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Torts - Waiver of Tort

. Palmer v. Teva Canada Limited

In Palmer v. Teva Canada Limited (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal against a lower court dismissal of a class action certification motion.

In a class action for contaminated drugs, the court considered the failed cause of action of 'waiver of tort':
[97] The motion judge did not err in concluding that the pleadings do not disclose a viable cause of action for unjust enrichment. On the face of the Third Amended Statement of Claim, the appellants pleaded “waiver of tort and unjust enrichment.” Atlantic Lottery Corp. held that there is no cause of action for disgorgement based on the doctrine of waiver of tort in Canadian law, and the claim is therefore doomed to fail: at para. 27. Although the appellants pleaded “waiver of tort and unjust enrichment” as opposed to “disgorgement”, as Brown J. noted at para. 23 of Atlantic Lottery Corp., this terminology is frequently (and incorrectly) used interchangeably. That appears to be the case here. The cause of action as pleaded by the appellants has no reasonable chance of success.
. Owsianik v. Equifax Canada Co.

In Owsianik v. Equifax Canada Co. (Ont CA, 2022) the Court of Appeal considered an appeal (along with two other case released simultaneously) from motion orders below that declined class action certification of privacy claims in a larger class action. The issue was whether credit reporting agencies who had their stored data hacked were liable under the 'intrusion on seclusion' tort doctrine of Jones v Tsige (they weren't).

In these quotes to court considers the status of 'waiver of tort':
[39] At the time of the motion to strike, no court had recognized the doctrine of waiver of tort. Several courts had, however, certified claims, relying on the doctrine after concluding it was not “plain and obvious” that those claims could not succeed: Babstock, at para. 15. There was some academic support for the doctrine, although it seems from the comments in Babstock, at para. 21, that the weight of that support is waning. It was also clear that the availability of the doctrine on the facts as pleaded raised a pure question of law in the sense that the answer to the question could not be affected by any evidence that might be adduced at the trial. As observed by Brown J., at para. 21:
Nothing is gained, and much court time and considerable litigant resources are lost, by leaving this issue unresolved.
. Atlantic Lottery Corp. Inc. v. Babstock

In Atlantic Lottery Corp. Inc. v. Babstock (SCC, 2020) the Supreme Court of Canada the court dismisses the conceptual 'waiver of tort' as a cause of action, with some historical background:
[28] The modern law of unjust enrichment originated in the writ of assumpsit (Peel (Regional Municipality) v. Canada, 1992 CanLII 21 (SCC), [1992] 3 S.C.R. 762, at pp. 786‑88). Use of assumpsit allowed plaintiffs to avoid the limits imposed by other forms of action, which might have prevented their claim from advancing (McInnes (2014), at p. 34; Martin, at pp. 482‑84). While the writ was premised upon the defendant having undertaken to pay a sum of money to the plaintiff and having broken that promise, the specialized form of indebitatus assumpsit allowed plaintiffs to acquire the benefits of assumpsit where no such undertaking actually existed. It created the legal fiction of an implied contract, allowing plaintiffs to sue in assumpsit, “even where the imputation of a promise to pay was nonsensical, as when the defendant acquired a benefit through the commission of a tort.” (McInnes (2014), at pp. 34‑35; see also Martin, at pp. 489‑96).

[29] Where a tort was made out but the plaintiff chose to pursue a claim in assumpsit to recover the defendant’s ill‑gotten gains, the plaintiff was said to “waive the tort” (Edelman, at pp. 121‑22). Despite its early acceptance, however, the term waiver of tort was a misnomer. Rather than forgiving or waiving the wrongfulness of the defendant’s conduct, plaintiffs relying on the doctrine were simply electing to pursue an alternative, gain‑based, remedy (Edelman, at p. 122; see also United Australia, Ltd. v. Barclays Bank Ltd., [1941] A.C. 1 (H.L.), at pp. 13 and 18). The doctrine always operated as “nothing more than a choice between possible remedies”, and not as an independent cause of action (United Australia, at p. 13; Martin, at pp. 504‑5). That this is so is apparent from decisions of this Court, including Arrow Transfer Co. Ltd. v. Royal Bank of Canada, 1972 CanLII 135 (SCC), [1972] S.C.R. 845 where Laskin J. (as he then was), for the majority on this point, held that the plaintiff’s claim for a gain‑based remedy was dependent on the tort of conversion having been completed (p. 877).

[30] Two points follow from this. First, and as this case demonstrates, the term waiver of tort is apt to generate confusion and should therefore be abandoned (Edelman, at p. 122). Secondly, and relatedly, in order to make out a claim for disgorgement, a plaintiff must first establish actionable misconduct.


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Last modified: 30-03-24
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