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Negligence - Proximity

. Mahendran v. 9660143 Canada Inc.

In Mahendran v. 9660143 Canada Inc. (Ont CA, 2022) the Court of Appeal considers negligence law regarding duty of care, specifically whether a relationship of proximity exists:
[10] The issue of whether Nationwide owes the appellants a duty of care turns on whether they are in a special relationship of proximity. In Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, [2017] 2 S.C.R. 855, at para. 30, the Supreme Court confirmed that in cases of pure economic loss arising from negligent misrepresentation or performance of a service, the two determinative factors for establishing a special relationship are:
the defendant’s undertaking and the plaintiff’s reliance. Where the defendant undertakes to provide a representation or service in circumstances that invite the plaintiff’s reasonable reliance, the defendant becomes obligated to take reasonable care. And, the plaintiff has a right to rely on the defendant’s undertaking to do so. [Emphasis added.]
....

[12] As noted by the motion judge, the finding that Nationwide does not owe the appellants a duty of care when retained to appraise the property by the buyer’s lender is consistent with the decision in Barkley v. Tier 1 Capital Management Inc., 2018 ONSC 1956, aff’d 2019 ONCA 54.
. Jayco Inc. v. Canada (Revenue Agency)

In Jayco Inc. v. Canada (Revenue Agency) (Ont CA, 2022) the Court of Appeal considered the negligence duty of care and proximity of the federal Crown to statutory trustees required to collect GST/HST:
Does the CRA owe a duty of care in relation to its administrative and audit functions?

[19] The motion judge held that there was ample case law rejecting the proximity required to formulate a private law duty of care between the CRA and taxpayers facing an audit. While he noted that there could be a private law duty of care where the CRA undertook a criminal investigation, an investigator of criminal offences did not have the same relationship of an auditor to a taxpayer while carrying out administrative duties in an audit. This conclusion is so clearly right that the motion judge came to the correct decision in dismissing Jayco’s duty of care claim pursuant to r. 21.1(1)(b).

[20] Resolution of this issue turns on whether there is sufficient proximity between a taxpayer and the CRA to establish a prima facie duty of care. The relationship between the parties and broad questions of policy are relevant here: Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, at para. 30. The second stage of the inquiry asks whether there are residual policy considerations which should negate or limit that duty of care.

[21] Where a statutory regulator is mandated to protect the public interest, the creation of a private law duty of care may conflict with the regulator’s public duties. As noted in Imperial Tobacco, at paras. 43-45:
A complicating factor is the role that legislation should play when determining if a government actor owed a prima facie duty of care. Two situations may be distinguished. The first is the situation where the alleged duty of care is said to arise explicitly or by implication from the statutory scheme. The second is the situation where the duty of care is alleged to arise from interactions between the claimant and the government, and is not negated by the statute.

The argument in the first kind of case is that the statute itself creates a private relationship of proximity giving rise to a prima facie duty of care. It may be difficult to find that a statute creates sufficient proximity to give rise to a duty of care. Some statutes may impose duties on state actors with respect to particular claimants. However, more often, statutes are aimed at public goods, like regulating an industry (Cooper), or removing children from harmful environments (Syl Apps). In such cases, it may be difficult to infer that the legislature intended to create private law tort duties to claimants. This may be even more difficult if the recognition of a private law duty would conflict with the public authority’s duty to the public: see, e.g., Cooper and Syl Apps. As stated in Syl Apps, “[w]here an alleged duty of care is found to conflict with an overarching statutory or public duty, this may constitute a compelling policy reason for refusing to find proximity” (at para. 28; see also Fullowka v. Pinkerton’s of Canada Ltd., 2010 SCC 5, [2010] 1 S.C.R. 132, at para. 39).

The second situation is where the proximity essential to the private duty of care is alleged to arise from a series of specific interactions between the government and the claimant. The argument in these cases is that the government has, through its conduct, entered into a special relationship with the plaintiff sufficient to establish the necessary proximity for a duty of care. In these cases, the governing statutes are still relevant to the analysis. For instance, if a finding of proximity would conflict with the state’s general public duty established by the statute, the court may hold that no proximity arises: Syl Apps; see also Heaslip Estate v. Mansfield Ski Club Inc., 2009 ONCA 594, 96 O.R. (3d) 401. However, the factor that gives rise to a duty of care in these types of cases is the specific interactions between the government actor and the claimant.
[22] Here, the mandate of the CRA is to ensure that taxpayers pay taxes that are lawfully owed, for the benefit of all taxpayers and the country as a whole. The ETA establishes a comprehensive regime to deal with disputes over taxes owing, including appeals and judicial review. Recognition of a private law duty here would conflict with the agency’s duty to the public; there is nothing in the legislative scheme to suggest that such a duty was contemplated. The administrative regime for enforcement of the GST/HST is broadly similar to that in place to enforce the ITA.

[23] There are many instances where courts have held that broad statutory public duties foreclose a private law duty of care. As noted in Reference re Broome v. Prince Edward Island, 2010 SCC 11, [2010] 1 S.C.R. 360, such public duties do not generally, in and of themselves, give rise to private law duties of care: at para. 13; see also Eliopoulos v. Ontario (Minister of Health & Long Term Care) (2006), 2006 CanLII 37121 (ON CA), 82 O.R. (3d) 321 (Ont. C.A.); and River Valley Poultry Farm Ltd. v. Canada (Attorney General), 2009 ONCA 326, 95 O.R. (3d) 1.

[24] Nor is there anything in the specific relationship between the appellant and the CRA that suggests that a finding of sufficient proximity would be appropriate. That the CRA was ultimately shown to have been wrong to assess the appellant for the taxes it claimed is not enough.

[25] The appellant argues that McCreight v. Canada (Attorney General), 2013 ONCA 483, 116 O.R. (3d) 429 holds that in some circumstances, revenue authorities will owe a duty of care to a taxpayer.

[26] In McCreight, the CRA was concerned that taxpayers and their accountants were applying for fraudulent research and development credits. It obtained search warrants for the homes and businesses of the taxpayers, their lawyers and accountants. It was authorized to retain the materials seized until July 1999. It had not completed its examination of the materials by then and applied for an extension. It was ordered to return the original materials by November 9, 1999.

[27] On November 9, 1999, criminal charges were laid against various taxpayers and advisors alleging fraud and conspiracy. There was a judicial finding that the information in support of the charges was sworn “primarily to retain possession of the seized documents”: at para. 6. The criminal charges were ended by discharges, withdrawals or stays.

[28] The plaintiffs sued for a variety of causes of action, including negligence. This court overturned the motion judge’s ruling that it was plain and obvious that the CRA investigator owed no duty of care to the plaintiffs, at paras. 60-62:
In my view, in this case, the motion judge erred in concluding that it was plain and obvious that the respondent CRA investigators did not owe a duty of care to McCreight and Skinner, policy considerations would foreclose such a duty in any event and, therefore, the negligence claim had no reasonable prospect of success and should be struck.

Firstly, given the Supreme Court's ruling in Hamilton-Wentworth that, in certain circumstances, police officers may owe a duty of care to their suspects, surely it is not plain and obvious that a CRA investigator owes no such duty when operating under ITA provisions that attract criminal sanction and under the Criminal Code. The same analogical reasoning applies to any residual policy rationale that could negate such a duty.

Secondly, I see no relevant distinction between the above-cited case of Leroux and this case. That case that involved a claim of negligence against CRA employees as well and the British Columbia Court of Appeal dismissed an appeal of an order permitting the cause of action to proceed to trial. The Court was not persuaded that the claim should be struck because it was at least arguable that such a cause of action could succeed and the issue was to be considered at trial.
[29] The critical distinction that made McCreight different from the present case was the institution of criminal proceedings. Hill v. Hamilton‑Wentworth Regional Police Services Board, 2007 SCC 41, [2007] 3 S.C.R. 129 established that police officers have a duty in certain circumstances to an identified suspect to conduct a reasonable investigation.

[30] This court’s approval of Leroux v. Canada Revenue Agency, 2012 BCCA 63, 347 D.L.R. (4th) 122 as a basis to allow the action to proceed where criminal charges have been laid does not amount to affirmation that a duty of care also exists when the CRA undertakes administrative assessments and audits.

[31] As the court noted in McCreight, it is not plain and obvious that CRA investigators owe no duty of care to those they are investigating when operating under ITA provisions that attract criminal sanction and under the Criminal Code: at para. 61.

[32] Here, the appellant’s proximity claim was “made in a non-criminal investigation where only its economic interests were at stake. Any liberty interests it might have had were not threatened and it asserted no Charter rights”: River Valley, at para. 51.

[33] Policy reasons also favour rejection of a private law duty of care in relation to administrative assessments and audits. Such a duty would expose the government to unlimited liability to a practically unlimited class: taxpayers.

[34] I agree with the views expressed in Grenon v. Canada Revenue Agency, 2017 ABCA 96, 49 Alta. L.R. (6th) 228, at para. 25, leave to appeal refused, [2017] 2 S.C.R. vii (note):
[I]t is plain and obvious that an action in negligence cannot succeed. It is clear that, because of the inherently adverse relationship between auditors who are exercising a statutory function and taxpayers, a finding of sufficient proximity to ground a private law duty of care does not exist.
[35] I conclude that the motion judge was correct to conclude that the CRA did not owe a private law duty of care to Jayco when it assessed Jayco for the taxes it claimed were owing.

[36] A taxpayer may not be left without a remedy where it can establish the ingredients of an intentional tort, such as misfeasance in public office, which requires a showing of deliberate unlawful conduct in the exercise of public functions and awareness of the unlawfulness of the conduct and the likelihood of injury to the plaintiff: Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263, at para. 23. Here, the appellant has not established any such intentional tort.
. Charlesfort Development Limited v. Ottawa (City)

In Charlesfort Development Limited v. Ottawa (City) (Ont CA, 2021) the Court of Appeal considered the proximity issue in negligence law after Livent:
(i) Proximity under the Anns/Cooper test

[26] Until recently, the analysis of whether there is a novel duty of care was governed by the Anns/Cooper test. That test, however, has been refined by the Supreme Court in Livent and 16688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35, 450 D.L.R. (4th) 181. It will be useful to review this development briefly.

[27] The Anns/Cooper test sets out two stages for establishing a novel duty of care. The first stage requires the establishment of a prima facie duty of care through the application of a proximity and foreseeability analysis. The second stage asks whether there are policy reasons for why a duty of care should not be recognized: Cooper, at para. 30.

[28] As the majority of the Supreme Court explained in Livent, at para. 16, the legal principles have evolved since Anns. Under that test, a prima facie duty of care would arise where injury to the plaintiff was a reasonably foreseeable consequence of the defendant’s negligence, and where present, the relationship was labelled as one of “proximity”: Livent, para 20.

[29] It was Cooper that recognized that foreseeability alone is insufficient to establish a prima facie duty of care. Rather, the court must also undertake a proximity analysis: Cooper, at paras. 22, 29 and 31. This analysis considers whether the parties are in such a “close and direct” relationship that it would be “just and fair having regard to that relationship to impose a duty of care in law”: Cooper, at paras. 32, 34; Livent, at para. 25.

[30] In Livent, at para. 29, the court held that where an established proximate relationship cannot be found, courts must undertake a full proximity analysis:
To determine whether the “‘close and direct’ relationship which is the hallmark of the common law duty of care” exists, courts must examine all relevant “factors arising from the relationship between the plaintiff and the defendant”. While these factors are diverse and depend on the circumstances of each case, this Court has maintained that they include “expectations, representations, reliance, and the property or other interests involved” as well as any statutory obligations. [Citations omitted. Emphasis in original.]
[31] In the case of pure economic loss arising from negligent misrepresentation or the performance of a service, two factors are determinative in the proximity analysis: the defendant’s undertaking and the plaintiff’s reliance. A relationship of proximity is formed when the defendant undertakes to provide a representation or service in circumstances that invite reasonable reliance by the plaintiff, as the defendant becomes obligated to take reasonable care and the plaintiff has a right to rely on the defendant’s undertaking to do so: Livent, at para. 30; Maple Leaf, at para. 32.

[32] However, any reliance on the part of the plaintiff that falls beyond the scope of the defendant’s undertaking of responsibility necessarily falls outside the scope of the proximate relationship and, therefore, of the defendant’s duty of care: Livent, at para. 31. The purpose for which the representation was made or the service undertaken is key to the determination of the scope of the duty of care. As the court noted, at para. 31:
By assessing all relevant factors arising from the relationship between the parties, the proximity analysis not only determines the existence of a relationship of proximity, but also delineates the scope of the rights and duties which flow from that relationship. In short, it furnishes not only a “principled basis upon which to draw the line between those to whom the duty is owed and those to whom it is not”, but also a principled delineation of the scope of such duty, based upon the purpose for which the defendant undertakes responsibility. [Citation omitted. Emphasis in original.]
[33] In Livent, at para. 24, the court also observed that in cases involving negligent misrepresentation or performance of a service, the proximity analysis will be more usefully considered before the foreseeability analysis. That is because, as the court notes, at para. 34, and as will be seen from the discussion below, the factors applied in the proximity analysis will inform the foreseeability inquiry:
[T]he purpose underlying that undertaking and that corresponding reliance limits the type of injury which could be reasonably foreseen to result from the defendant’s negligence. [Emphasis added.]
[34] The most recent Supreme Court decision which addresses the proximity analysis in a duty of care determination involving negligent misrepresentation is Maple Leaf. In Maple Leaf, Mr. Sub franchisees sued Maple Leaf Foods for the lost profits and other economic loss they sustained when they experienced a shortage of product after Maple Leaf Foods recalled meat products due to a listeria outbreak at a Maple Leaf Foods factory. The majority began its analysis by noting that the franchisees were making claims for pure economic loss, observing that tort law has historically been concerned mainly with negligent interference with or injury to rights in bodily integrity, mental health and property, which explains why the common law has been slow to accord protection to pure economic loss.

[35] The Mr. Sub franchisees claimed that Maple Leaf Foods undertook to provide ready-to-eat meats fit for human consumption. In support of their allegation, they relied on Maple Leaf’s reputation for product quality and safety, and its public motto “We Take Care”. The majority held that there was no proximate relationship between Maple Leaf Foods and the Mr. Sub franchisees. The purpose and scope of Maple Leaf Foods’ undertaking was to ensure that Mr. Sub customers who ate the meats would not become ill or die. Properly construed, the undertaking was made to consumers with the purpose of reassuring them that their interests were being kept in mind, and not made to “commercial intermediaries” such as Mr. Sub or its franchisees. The business interests of the franchisees lay outside the scope and purpose of the undertaking.

[36] This decision is important to the present appeal for a few reasons. First, it held that correctness is the standard of review applicable to the determination of the existence of a duty of care between the plaintiff and the defendant: at para. 24. Second, it affirmed Cooper and Livent, both of which emphasized the importance of proximity in the duty of care analysis, at para. 33:
Taking Cooper and Livent together, then, this Court has emphasized the requirement of proximity within the duty analysis, and has tied that requirement in cases of negligent misrepresentation or performance of a service to the defendant’s undertaking of responsibility and its inducement of reasonable and detrimental reliance in the plaintiff.
[37] Third, Maple Leaf confirmed that undertakings are not to be treated as given at large. A court must consider whether the undertaking is made to the plaintiff and for what purpose: at paras. 35, 38. Further, when a defendant undertakes to do something, they assume the task of doing so reasonably, which manifests an intention to induce the plaintiff’s reliance: at para. 33. As Maple Leaf explains, at para. 34, it is the “intended effect” of the defendant’s undertaking upon the plaintiff’s autonomy that brings the defendant into a relationship of proximity:
Where that effect works to the plaintiff’s detriment, it is a wrong to the plaintiff. Having deliberately solicited the plaintiff’s reliance as a reasonable response, the defendant cannot in justice disclaim responsibility for any economic loss that the plaintiff can show was caused by such reliance. The plaintiff’s pre-reliance circumstance has become “an entitlement that runs against the defendant”. [Citation omitted. Emphasis added.]
[38] The plaintiff’s entitlement to rely operates only so far as the undertaking goes. Any reliance which falls outside of the purpose for which the representation was made or the service was undertaken necessarily falls outside the scope of the proximate relationship and therefore, of the duty of care. Citing Livent, the majority stated that “[t]his ‘end and aim’ rule precludes imposing liability upon a defendant for loss arising where the plaintiff’s reliance falls outside the purpose of the defendant’s undertaking”: at para. 35.
. 1688782 Ontario Inc. v. Maple Leaf Foods Inc.

In 1688782 Ontario Inc. v. Maple Leaf Foods Inc. (SCC, 2020) the Supreme Court of Canada reviews the principle of proximity in negligence law:
(i) Proximity

[62] As the Court explained in Livent (albeit in the context of negligent misrepresentation or performance of a service), proximity ⸺ which is “a distinct and more demanding hurdle than reasonable foreseeability” (para. 34) ⸺ informs the foreseeability inquiry, and should therefore be considered prior to assessing foreseeability of injury. As Professor Klar has explained, “[t]he existence of proximity depend[s] upon the nature of the relationship between the parties [which] in turn dictate[s] the type of injury which could flow from this relationship and hence the losses which could be considered to have been reasonably foreseeable” (p. 242). We agree: in all claims, including claims of dangerous goods or structures, the considerations that support a finding of proximity also limit the type of injury that may be reasonably foreseen to result from the defendant’s negligence. (The result of doing so in this case is to render a foreseeability analysis unnecessary since, as we shall explain, the appellant cannot demonstrate a proximate relationship between itself and Maple Leaf Foods.)

[63] Assessing proximity requires asking whether, in light of the nature of the relationship at issue (Livent, at para. 25), the parties are in such a “close and direct” relationship that it would be “just and fair having regard to that relationship to impose a duty of care in law” (Livent, at para. 25, citing Cooper, at paras. 32 and 34). This assessment proceeds in two steps.

[64] First, the court must ask whether proximity can be made out by reference to an established or analogous category of proximate relationship (Livent, at paras. 26‑28). This question comes first because “[i]f a relationship falls within a previously established category, or is analogous to one, then the requisite close and direct relationship is shown” (Livent, at para. 26). Analogous categories of proximity step into a prior and continuing stream of legal development. They are, in other words, just that: analogous, in the sense of being like an established category, although different in scope. Applying an established category of proximity so as to recognize another is simply an instance of the inductive reasoning whereby the common law is developed and a duty recognized in one set of cases is applied to a similar set of cases.

[65] In determining whether proximity can be established on the basis of an existing or analogous category, “a court should be attentive to the particular factors which justified recognizing that prior category in order to determine whether the relationship at issue is, in fact, truly the same as or analogous to that which was previously recognized” (Livent, at para. 28). This is because, as between parties to a relationship, some acts or omissions might amount to a breach of duty, while other acts or omissions within that same relationship will not. Merely because particular factors will support a finding of proximity and recognition of a duty within one aspect of a relationship and for one purpose to compensate for one kind of loss does not mean a duty will apply to all aspects of that relationship and for all purposes and to compensate for all forms of loss. While, therefore, proximity may inhere between two parties at large, it may inhere only for particular purposes or for particular actions; whether it is one or the other, and (if the other) for which purposes and which actions, will depend, as we have already recounted, upon the nature of the particular relationship at issue (Livent, at para. 27) or the type of pure economic loss alleged. Ultimately, then, to ground an analogous duty, the case authorities relied upon by the appellant must be shown to arise from an analogous relationship and analogous circumstances (ibid.).

[66] Secondly, if the court determines that proximity cannot be based on an established or analogous category of proximate relationship, then it must conduct a full proximity analysis (Livent, at para. 29). In making this assessment, courts must examine all relevant factors present in the relationship between the plaintiff and the defendant ⸺ which, while “diverse and depend[ent] on the circumstances of each case” (Livent, at para. 29), include “expectations, representations, reliance, and the property or other interests involved” (Cooper, at para. 34).

[67] In a case of negligent supply of shoddy goods or structures, the claim may arise in circumstances in which the parties could have protected their interests under contract. Even without being in privity of contract, the parties may nonetheless be “linked by way of contracts with a middle party”, as Maple Leaf and the Mr. Sub franchisees are linked by way of contracts with Mr. Sub (Stapleton, at p. 287). This is particularly the case in commercial transactions (as opposed to consumer purchases: Arora v. Whirlpool Canada LP, 2013 ONCA 657, 118 O.R. (3d) 115, at para. 106). Taken together, those contracts may reflect a “clear tripartite understanding of where the risk is to lie” (Stapleton, at p. 287). We see this consideration as crucial here when considering the “expectations [and] other interests involved” that must be accounted for in analysing the nature of the relationship (Cooper, at para. 34).

[68] Given the possibility of an existing allocation of risk by contract, a proximity analysis must account for two concerns. First, the reasonable availability of adequate contractual protection within a commercial relationship, even a multipartite relationship, from the risk of loss is an “eminently sensible anti‑circumvention argument” that militates strongly against the recognition of a duty of care (Stapleton, at p. 287; see also p. 286). As La Forest J., dissenting, recognized in Norsk, at p. 1116, “the plaintiff’s ability to foresee and provide for the particular damage in question is a key factor in the proximity analysis”. For example, a plaintiff may have been able to anticipate risk and remove, confine, minimize or otherwise address it by way of a contractual term (Linden et al., at §9.87). We agree with Professor Stapleton that the boundaries of tort liability should respect that “the principal alternative paths of protection which are theoretically available . . . are by way of contracts made directly with th[e] responsible party or indirectly with a middle party” (p. 271 (emphasis added)).

[69] This Court recognized as much in Design Services, where the defendant had launched a design‑build tendering process for the construction of a building. The plaintiff subcontractors and the defendant were not in privity of contract, but each were linked to the other through a bid submitted by Olympic Construction Ltd., a prime contractor. Olympic’s bid was unsuccessful, and the subcontractors sued alleging, inter alia, that they were in a relationship of proximity with the defendant and were owed a duty of care originating by reason of the defendant’s “Contract A” obligations to Olympic that arose at the tendering stage.

[70] For this Court, Rothstein J. declined to impose a duty of care, because the plaintiffs could have arranged their affairs so as to submit a joint bid with Olympic (thereby making them a party to “Contract A” and entitling them to sue the defendant in contract for irregularities in the tendering process), yet had chosen not to do so. He considered that the plaintiffs’ voluntary choice to forego this contractual protection was an “overriding” proximity factor that was fatal to the claim (paras. 54‑56). Thus courts will not lightly impose a duty in tort to insure against pure economic loss, in circumstances where the parties could have but chose not to provide for such insurance in contract.

[71] The second concern is related to the first. If the possibility of reasonably addressing risk through a contractual term, even within a chain of contracts, presents a compelling argument against allowing a plaintiff to circumvent a contractual arrangement by seeking recognition of a duty of care in tort law, it follows that where the parties have done so, this consideration weighs even more heavily against such recognition. As Professor Stapleton explains, this particular anti‑circumvention argument arises “not only [where] alternative protection by way of an arrangement with [the middle] party [was] available, but was obtained” (Stapleton, at p. 287 (emphasis added)). Again, this Court’s decision in Design Services is instructive:
In my view, the observation of Professor Lewis N. Klar (Tort Law (3rd ed. 2003), at p. 201) — that the ordering of commercial relationships is usually in the bailiwick of the law of contract — is particularly apt in this type of case. To conclude that an action in tort is appropriate when commercial parties have deliberately arranged their affairs in contract would be to allow for an unjustifiable encroachment of tort law into the realm of contract. [Emphasis added; para. 56.]
[72] All this is not to say that contractual silence on a matter will automatically foreclose the imposition of a duty of care. Contractual silence on certain matters is inevitable, since it is impractical for even the most sophisticated parties to bargain about every foreseeable risk (Stapleton, at p. 287). Our point, rather, is that, in the case of defective goods and structures, commercial parties between or among whom the product is transferred before it reaches the consumer will have had a chance to allocate risk and order their relationship via contract. And in assessing the proximity of relations among those parties ⸺ that is, in evaluating “expectations, representations, reliance, and the property or other interests involved” ⸺ courts must be careful not to disrupt the allocations of risk reflected, even if only implicitly, in relevant contractual arrangements.

[73] In sum, under the Anns/Cooper framework and its rigorous proximity analysis, the determination of whether a claim of negligent supply of shoddy goods or structures is supported by a duty of care between the plaintiff and the defendant requires consideration of “expectations, representations, reliance, and the property or other interests involved”, as well as any other considerations going to whether it would be “just and fair”, having regard to the relationship between the parties, to impose a duty of care. In particular, where the parties are linked by way of contracts with a middle party that, taken together, reflect a multipartite allocation of risk, courts must be cautious about allowing parties to circumvent that allocation by way of tort claims. Courts must ask: is a party using tort law so as to circumvent the strictures of a contractual arrangement? Could the parties have addressed risk through a contractual term? And, did they? In our view, and as we will explain, these considerations loom large here.


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