that we don’t have to extend tort law into an area where it’s not necessary?

Can’t this be treated under the law of defamation?

Court: no – the law of defamation is insufficient (para 50), it’s too broad and has developed in a way that doesn’t sufficiently protect plaintiffs

Allows defences: politicians and judges have “qualified privilege” against defamation, doctrine of qualified privilege also allows employers to give references without being subject to tort liability for negligence

o Para 55 recognition that it may be problematic to recognize a tort duty in commercial negotiations involving sophisticated parties. This seems to be the basis of 2008 decision in Design Services (materials p 261)

Court: this is not a situation in which the parties are in complex negotiations

This is different Galloways conclusion re: negligent provision of a service

o Where a person has assumed responsibility for another person’s economic well-being, they are responsible when they exercise that responsibility negligently.

o The fact that the subject of a credit report is totally vulnerable and that “fairness is a clear legislative imperative” allow the court to hold that responsibility is assumed.

o Same logic as in Cf. Childs! Implied responsibilities of those involved in a commercial or public venture.

If you’re engaged in a commercial/public activity on which other people are completely dependent, then you owe them a duty

We’re dealing with a situation in which one party has all the power and the other all the vulnerability = assumption of responsibility

o The lawyer cases also back this up! This seems to apply in the case of the lawyer and the disappointed

beneficiary The lawyer when undertaking to draft a will is assuming responsibility

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayover the economic interests of the beneficiary

Even though it is not a negligent misrep case, the same principle should apply to the negligent provision of a service due not to reliance, but due to dependence

As in Hedley Byrne an analogy is drawn with fiduciary relationships Plus the beneficiary is “wholly dependent” on the solicitor (para 39)

= extraordinary counter strategy, against the LaForest decision in the SCC!o Negligent misrep vs. negligent provision of a service are competing now –

perhaps two forms of tort law are emerging?o How are these treated in the future? How does BDC adopt it?

Wilhelm v. Hickson

HELD: lawyers owe a duty of care to beneficiaries named in a will when drawing and executing a will, breach of which may render him/her liable to pay damages suffered by the beneficiaries as a result of the breach

Even though the beneficiary did not relyBDC v. Hofstrand Farms

Government takes charge of a document, has nothing to lose if the document is late but if the plaintiff has it delivered late, then the plaintiff’s contracting partner can back out of the contractPlaintiff needs the contract

Government assures to take charge and offers to deliver the document

o BDC takes responsibility to deliver the document from the government, but don’t know why it’s being delivered and why it has to be on time

HELD: no liabilityo 1) BDC has no knowledge or constructive

knowledge that the party exists. Unless its being told about a third party or has constructive knowledge, can’t owe them a duty

Distinguished this from Haskett and the lawyer cases (Wilhelm)

o 2) There is no reliance. The person allowing the government to go to the courier company isn’t relying itself on the courier company

Galloway: this is weak And adds to the idea that these kinds of

cases are not about reliance at allNEGLIGENT SUPPLY OF A SHODDY PRODUCT

Where a manufacturer sells a shoddy good that doesn’t work, the consumer is out of pocket (must buy another or must get a repair). Tort law will not usually compensate leaving it to the law of contract.

However where the product is dangerous (risk of personal injury/ property damage), and the consumer pays money to render it safe, Winnipeg Condo suggests that tort law may step in.

o Galloway: we don’t know how broad a precedent Winnipeg Condo stands for though

o This is the most general message that could come from Winnipeg Condoo Why? By producing/ marketing a dangerous product, you’ve breached a duty

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayto your consumer. Will you be held liable if the damages are purely economic losses (different in kind than the losses you would have expected)?

o Galloway: this may be a case about the construction industry and who should bear the risks in a construction industry – so is it about negligently built buildings or dangerous products? The judgment doesn’t say.

Galloway: this is super problematic – an even deeper hole for us to fall into Laforest is attempting to deal with liability for economic losses by looking at torts

from the instrumentalist point of viewo This view should be doubted – and this is the prime example!!

Winnipeg Condo

Company builds condo so negligently that it becomes dangerous

1) There is some question whether the damage suffered is pure economic loss v. property damage (para 14-15) (Negligently installed ties caused damage to cladding)

o Addressed via the complex structure argumento The argument put forward is that the damages in this case is

actual property damage, and not pure economic losses Ex. cladding falls off the building because of the negligently

manufactured metal ties If it can be held that a latent defect of a specific part of the

building, that problematic piece is a property damage issue, not pure economic loss

AKA dividing the building into its constituent harmso Laforest

No – this is one building, all part of the same thing that is one entity and has an identity

What makes the ties and cladding part of the building is that they’re interdependent – one is fully dependent on another and it forms one thing

A furnace, though, can be taken out – it’s new property. If a building burns down due to the furnace, then that’s property damage

Therefore economic losses HELD: the individual can turn to the original builder and sue

them for the economic losses incurred to negate the dangero Laforet seems to say often that there’s good reason to not extend

liability to economic losses – try to box off and limit this area as much as possible

o AND YET for reasons of social policy, more than willing to recognize economic losses in the Winnipeg condo case, and this does not open the door to indeterminacy

RATIO - LaForest: Assuming the losses are economic, para 21 suggests that a person participating in the construction of a large and permanent structure that has the capacity to cause serious damage to other persons should be held to a reasonable standard of care

Galloway: he does so for social/ policy reasons, hasn’t really thought through what the consequences are

1) The first argument seems to be based on social responsibility

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway(undertaking to build a permanent building) that gives rise to liability to the public, rather than on any relationship with the future owners.

o Buildings have a long life: duty not only to original inhabitant but to future inhabitants (there are the members of the public likely to be affected) too (para 35)

This is who bears the risk Galloway: but I thought the duty was actually to the

owners! What if the owners of the building are not the inhabitants?

The owners are not at risk of being hurt … If the building falls apart, the owners are only

suffering economic loss Are the builders are liable for that??

Laforest isn’t super helpful here 2) Rivtow Marine Argument (follows dissent – it’s efficient to allow

people to sue original contractor)o FACTS: Crane is faulty (has a crack), manufacturer informs

charter, costs money to repairo Dissent: there should be liability for repair

“It follows that the contractor should also be held liable where the damage is discovered and the owner wishes to mitigate the damages” (para 36)

Does it?o ISSUE WITH ANALOGIZING RIVTOW MARINE: there’s a

difference between the owner (responsible for losses) and the inhabitants (liable to suffer the physical damage if we let it unfold

Therefore there’s a difference between allowing certain people to be hurt, and therefore owing a duty to an owner to compensate them

This doesn’t follow if these aren’t the same people Consider: the owner is informed of the potential danger.

The owner is now responsible for preventing harms to third people (ex. those living there). If the owner does nothing, the third party people could go after (joint and severably) either the owner or the manufacturer of the building

Laforet: it follows as a matter of course that we should hold the contractor liable to the owner. If we didn’t, then the owner would have no incentive to fix the damages and prevent harm to third parties. We want that – the deterrence of disaster

BUT Galloway: if the owner can be jointly and severably liable to third party harms, then they do have greater incentive to repair, regardless of whether they get money back form the contractors

Laforet: consider a second owner (contractors build it, first owner, sell it to second owner). If second owner finds that the building will collapse and we won’t impose liability on the contractor, there will be no incentive to prevent danger

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayoccurring

BUT Galloway: there is incentive to repair! They could be liable!

o Therefore there’s something weird going on UK courts: People who buy products/ buildings that are

defective, they have just lost out – they made a poor investment

If you’ve bought a dangerous product and you know it can cause harm, it’s your responsible for discarding it

Laforet: housing is different than this, because it would be terribly inefficient to require people to discard houses. We shouldn’t regard a dangerous building as a broken pen

Laforet: when people are in the largest investment of their life and it’s not a sophisticated commercial transaction, we should offer them protection from losses, through tort law

ANNS TEST PART 2o Laforet claims that there is no issue of indeterminancy, because

we limit claims to those of “real and substantial danger” for the “useful life of a building”

What is a reason and substantial danger? Cladding falling off if clearly dangerous. But what about building leaks, mould, bad smells, poor air circulation …

Inhabitability is not just a lack of danger though, it involves a level of pleasant and healthy life!!

What is the “useful life of a building”? This is actually an onus of proof issue Liability on owner to show that at the time the

building was being constructed, it was foreseeable the danger would occur

o The longer the building exists, the harder it is to show that the defect is caused by design flaw, not wear and tear

Laforet is not treating this as a time span issue (ex. 30 years) necessarily

Problems with this judgment:o Laforet does equivocate between homeowners and

building owners! The reasons behind Laforet’s decision is protecting

vulnerable people Is the duty owed to a non-inhabiting investor though?

o Is this a case about buildings or is it a case about dangerous products?

o He creates a 2 tier system: original owner who buys it from builder may not be able to sue because there might be a limited liability clause in their contract

But, if this individual sells to someone else, then that second party may be able to sue!

o This actually discourages people form making fast repairs! Something may not be a real and substantial danger yet –

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaybut the contractors won’t be liable under it becomes a real and substantial danger

Therefore instead of fixing mould (at own cost), may wait until the mould takes over, when it becomes dangerous, to charge the contractor

Galloway: pure economic losses in Canada have been shaped primarily by LaForet,

but his view of tort liability and the purpose of tort is very different than McLachlin (who shaped the Cooper analysis)

o We adopt the McLachlin template generallyo So there seems to be a fight to get Laforet model into the law

There in the negligent misrepresentation case, liability for repairs of dangerous problems, LaForet’s voice is very strong

Hasegawa v. Pepsi

Pepsi bottles water for AquaP buys water from Aqua for sale in Japan, but because of impurity it is unsellable (Pepsi has allowed mould in the water, and Japanese health authority refuse to allow it)

HELD:o There was not enough evidence here that the product was

dangerouso If the product was dangerous and not just impure (ex. if there

was poison in it) then Hasegawa might have an action against Pepsi

o But in this case, action not available RATIO: for a manufacturer to be responsible for a product, it

must be dangerous, not just shoddy Rejects Junior Books as an authority in BC law

o Galloway: this it unfortunate and very sad because the analysis in junior books is very much like Mclachlin’s take on tort in Cooper, and worth looking at

o RATIO: for a manufacturer to be responsible, there doesn’t have to be a contract, a close relationship will suffice

o FACTS: JB enters into K with contractor to building factor Contractor gets into touch with Veitchi, the floor specialist,

because JB suggests they do so Therefore flooring is subcontracted to Veitchi Veitchi and JB are in contact during the building by

the contractoro There is no K between JB and Veitchi, but there

is a close relationship developing between commercial actors

o Not negotiating rights/ obligations, but discussing and trying to resolve problems

o Not done so in contractual terms though Flooring turned out to be substandard – not

dangerous but didn’t meet JB’s needs (defective)o No contract, but had been in a close

relationship When floor needs repairing, contractor is out of

businesso Argues that relationship between JB and Veitchi

was not contractual, it was close enough to

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowaygive rise to a duty of care

Accepted by House of Lords! And J. Wilson in Kamloops.

Rivtow Martineo FACTS: M – D – Charter (Rivtow Marine)o Crane hired for the logging industryo Rivtow Marine in K with distributor, and they are contacting the

manufacturer all the time for advice about use of the crane Therefore there’s a very close non contractual business

relationship between the M and Rivtow Marine Therefor through conversations get to know a lot about the

seasonal aspect of logging, of the nature of Rivtow Marine’s business

o At the low season, manufacturer finds out that another one of their cranes has cracked causing great danger

Low season is a good time to warn However, M is worried about liability so doesn’t warn By the time M warns, it’s high season

o Rivtow marine suffers great losses taking the crane out of service in the high season

o Rivtow argues that they should recover the economic losses that they incurred due to losses in high season versus low season

o HELD: YES – manufacturer is held liable for the losses Manufacturers in a very close relationship with the user of

the product – you can be held liable for the economic losses This relationship is independent of K and it’s close enough

that it can be acted on! Therefore business people can take on obligations in

tort just by establishing a tort obligation! = duty to other individuals in business where a close

relationship has been undertaken! In Hasegawa though, the BCCA is saying that business is a hardline

between having contractual rights or not – a relationship between business people will not lead to tort liability. Have to go back on relying on K

o Galloway: it’s sad that we can’t rely on talking about our needs and products and communication between parties any more. Now, we do have to rely on negotiation and contracts.

RELATIONAL ECONOMIC LOSS

The economic losses that third parties suffer when a second party has been injured (physically or property damage by defendant) but economic consequences borne by third party

o UK: absolutely not!!o Canada: maybe

CNR v. Norsk

ISSUE: can railway sue barge? The economic losses are suffered by a different party than the property losses are suffered by. If we recognize

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway

SCC 1992

Bridge, barge, and railway company. K between bridge and railway company. Barge steerer is drunk, hits the bridge, bridge is damaged. Railway loses a lot of money because it can’t go over the bridge, but it doesn’t own the bridge company

the economic losses, where will we stop in the future? We’re hoping to see a judgment that will clear up the extend of liability for economic losses – instead we get 3+3+1 and no majority.

Note: if bridge and railway were owned by the same company, then property harm and the economic loss tied to the property harm would be no issue – tort liability would be found

Laforest (+2): NO! Proximity is a hopeless concept with no meaning. Pragmatically, we need to look at social policy reasons

o We need a clear and certain rule! We can’t allow property owners/ those who use another’s property to go about business not knowing whether they should insure themselves

o Certainty would be provided by a dominant exclusionary rule (not recognizing parasitic/ relationship economic losses) with precise exceptions

o We already have precise islands where economic loss to 3rd parties have been recognized in the past – they’re technical, well defined:

Ex. 1) where P has a possessory interest, Issue: who is a stakeholder?

2) Where there’s a joint venture (individuals coming together and sharing the same objectives, out to achieve the same ends but rely on property owned by 1 party),

This is complicated, but it has gained traction in the law

If damage done to property of one, done to both parties

General averaging cases (Galloway – this is really arcane, from maritime law):

Ship owners and cargo owners own different property, but enter into commercial arrangements in which if there’s damage done to the boat, the cost of getting the boat (and cargo) would be split proportionally between boat owner and cargo owners

= proportionality of sharing losses, to get the result of safety

If one boat owners crashed into another causing damage, the damaging boat owner owes the damaged boat owner the money to be split among ship owner and cargo owners, even if no cargo is harmed

Transferred loss cases Prior to ownership passing, non-owners are

responsible for damage to the property, ex. construction steel

And that’s it! Certainty is our prime interest. McLachlin (+2): Yes. Outlines the prototype for Cooper. First

let’s look at the relationship between the parties and deal with it using proximity. A flexible solution is needed (to avoid arbitrary delineations)

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayo Let’s look into the notion of a joint venture, and take a realistic

look at what a property interest means There’s little difference between a user with property

interest and an investor in the bridge So let’s actually look at how merged the economic interests

are Liability for econ. Loss has been recognized in a joint

venture situation. It is fair to extend that class of cases to cover this one:

CN supplied materials, inspection, consulting services and was recognized in the periodic negotiations surrounding the closure of the bridge

Bridge integral to railway system For practical purposes, P’s position is

indistinguishable from the P owner’s! The pragmatic arguments: insurance cots, loss spreading

and K allocation of risks – rests on questionable assumptions

Stevens: yes, there is liability because the barge should have known about the train

Laforest – we need to meet an amicable arrangement!! And wins the day through Bow Valley. Then loses the war through Cooper.

Caltex oil case (Australia)o Similar to Norsko Boat hits the pipeline, damaging it (property damage to the

pipeline), oil going into the watero The company that owned the pipeline was not the company that

used it to transport oilo Can the oil company sue the pipeline?

Bow Valley

Bow Valley and Husky Oil get together and set up a 3rd company offshore (BV Bermuda) in order to get a govt grant (a tax dodge). BVB hires J to build an oil rig. On oil rig, there’s a heat transferer, with a lot of manufacturer’s defects (J in K with heat transfer builder). Rig goes on fire – property damage. In K, agreement that

Allows LaForest and McLachlin the opportunity to form a compromise

o It seems that McLachlin has turned her back on the idea of a flexible “just” solution – looks like a political compromise

She may have been persuaded that her hope for a role for tort law in sophisticated business relations is problematic

There may have been a tradeoff – keeping the proximity approach in exchange for finding no liability

Galloway: the situation became worse. At the end though, it seems that LaForest has won the day

ISSUE: does manufacturer of heat transferer owe a duty to J to own a duty of fire? YES. Do they owe a duty to the rig (BVB) to warn it may go on fire? YES. Do they have a duty to warn those that only have an economic interest in the rig (BV and HO) that it may go on fire? Majority: no

McLachlin

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayeven if BVB goes out of commission, BV and HO will still pay the expenses

o Because it is foreseeable that people will suffer financially as a result of any fire, you owe them a duty to warn about that danger

Proximity (looking at the relationship) is out the door – collapsing foreseeability and proximity into Anns test Part 1 (met)

o However, this would lead to an indeterminate solution and floodgates issue under Anns test Part 2

o Accepts LaForest’s general rule of exclusion for economic losses, to stop indeterminate liability at Anns Part 2

o Why did we get here? When you are dealing with multi-billion dollar transactions and sophisticated parties setting up large corporate shells, you don’t need tort law as a back up for K law

The parties want certainty Parties want K values to operate, and

tort values to not interfere Given that there’s no vulnerable

parties here and only people who should know what they’re doing, we don’t need tort law here

o If we’re building a building and one party is homeowners, we may need tort law to protect homeowners

BUT once you’ve tied your economic interests to someone else’s property, you’re not longer a vulnerable person that tort wants to protect

o True McLachlin (doesn’t come out here): we should recognize that there can be a source of obligation not tied to vulnerability but instead tied to honourable interactions and dealings and the relationships we form – that’s a very different decision than here

NEW CATEGORIES! Design services case

o FACTS: a building is about to be built by government At tendering stage, party puts in a bid for themselves, even though it

would involves lots of subcontractors Awards contract to a party not entitled to be selected Suit by all the subcontractors that were economically dependent on

the bid being accepted Claiming the government has not just wronged the bidder, has

harmed the subcontracting individualso HELD: no

Sharon Zheng | LAW 108C | Spring 2012| Donald Galloway Instead of being a dependent company, could have become a joint

venture with a bidder, in a contractual relationship Court says that in declining to create K rights – if you’re interested, you

should have been formal about ito Court seems to be saying that we don’t want to make tort liability

available to those who are in sophisticated commercial transactions – they can protect themselves through K

o If a party in an economic relationship has the opportunity to become a contractual party in the cases, then they should do so because the consequences of not doing so would be unknown

WHEN SHOULD THE GOVERNMENT BE SUBJECT TO TORT LAW? 1) We have a regime of controlling government (the public law regime) which

requires public officials to stay within the bounds of their legal authorityo Where govt fails to respect an individual’s rights, dignity, humanity etc., can

seek an order from the courts based upon a public wrong Need not rely on the same notion of fault, if they move out of their

public law power (have done something they have no legal authority to do)

o = TORT LAW NOT NECESSARY – PUBLIC LAW MODEL OF WRONGDOING 2) However, government may provide goods and services like private

actors, which may expose people/ their property to danger Seems acceptable to ask whether there is a relationship of proximity in

these situationso = TORT LAW NECESSARY – TORT MODEL OF WRONGDOING

In Cooper, even though McLachlin opens the notion of duty of care as being based on proximity, the court recognized this tension

o Even at the first stage of the Anns test there is a tension between private and public duties

If the issue is a mix of 1) and 2), which model of wrongdoing should be used?!

THE TORT OF GOVERNMENT LIABILITYJust

Government has taken charge of inspecting highway 99 and trying to negate the danger of rock falls on the

Arguments:o Arg Driver: breach of duty of care giving rise to this injury, govt

should be liableo Govt: we own no liability here because the decision is a political

one about how we should inspect the cliffs that abut the road We act in a political capacity when we send people to

inspect cliffs – as long as they stay within the boundaries of their legal powers, their decisions must be unassailable

Do we apply private or public law model?o Cory borrows concept from public law: we can distinguish

between good faith decisions and bad faith decisions by government actors

HELD: case sent back to determine standard of care Not focusing on proximity re: the government issue. Instead:

o 1) Is the standard of care we expect from government the same

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayroad. Rock fall occurs, hit a car, kill one person and injures the other

as it would be for private actors No – the standard is different!

o 2) Whether there are policy reasons not to recognize a duty (Anns 2)

Government status can be a reason to immunize a party from tort liability

Therefore less of a focus on duty, and greater on standard and policy reasons

Cites Barrat: roads inspected for potholes once every two weeks – day after checking, someone hits a pothole and has an accident. Court draws distinction between negligent inspection (grounds for liability) and a negligent regime of inspection (immune from liability – political decision). Not for the court to tell legislature how much the roads should be inspected

o Cory: this is problematic! Surely a decision to inspect every 5 years would be subject to liability …

o Tie this in with what he says later about bad faith – because a decision to inspect every 5 years would be a bad faith decision!

Bad faith is not about dishonesty, malice (what we usually think of) – it’s the idea that govt have acted for reasons that are way beyond the reasons it’s entitled to act for

If you set up a municipality and say the municipality has the right to inspect roads (taking it on and preventing private actors from coming in), you can’t say that there’s a duty only to inspect certain roads, or to inspect every 5 years – because then you’re not really taking on the power!

Kind of like the positive duty argument where you have no duty to rescue, but if you do decide to rescue, you have to follow through because you’ve deprived the person of help from other rescuers

Cory: governments should be able to make policy decisions free from judicial interference

o 1) BUT must be good faith decisions (can’t exercise policy or fail to exercise policy – Kamloops),

o 3) AND not every government decision is a policy decision – some are operational – these are held to liability but lower standard

Challenge is distinguishing between policy and operational decisions

From Heyman: no duty of care in relation to decisions which involve or are dictacted by financial, economic, social or political factors or constraints (P. 273 at the bottom)

Trying to articulate where we want govt to be held responsible to the electorate vs. the courts?

But it may be otherwise where the crt is assessing action/inaction that is the product of administrative directive

o Lighthouse example: economic decision that money formerly

Sharon Zheng | LAW 108C | Spring 2012| Donald Gallowayspent on lighthouse inspection should now be diverted elsewhere is political and unassailable

This would be a bona fide exercise of discretion If the decision was not bona fide (abusing discretion,

not based on appropriate reasons), the implication is that it can be subject to tort scrutiny

Galloway: Two issues:

o 1) Notion of bona fide is hard to define How to you know when and administration is stepping out

of its bounds?o 2) The introduction of a new policy may require some public

announcement because of reliance issues Galloway: giving far too much power to govt decision

making We may see governments making valid political decisions But if govt hasn’t treated members of society well enough

by informing them of political decisions, isn’t there a tort? Ex. what if you’re in a boat when the government

decides to cut the lighthouse, and you were relying on it?

However, in Cooper and later in Hill, using proximity to address these tensions

Kamloops

Bad faith policy