CH-11-12 The Tort of Negligence – Canadian Business and the Law : Book Guide

This Document Contains Chapters 11 to 12 Chapter 11 The Tort of Negligence Instructor’s Manual–Answers by Shannon O’Byrne V. CHAPTER STUDY Questions for Review, page 262 1. What competing interests must a court balance in deciding a negligence action? Answer: The courts have the task of balancing competing interests. They must compensate victims of negligence, but without discouraging legitimate activity and without making the legal standards a business must meet unreasonably exacting. 2. What are the four elements in a negligence action? Answer: 1: Does the defendant owe the plaintiff a duty of care? 2: Did the defendant breach the standard of care? 3: Did the defendant’s careless act (or omission) cause the plaintiff’s damage? 4: Was the damage suffered by the plaintiff too remote? 3. Before Donoghue v Stevenson, what defence could most manufacturers of goods raise when faced with a claim for negligence brought by an injured user of those goods? Answer: Before Donoghue, the manufacturer would successfully argue that it owed no duty to the consumer. And since the manufacturer and the consumer were not in a contractual relationship, there could be no action in contract either. 4. How does the foreseeability test help in defining the neighbour principle in negligence? Answer: Tort law is clear that not everyone is the defendant’s neighbour. The only people who are neighbours are those whose proximity to the defendant make it reasonably foreseeable that carelessness by the defendant would cause them loss or injury. 5. What is the standard of care in negligence? Answer: “Standard of care” refers to the standard by which the defendant’s conduct is judged—that of the reasonable person in society. 6. How is causation usually determined in negligence? Answer: Causation is determined by asking the question, “Would the harm have not occurred but for the defendant’s actions?” 7. Does the normal standard of care vary in any specific circumstances? Explain. Answer: In the context of specialized skills, the standard is that of the reasonable person with that specialized training. A higher standard of care is also exacted when the activity is a risky one. 8. Does tort law generally allow recovery for pure economic loss? Answer: Tort law traditionally is reluctant to permit is recovery for pure economic loss, that is, loss that is only financial and involves no personal injury or property damage to the plaintiff. When a person not in a contractual relationship causes someone else to suffer a financial detriment only, such a loss is generally not recoverable. One explanation is that the rule prevents defendants from being overwhelmed with liability. A related explanation is that to permit recovery of damages in such cases would cause too much litigation. It is only in a relatively few areas, such as negligent misstatement (discussed later in this chapter), that a plaintiff can recover for pure economic loss. 9. What does contributory negligence mean and what are the consequences of it being found to exist? Answer: Contributory negligence refers to unreasonable conduct by the plaintiff that contributed—or partially caused—the injuries he or she were suffered. If it is found to exist, damages awarded to the plaintiff are reduced in proportion to the plaintiff’s responsibility for the loss or injury. 10. What is the consequence of a volenti non fit injuria finding? Answer: Volenti is the defence that no liability exists as the plaintiff agreed to accept both the physical and the legal risk of the activity. When the defence is established, the plaintiff receives no damages. 11. Give an example of when the defence of volenti non fit injuria might be applied. Answer: An example of the defence might occur when the spectator at a hockey game is found to voluntarily assume the risk of harm arising from a puck going over the glass and hitting him in the eye. (For a discussion of the difficulty in establishing this defence, see Question for Critical Thinking 1, below.) 12. What kinds of plaintiffs will be likely to succeed in an action for negligent misstatement against a professional? Answer: If the plaintiff suffers personal injury, rather than pure economic loss, there are fewer barriers to recovery. In the context of pure economic loss, a plaintiff who is in a contractual relationship with the professional is in a good position to succeed. If the plaintiff is a third party, that is, someone other than the client, the plaintiff faces obstacles in meeting both parts of the Anns test. The plaintiff must show that the defendant owed a prima facie duty of care and that there are no policy reasons to obviate that duty. Courts have traditionally been concerned with not making professionals, such as accountants, unduly at risk for liability in tort, as seen in the Hercules case. 13. Why was there no duty of care owed in Hercules Managements v Ernst & Young? Answer: Because the audited financial statements were not created to provide investment advice to shareholders but instead for the company’s annual general meeting only, the argument that there was a duty of care failed. Although there was a prima facie duty of care, the policy rationale of avoiding indeterminate liability was triggered and eliminated the prima facie duty. In short, there was no liability when the audited financial statements were used for extraneous purposes. 14. What area of law other than tort law do product liability actions often involve? Why are actions in that area often more straightforward than in tort law? Answer: Contract law is much more straightforward because liability is very strict. Few excuses for non-performance will be successful. 15. What is the thin skull rule? Give an example of when it would apply. How does the thin skull rule protect the plaintiff? Answer: The thin skull rules says that a defendant is liable for the full extent of a plaintiff’s injury even where a prior vulnerability makes the harm more serious than it otherwise might be. For example, say that a plaintiff slips, falls, and injuries her leg in a store because of the store’s negligence. Because of chronic poor circulation, the woman’s leg has to be amputated even though the injury itself was relatively minor. The defendant is responsible for the full extent of this loss because of the thin skull rule. 16. Is the commercial host liable if one of its patrons is injured because of the patron’s own impaired driving? Explain. Answer: Yes. The court in McIntrye v Grigg (page 257 of the text) quotes with approval the following analysis from the trial judge: At common law commercial vendors of alcohol owe a general duty of care to persons who might reasonably be expected to come into contact with an intoxicated person and to whom the patron may pose some risk. That duty of care arises if there is some foreseeable risk of harm to the patron or to the third party.… Common law and statutory law therefore impose a duty on taverns to its patrons and others to ensure that the tavern does not serve alcohol which would either intoxicate or increase the patron’s intoxication. Put another way, the commercial host owes a duty to take positive steps to protect its patron from foreseeable and unreasonable risk of harm. This includes a positive duty to oversee the patron’s consumption of alcohol while on the premises and prevent her from driving. 17. Why is strict liability rare in Canada’s tort regime? Answer: The most prevalent reason is that the scope of negligence law has increased enough to provide most deserving plaintiffs with a remedy in tort already. 18. Name two areas where strict liability is common. Answer: Strict liability is common in contracts and in the vicarious liability doctrine associated with employment relationships. Note that strict liability governs provincial workers’ compensation schemes as well. Questions for Critical Thinking, page 262 1. The principles of volenti non fit injuria have been restricted to allow the defence to apply only in limited circumstances. Are these circumstances too limited? For example, should the person getting into the car with an impaired driver still be allowed to recover in negligence? Is there not sufficient public knowledge of the dangers of impaired driving for people to understand the risk they assume? What about those who deliberately choose not to wear a seatbelt? Why should they potentially recover? Answer: Volenti applies only when the plaintiff has agreed to both the physical and the legal risks associated with the activity. This is very unlikely to occur in the impaired driver scenario above. A solicitous reason for courts to restrict the scope of the volenti defence is to avoid its severe consequences—namely, that the plaintiff receives no damages at all. While it could be said that anyone who travels with an impaired driver deserves no compensation, this removes responsibility from the driver and is a particularly draconian result. If the driver causes harm to his passenger, he should have at least some liability. Contributory negligence is a much more flexible tool. It permits calibration of liability and is not an all or nothing defence. Through contributory negligence, the plaintiff (who, for example, has failed to wear a seat belt) and defendant share responsibility for the events causing loss or injury in proportion to their fault. This is a considerable improvement over the historical approach to contributory negligence, which denied the plaintiff all recovery. 2. From time to time, it has been proposed that the principles of strict liability be applied to product liability in Canada as they are in certain other jurisdictions. What are the pros and cons of applying this concept in Canada? What changes would result for producers of goods and services, as well as for consumers? Are there inherent risks that might arise for society as a whole if strict liability were imposed in certain industries? Answer: The primary reason for introducing strict liability to product liability is to try to guarantee recovery for the injured consumer. Under a fault-based regime, not only must the plaintiff establish all the elements of the tort in question, but he must also have the means to access the civil justice system. A strict liability regime generally involves a tradeoff between increasing the ease of recovery and lowering the potential for large awards of damages. Damages are set by scale, or ceilings are placed on them. The consequence of a strict liability system is that its cost must be passed on in some manner to the consumer, usually through higher prices. The argument in support of strict liability is that this passes the cost to all consumers, and the extraordinary risk of harm to individuals is lessened through increased access to compensation. It is also argued that, in the longer term, producers will adjust their behaviour to increase the safety of their products. A strict liability system can, of course, threaten the existence of certain industries. This is particularly true where the state of knowledge at the time of producing the product may be different from that at the time harm arises. For example, chemical or pharmaceutical companies argue that some risks are simply unanticipated at the time a product is introduced, however responsible the producer. Exposing the business to strict liability for harm arising subsequently may threaten the continued existence of the industries even when they have obvious and strong social importance. Alternatively, it may be known in certain industries—most particularly, pharmaceuticals—that a small segment of consumers will suffer serious harm from using the product. Such adverse reactions are an unavoidable consequence of using the product. Holding the producer responsible even when negligence is lacking may amount to a burden so great that the business is non-viable. 3. Contributory negligence and causation are important doctrines in tort law. How are the two doctrines the same? How are they different? Answer: Both contributory negligence and causation look to the question of who is responsible for the loss or injury in question. They are differences, however, because causation asks whether “but for” the defendant’s negligence, the loss or injury suffered by the plaintiff would have occurred. Contributory negligence considers the question from the perspective of what the plaintiff may have done wrong. It asks whether the plaintiff’s unreasonable conduct contributed or partially caused the loss or injuries that were suffered. 4. It is relatively new for courts to allow recovery for pure economic loss in negligence, that is, loss unrelated to any physical loss. Some would argue that extending negligence in this regard potentially places an unfair burden on some occupations and service providers. In our society, people should accept that there are some losses for which recovery cannot be obtained. What are the pros and cons of allowing recovery for purely economic loss? Answer: This topic is further developed in Chapter 22: Professional Services. Not every foreseeable loss is accompanied by liability. Tort law requires a persuasive reason for shifting loss from the injured plaintiff to someone else. When someone suffers physical damage (particularly personal injury) because of the culpable conduct of the defendant, shifting the loss via civil sanctions is easily justifiable, not only to compensate the plaintiff but also to punish, deter, and educate (Lewis Klar, Tort Law, 5th ed (Toronto: Thomson Reuters, 2012]). When the defendant has merely caused economic loss, the decision to shift loss is more problematic. For example, if the defendant’s negligence creates a widespread power outage, causing loss of profit to a large number of businesses, a court may well deny recovery for loss of profit (because it is pure economic loss). A major concern is that of indeterminate liability. Another concern that makes courts reluctant to permit recovery for pure economic loss is the qualitative difference in the nature of the injury. Economic loss tends not to be as invasive a loss as is personal injury. According to Klar, supra at 231: It is important to ask whether the common law of torts ought to provide protection against business losses, which a claimant might have more efficiently guarded against. As well, accepting that tort obligations essentially restrict freedom of action in a free market society and that the law cannot…repair all losses, drawing the line at purely economic losses seems to be a defensible, and not an arbitrary, decision.” 5. The application of the “thin skull rule’ often places a considerable burden on a defendant who is found liable in negligence, above and beyond what would normally be “reasonably foreseeable.” Is it fair that the negligent party should assume the burden of these extra costs? Does the thin skull rule make sense when considered alongside the rule about remoteness of damage? Answer: Absent the thin skull rule, the courts would have to try to decide what a “normal” extent of an injury would be in any given scenario. The thin skull rule makes perfect sense when considered alongside the rule about remoteness of damage. The remoteness rule of foreseeability goes to the foreseeability of the particular injury but not the severity of such injury. 6. The court in Mustapha had no doubt that the plaintiff suffered extreme mental distress caused by seeing a fly in the sealed bottle of water and that he was not exaggerating his response. As long as the plaintiff is being truthful about his reaction to the defendant’s negligence and the court believes him, why should that not be sufficient to permit recovery for emotional upset? Discuss. Answer: This Question for Critical Thinking returns to the theme that tort law does not make the defendant a guarantor of everything that subsequently happens in the plaintiff’s life. While there is no doubt that the plaintiff in Mustapha was being truthful – the SCC says as much – recovery is not just based on truthfully describing one’s extreme reaction. The problem was that Mustapha’s extreme reaction was not a reasonably foreseeable consequence of the fly incident. Put another way, to be compensable, Mustapha’s reaction would have to have occurred in someone of ordinary mental fortitude. The person of ordinary mental fortitude would not have such an extreme reaction from simply seeing a fly in an unopened container of water. Situations for Discussion, page 263 1. Mrs. Kauffman was riding up the escalator owned by the Toronto Transit Commission (TTC). The escalator was equipped with a metal-clad handrail instead of the rubber type, which presumably would have been less slippery. Three young men, riding the same escalator just above Kauffman, began pushing each other around. They ultimately fell on Kauffman, knocking her over and severely injuring her. Kauffman sued the TTC for damages, claiming that it had been negligent in installing an untested handrail made of metal which offered less support and that is why she fell. Will Kauffman succeed in showing that TTC caused her loss? [footnote deleted] Answer: In the Supreme Court of Canada case upon which this Situation for Discussion is based (Kauffman v Toronto Transit Commission [1960] SCR 251), the court ruled that the Toronto Transit Commission (TTC) did not cause the loss suffered by Kauffman. The cause of the fall was the wrongful and grossly negligent conduct of the youths who fell on her. The nature of the grip on the handrail—though not as effective as a rubber grip – did not contribute to the accident. As one of the judges observed: It is impossible to serious suggest that when the weight of three men amounting to approximately 450lbs. was projected suddenly from above against this elderly lady she would not have fallen backwards, whatever the nature of the grip on the handrail. Furthermore, the court determined that the defendant did not owe a duty to supply supervision of those using the escalator. While the TTC was required to use all due, proper, and reasonable care, it was not an insurer of the safely of those using the escalators. 2. In 2007, hackers attacked Sony Corporation (Sony) causing an outage of its online game service, PlayStation Network and cloud-music service. All told, the attack resulted in up to 100 million accounts being compromised, including the theft of names, passwords, and credit card information. To help alleviate the stress and worry of some of it users, Sony offered free identity theft insurance as well as access to fraud investigators. To date, though, there appears to be no instance of the information stolen from Sony having been sold or resulting in the identity theft of any Sony customer. Because of the hacking incident, Sony is the subject of a class action in the United States which alleges, among other matters, that the impugned “breach of security was caused by SONY’s negligence in data security, including its failure to maintain a proper firewall and computer security system, failure to properly encrypt data, its unauthorized storage and retention of data.    ...”    Furthermore, the statement of claim alleges that Sony was in breach of contract for failing to “properly maintain Plaintiffs’. . . . data and provide uninterrupted PSN [PlayStation Network].” Assume for now that the plaintiffs’ allegations are true and that, for the purposes of this exercise, Canadian and US law are largely the same. What will the plaintiffs have to show to succeed in a tort action against Sony? What will the plaintiffs have to show to succeed in a contract action? What are Sony’s defences? Assuming that no case of identity theft or other fraud comes to light, do the plaintiffs have any damages? If so, what are these damages? [footnotes deleted] Answer: The pleadings filed in the US class action against Sony are complex and certainly beyond the scope of the Instructor’s Manual to discuss. Instead, instructors can consider using the Sony fact scenario as a launching point for an assessment of what, under Canadian law, would be required for a plaintiff to succeed against Sony. Emphasize to the class that the Sony matter did not proceed to trial so one is dealing in unproven allegations. Note too that Sony has recently entered into a settlement agreement which was approved by the District Court in May 2015. According to the website maintained by the court, The proposed settlement offers payments equal to credit balances (if applicable credit balance is $2.00 or more) in inactive accounts, game and online service benefits for holders of active accounts, and reimbursements for certain out-of-pocket expenses from any identity theft proven to have resulted from the Intrusions. See PSN-SOE Settlement at . See too David Thier, “You May Be Eligible for a Free Game Through Sony's PlayStation Network Class Action Settlement” (23 January 2015), online: Forbes . The Sony class action situation for discussion is offered as an opportunity to review the elements of a negligence action as well as to bring a review of how a contract action would be analyzed on these facts. The litigation provides an engaging example of the contract-tort overlap. What follows is a detailed answer though the instructor may choose to offer a more general assessment to the class. Analysis of what the plaintiffs must prove in order to win an action in negligence ELEMENT 1: DOES THE DEFENDANT OWE THE PLAINTIFF A DUTY OF CARE? Stage one: is there a prima facie duty of care? (a) Reasonable Foreseeability. Is the harm that occurred a reasonably foreseeable consequence of the defendant’s act? The harm that occurred – a security breach of personal information – is the reasonably foreseeable consequence of Sony’s alleged failures to maintain an adequate computer data security systems. (b) Proximity. Is there a relationship of sufficient proximity between the parties such that it would not be unjust or unfair to impose a duty of care on the defendant? Proximity considers whether the specific circumstances of the parties’ relationship are such that the defendant is under an obligation to be mindful of the plaintiff’s ‘legitimate interest’ in conducting his or her affairs. The relationship of customer and service provide is one of sufficient proximity. It would not be unjust or unfair to impose a duty of care on Sony. At this point, one can conclude that Stage 1 has been passed. The defendant owes a prima facie duty of care. Stage two: Are there residual policy considerations outside the relationship of the parties that may negative the imposition of a duty of care? Would imposing a duty in these circumstances be “unwise.” It is hard to think of any general policy considerations that ought to eliminate or reduce the prima facie duty as found. As noted in the text, the objective at this stage of the duty enquiry is to ensure that businesses and other defendants are not made liable to an unreasonably broad and indeterminate extent. The nature of businesses like Sony’s is to have members of the public purchase its goods and services. Though defendants like Sony stand to be liable to a tremendous number of consumers—perhaps as many as 100 million of Sony’s customers had their data compromised—this is the nature of the chosen business. As well, only those who can establish some kind of loss will actually recover against Sony. ELEMENT 2: DID THE DEFENDANT BREACH THE STANDARD OF CARE? The facts on this point have not been established yet. However, in a complaint filed in the US, it is alleged that Sony failed to use reasonable care in maintaining adequate computer data security, including credit card information. Only expert evidence concerning industry standards and the like could determine whether Sony failed in its duty. However, if Sony failed to use reasonable care in maintaining computer data security, then it has breached the standard of care. What follows is the summary on point offered by the f the law firm in charge of the class action. The summary is helpful because of the accessible analysis it deploys The complaint alleges that Sony failed to take reasonable care to protect, encrypt, and secure the private and sensitive data of its users which led to the intrusion that caused over 70 million customers the loss of their personal and private information, including customer names, addresses, e-mail addresses, birthdays, PlayStation Network and Qriocity passwords, and user names, as well as online user handles, and possibly credit card related data. The complaint also alleges "on information and belief, members of the Class have begun to experience losses from fraudulent use of credit card information believed compromised by the security breach alleged herein." (See Rothken Law Firm, "Rothken Law Firm Announces Filing of Class Action Lawsuit Against Sony" (27 April 2011), online: Rothken Law Firm .) ELEMENT 3: DID THE DEFENDANT’S CARELESS ACT (OR OMISSION) CAUSE THE PLAINTIFF’S INJURY? According to the website referenced just above, the lawsuit “seeks monetary compensation for the data loss and loss of use of the Sony PlayStation® Network, credit monitoring, and other relief according to proof.” On the basis that data loss caused the plaintiffs to have, for example, engaged credit monitoring services, such damages are recoverable. If it can be proven that a plaintiff suffered identity theft, any associated loss seems very much caused by the defendant’s alleged carelessness in maintaining security. ELEMENT 4: WAS THE INJURY SUFFERED BY THE PLAINTIFF TOO REMOTE? Assuming all the steps required to this point are established, it is hard to see a remoteness argument. Consumers of Sony’s goods and services experienced a data breach due alleged deficiencies in Sony’s security measures. The injury—costs associated with data loss and compromise—is clearly a reasonably foreseeable consequence of Sony’s negligence. Analysis of what the plaintiffs must prove in an action for breach of contract. Step One: is there a contract between Sony and the plaintiffs? Presumably a contract can be proven between Sony and each of its individual customers, most easily in relation to the provision of gaming services and for those who purchased consoles directly from Sony. For those who purchased consoles from retailers, one could argue (at least in Canada) that there is a collateral contract between Sony and the console purchaser with the main contract occurring between the purchaser and the retail. (Instructors may choose to sidestep the issue of collateral contract for the purposes of this exercise.) Step Two: what are the germane terms of the contract and were they breached by Sony? The class action pleadings allege, inter alia, that Sony represented and advertised PlayStation consoles and PSN and Qricoity services “as being exceptionally powerful and secure” and that Sony “consistently misrepresented the quality and reliability of the PSN service and its ability to keep data secure.” Such terms were breached to the extent that the hackers compromised the security of such data. Step Three: what are the plaintiff’s damages from the breach? As noted above, the pleadings seek “monetary compensation for the data loss and loss of use of the Sony PlayStation® Network, credit monitoring, and other relief according to proof.” If a plaintiff were to suffer identify theft due to Sony’s breach, then the damages for such an event would also be recoverable. To date, no such theft has been reported. Note that Sony’s defences in both actions presumably would include the claim that it maintained proper security over customer data but that it was victimized by an unforeseeable attack by a group of hackers who are so notoriously skilled as to be virtually impossible to stop. If there is no evidence of identity theft, then damages will presumably be very much lower than otherwise. However, the plaintiffs can recover for out-of-pocket expenses relating to protection of identity, including credit monitoring. As well, any distress the uncertainty of the data loss causes is recoverable in Canada. Based on the test in Fidler from the Supreme Court of Canada, the plaintiff would have to show: 1. That the object of the clause was to secure a psychological benefit that brings mental distress upon breach within the reasonable contemplation of the parties Cases related to recovery for mental distress focus around insurers failing to honour the policy in question or, more traditionally, with the disappointed vacationer who receives a highly deficient vacation. The Sony case does not neatly fit into such categories. However, it could be argued that a contract with Sony to provide gaming services – as an example -- includes as its object that the consumer would have an enjoyable, safe gaming experience. Data loss – and the attendant risk of identity theft -- disrupts such a contractual object. This brings mental distress upon breach with the reasonable contemplation of the parties. 2. That the degree of mental suffering caused by the breach was of a degree sufficient to warrant compensation. This is a fact-driven query. Given the serious consequences of identity theft, it seems reasonable that some Sony customers at least, would experience considerable worry and distress. If so demonstrated, such mental suffering should be compensable based on Fidler. See the box on Fidler v Sun life Assurance Company of Canada [2006] 2 SCR 3 in Chapter 9 of the text. As for recovery of damages in tort for distress or worry, this is a complex question going to whether or not the plaintiff must establish that he or she is suffering from a recognizable psychiatric illness. It is beyond the scope of this Instructor’s Manual to explore. For very helpful analysis of the question, however, see Kendrew v. McDonald's Restaurants of Canada Ltd., 2008 SKQB 50 (CanLII) 3. Klutz won a contest sponsored by a radio station, entitling him to play in a twilight golf tournament. He went to the radio station and signed a form releasing the station from any liability connected with the tournament. The event was held at the Dark Side Country Club, beginning at 11 p.m. Klutz attended a pre-tournament instructional meeting and was told that his team was to tee off on the second hole. While the team headed for that spot, Klutz hurried to his car to get his clubs and golf shoes. As he sprinted down the path to the parking lot, he ran into one of a series of black iron posts embedded in the asphalt path at the point where the walkway and parking lot met. Klutz somersaulted several times, ending up on the driveway with banged knees and a badly bruised elbow. He played seven holes of golf, but could not carry on. Prior to the accident, he was a self-employed upholsterer. Following the accident, he was unable to work for three months. After that his production was down 20 percent. His ability to participate in household and leisure activities was also reduced. Apply the principles of tort law to this situation. Suggest a result. What further information would be useful? [footnote deleted] Answer: Note: in the original case on which this hypothetical is based, Poluk v City of Edmonton (1996) 191 AR 301, [1997] 3 WWR 736 (Alta QB), the claim was founded in negligence and occupiers liability. However, here only negligence will be discussed. Instructors could use this case after discussing Chapter 12 as well. In fact, the outcome would likely be the same under either area of tort. Assuming that the form releasing the station from liability is effective, Klutz’s main action is against the Dark Side Country Club in negligence. Students should go through the basic elements required to prove a negligence case. Element One: Does the defendant owe the plaintiff a duty of care? Analysis: The Country Club owes Klutz a prima facie duty of care because under Stage One, (1) harm is reasonably foreseeable to Klutz if the Country Club maintains a parking lot with hazards such as the black iron posts and (2) there is a relationship of sufficient proximity between the country club and a user of that club (such that it would not be unjust to impose a duty). Under Stage Two, there are no residual policy considerations that may negate the imposition of a duty of care. Someone who is running a contest owes a duty of care to those who compete in the contest to at least keep the area clear of dangerous and hidden obstacles. Element 2: Did the defendant breach the standard of care associated with the duty of care? Analysis: Yes, the defendant breached the standard of care when it installed black iron posts in the ground that were not clearly visible, particularly at night. This created an entirely preventable hazard. Element 3: Did the defendant’s careless act (or omission) cause the plaintiff’s damage? If yes, proceed to the next step. Analysis: The defendant caused at least some of the loss because the dark iron posts it installed were hazardous to club users. There is, however, an excellent argument that the plaintiff was contributorily negligent by running at night down an unlit pathway to the parking lot. Element 4: Was the damage suffered by the plaintiff too remote? If not, the plaintiff has proven negligence. Analysis: The kinds of damage suffered by the plaintiff—personal injury, associated income loss, and some out-of-pocket expenses—are not too remote. 4. Burger Heaven (BH) is a large chain of restaurants specializing in burgers and fries. In response to customer demand, BH added coffee to its menu. The temperature of the coffee and the style of containers and lids were part of BH operating standards to be followed by all restaurant operators and staff. BH restaurants provide counter and drive-through service. Sandra bought coffee in the drive-through for herself and her husband, Morley. Sandra passed both cups of coffee to Morley. The car hit a big bump and the coffee spilled in Morley’s lap, burning him severely. What should BH do about this particular incident? Is Morley likely to be successful in any claim for negligence? What defences might BH raise? How can BH manage the risk of a similar incident occurring in the future? Can any preventive steps be taken? Answer: This case ties back to the Chapter 10 Business Application of the Law box on textbook page 234. The hypothetical is very loosely based on a U.S. case in which a customer successfully sued McDonalds after being scalded by hot coffee. At issue is whether BH was negligent in serving coffee at the temperature it did. It will be critical to obtain evidence as to the minimal safe temperature at which coffee should be served in a commercial establishment. The fact that coffee is sold at take-out establishments and through a drive-through window obviously increases the possibility of spillage and the chance of harm given the close proximity of passengers and the hazards of normal driving. It may be that hot coffee should not even be sold in this way since the customer is likely to be fumbling around in close quarters with money and other food items, and trying to find a place to store the hot beverages. Perhaps coffee can only be safely sold in the restaurant itself. The other view is that customers should be able to decide for themselves whether they can safely handle hot coffee through the take-out window or not. It could be argued that coffee has to be served hot and that customers are taken to assume the reasonable risks associated with that. In the English case of Bogle v McDonald’s Restaurants Ltd, [2002] EWHC 490 (QB), this was the view taken. As Mr. Justice Field observes in dismissing Bogle’s action against McDonald’s for a scalding injury: Persons generally expect tea or coffee purchased to be consumed on the premises to be hot.... Persons generally know that if a hot drink is spilled onto someone, a serious scalding injury can result. They accordingly know that care must be taken to avoid such spills.... They expect precautions to be taken to guard against this risk but not to the point they are denied the basic utility of being able to buy hot drinks. I am satisfied that the safety of the hot drinks served by McDonald’s was such as persons are generally are entitled to expect. The judge in Bogle was, in part, persuaded by the fact that scalding can occur at temperatures between 55°C and 60°C but that tea ought to be brewed with boiling water to give it its best flavour and brewed at between 85°C and 95°C. Tea and coffee served at 55°C and 60°C would not have been acceptable to the customers—it would have been too cold. According to the court, negligence law does not require McDonald’s to deny to the public a product with a known risk: “Although McDonald’s owe a duty of care to those who visit their restaurants to guard against injury, that duty is not to refrain from serving hot drinks at all.” Even assuming that is served coffee at too high a temperature, BH has three possible defences. BH would first argue that it did not cause the harm—rather, Sandra’s negligent driving did. In other words, Morley cannot meet the basic requirements of a negligence action. Second, BH might raise the defence of volenti non fit injuria. If persons, such as Morley, agree to hold hot coffee purchased through a drive-through window, they assume the legal risk of harm resulting injury caused by the coffee being hot. It could also argue that Morley was contributorily negligent in taking the hot coffee cups from Sandra as she was driving. He should have insisted that she come to a full stop and pass the coffee to him under safer conditions. 5. Mr. Worton purchased a slide for the family’s four-foot-deep aboveground backyard pool from Jacuzzi Canada Inc. A Jacuzzi Canada employee told Mr. Worton that installing this kind of slide with his pool would be “ok” and “not a problem.” He was not advised that there was any risk at all in doing so. Worton installed the slide according to the instructions. Unfortunately, Carla, his 15-year-old, was seriously injured when she went down the slide headfirst and as a result is now paralyzed. Carla had been instructed by her parents only to go down the slide feet first, but on this occasion, she failed to follow this rule. Carla’s parents have sued Jacuzzi on her behalf. Is there negligence? Did this negligence cause Carla’s accident? [footnote deleted] Answer: This situation is based on Walford (Litigation guardian of) v Jacuzzi Canada Inc [2007] OJ No 4053 (CA). What follows is an excerpt from the decision’s headnote, offered by QL: Per Feldman J.A. (Blair J. concurring): Based on their history, together with the fact that MW [the plaintiff] specifically sought Pioneer’s [the defendant’s] advice as pool experts, there was a special relationship of trust and confidence between MW and Pioneer which was sufficiently close to create a duty of care. Pioneer was negligent in failing to warn MW, when she specifically asked about the suitability of the slide for a 4-foot-deep swimming pool, that there was a serious risk of catastrophic injury due to the pool’s shallow depth if a person were to descend the slide other than by sitting upright and entering the water feet first. The trial judge was entitled to use the CPSS [U.S. Consumer Safety Product Standards] as the relevant standard of care, but he erred when he misapprehended the standard by referring only to the requirements governing minimum pool depth. Although the CPSS permitted the installation of a slide on a 4-foot-deep pool, that permission was qualified in the CPSS by many safety [page283] requirements concerning the risk of serious injury and instructions for reducing that risk. The danger from using a pool slide in relatively shallow water is not an obvious danger. A customer who installs a slide in a shallow pool creates a risk of catastrophic injury from incorrect sliding technique which would be entirely absent if the customer installed the same slide in a deeper pool. The nature and extent of this risk constitutes a hidden danger that engages the obligation to warn. The basic test for determining causation is the “but for” test. MW’s uncontroverted and unchallenged evidence was that had she been warned by Pioneer about the danger of using a slide with a 4-foot-deep pool, she would not have installed the slide. But for the failure of Pioneer’s employees to respond to MW’s inquiries by warning her of the risks of installing the pool slide on her pool, she would not have erected the slide and CW would not have been injured going down it. Pioneer’s breach of duty and negligence caused or contributed to CW’s injury. As CW was unable to appreciate the nature or extent of the danger due to the absence of an authoritative warning, she did not assume the risk of catastrophic injuries when she went down the slide crouched over her knees. However, CW bore some responsibility for failing to heed MW’s safety rules. Her contribution to her loss should be fixed at 20 per cent. 6. Ellen attended the Skin Care Clinic Inc. to receive laser removal of unwanted hair. The technician performed the entire treatment without first conducting a full patch test and failed to stop the treatment when Ellen complained of pain. As a result, Ellen sustained facial and neck scarring. She was left with permanently lighter skin below the lasered skin and was very concerned that others would think she had leprosy. She was very traumatized and unable to work for at least a month. She also requires ongoing psychological care. What steps must Ellen establish in order to demonstrate a negligence claim? What kind of damages should she seek and on what basis? [footnote deleted] Answer: This situation is based on Ayana v Skin Klinic, (2009) 68 CCLT (3d) 21. In Ayana, the service provider quite rightly acknowledged that it owed a duty of care. Applying the two-stage test for whether a duty exists, one would easily conclude that the service provider of a laser procedure owes a duty of care to his or her customer. The court found that the defendant breached the standard of care by, inter alia, conducting insufficient patch testing and continuing with treatment when the plaintiff complained of pain. This negligence was the cause of the injury to the plaintiff. On this basis, the court ruled that the defendant was liable for negligence (and breach of contract). The plaintiff in Ayana suffered severe psychological trauma in response to her injuries, which the court found to be compensable because they were reasonably foreseeable. What follows is an excerpt of the court’s analysis on its compensability: [280] In contrast with some of the cases canvassed in Mustapha, Mrs. Ayana in fact suffered physical injury, namely, the scarring she sustained on her neck, out of which flowed her psychiatric injury.... I find that it was reasonably foreseeable to the Clinic that a person of ordinary fortitude would suffer serious physical as well as psychological injury as a result of its negligent treatment. [282] Mrs. Ayana testified that in the four months during which she had the ugly scars, she always felt shame, did not want to expose herself in public and felt upset every time she looked at herself in a mirror.... I prefer the evidence of Dr. Hill, to the effect that it is probable that Mrs. Ayana does suffer from post-traumatic stress disorder, given the consistency of her symptoms with that disorder. I also accept Dr. Hill’s evidence that, although Mrs. Ayana’s condition can be treated, any improvement will likely take longer to achieve, given the length of time that has passed. The court ultimately found for the plaintiff, awarding, among other things, $35 000 in non-pecuniary damages relating her distress and $1200 for costs of future care, plus special damages. 7. Big Pizza, a province-wide pizza chain, has a new promotional campaign. The chain guarantees that all pizzas will be delivered within 30 minutes or they will be free. While this promise is readily kept in small cities and towns, it places considerable stress on franchises in large urban areas. Franchisees are required by their franchise agreement to pass on this stress to drivers by fining them half of the cost of any pizza not delivered within the requisite time. To overcome this threat, drivers often are forced to drive well above the speed limit. One driver, attempting to meet the deadline, fails to notice another vehicle in its path and collides with it, seriously injuring the passengers in that vehicle. Assuming that the issue of negligence by the driver is clear-cut and that the driver is an employee, can the injured persons claim damages from the franchisee for the actions of the employee? Why or why not? Is there any argument that Big Pizza has itself been negligent? Present arguments for both sides of the case, and determine whether liability will be upheld. [footnote deleted] Answer: The first part of the question raises the issues of vicarious liability. Provided the driver is acting in the ordinary course of employment or there is a sufficient connection between the employment and the accident, the employer is responsible for the actions of the employee. An argument sometimes raised by the employer or defendant is that the person is not, in fact, an employee but is an independent contractor. The traditional focus is on the control the defendant has over the acts of the tort-feasor. If there is control over the way the worker performs tasks and the task is not simply delegated to another with no request other than it be completed satisfactorily, there is an employment relation. The potential case against Big Pizza is very loosely based on U.S. cases. The argument against Big Pizza is that it has established policies that must be followed by franchisees, and those policies are themselves negligent. The injured passengers will argue that it is the negligence of Big Pizza that has resulted in the harm being done. The plaintiffs will argue that it is reasonably foreseeable that if you require drivers to meet a very tight time deadline and then impose the cost of failure on them, they will drive faster or more carelessly than is safe to do with resulting harm. The defendants will respond that this is not reasonably foreseeable, that drivers, above all else, must drive carefully and lawfully. The success of the case will turn on the particular circumstances of the case. How big is the delivery radius? How long do drivers have to deliver the pizza after the time of handling the order, preparing the food, and connecting with the driver is factored in? Is the time guarantee such that drivers will, under some circumstances, feel pressured to cut corners to meet the deadline? If there is a reasonable probability that the time cannot be met in at least some circumstances, it is likely that passing the cost of failure onto those doing the driving, and arguably those with the least economic strength to sustain this pressure, will result in less than safe driving. In other words, Big Pizza is liable in negligence. 8. The Bridge Engineering Company contracted to build a bridge between a suburb and the downtown of a medium-sized town. For years the two communities were joined by a one-lane bridge, and this new four-lane bridge was a major improvement. Indeed, as a result of the new bridge, a local contractor began building a new housing project of 30 homes. Just before the first home sales were made, a major defect was discovered in the bridge design that meant that the bridge would be unusable for at least two years. Residents would be forced to use a lengthy detour that added approximately 30 minutes to the average drive between the suburb and downtown, where the majority of the residents worked. The market for the new housing project immediately collapsed, and the contractor was unable to sell any houses. The contractor is considering litigation but realizes that he has no claim in contract against the engineering company. Are there any alternatives? Explain. Answer: The question concerns liability for the negligent design of a bridge when the claimant has no privity of contract and has only suffered economic loss. To determine whether Bridge Engineering Company owes a duty of care to the housing contractor, the first question that needs to be asked is whether the defendant owes the plaintiff a duty of care. Bridge owes a prima facie duty of care because under Stage One, (1) harm is reasonably foreseeable to future business who would lose money because of access problems, and (2) there is a relationship of sufficient proximity (such that it would not be unjust to impose a duty) between Bridge and these future business. Under (2), there is an argument that finding a duty at this point leaves Bridge open to indeterminate liability in an indeterminate amount. If this is the case, the court can conclude that no duty is owed and decline to continue the analysis under Stage Two (i.e., to explore whether there are any residual policy considerations that may negative the imposition of a duty of care.) Courts remain solicitous of the defendant in the area of pure economic loss. Students might be asked why, if the bridge had collapsed because of the engineer’s negligence harming the contractor physically, recovery would be probable, yet the potential threat to his livelihood here has not traditionally been recoverable. For development of this point, see the discussion under Question for Critical Thinking 4. Assuming that a court does find the bridge company liable, an issue remains as to what the contractor can recover damages. On the facts, the contractor’s future sales are merely delayed, not totally forestalled. A court may decide to compensate for the temporary loss of that cash flow but not for loss of profit since the profit will be earned—just not right away. Chapter 12 Other Torts Instructor’s Manual–Answers by Shannon O’Byrne V. Chapter Study Questions for Review, page 290 1. How does the law define the occupier of property? Answer: An occupier is someone who has some degree of control over land or buildings on that land; it is any person who has a legal right to occupy premises. 2. Who is an occupier? Answer: An enterprise conducting business on property is an occupier, whether it is the owner, a tenant, or a temporary provider of a service. 3. What are the four different classes of visitors in the law of occupiers’ liability? Answer: The classes are trespasser, licensee, invitee, and contractual entrant. 4. What is the standard of care owed to each of the four classes of visitors? Answer: Each class is owed a different standard of care, with the trespasser being owed the lowest standard and the contractual entrant being owed the highest. This area of law is often criticized for the difficult distinctions between the different classes of visitors, the blurring of duties owed between the various classes, and the severity of the result when the visitor is classified as a trespasser. A contractual entrant is someone who has contracted and paid for the right to enter the premises. Visitors to the premises who have bought tickets to see a pottery exhibit would be contractual entrants. The duty owed to this class (in the absence of a contract specifying the duty) is akin to the negligence standard—that is, the standard of reasonableness. An invitee is someone whose presence on the property is of benefit to the occupier, such as store customers and delivery or service personnel. The occupier owes a slightly lower duty to the invitee than to the contractual entrant. He must warn the invitee of any “unusual danger, [of] which he knows or ought to know” [footnote deleted]. There is no requirement to warn of usual or common danger that “ordinary reasonable persons can be expected to know and appreciate” [footnote deleted]. In the Business Law in Practice feature, Julie is clearly an invitee, and the improperly fastened steel plate would be classified as an “unusual danger.” She is therefore entitled to hold the owner and elevator maintenance company liable for injuries suffered as a result of that unusual danger. A licensee is someone who has been permitted by the occupier to enter for the benefit of the licensee. If Ron allows people accessing an adjacent business to take a shortcut through his building, those users would be licensees. A licensee might also include guests invited to someone’s property for a social occasion. The general rule is that occupiers are responsible to licensees for any unusual danger of which they are aware or that they have reason to know about. The latter part of the rule is a recent addition and tends to blur the distinction between the duty owed an invitee and the duty owed a licensee. Since there is no strong rationale for distinguishing between a licensee and invitee to begin with, this blurring is entirely justifiable. A trespasser is someone who “goes on the land without invitation of any sort and whose presence is either unknown to the occupier, or if known, is practically objected to” [footnote deleted]. A burglar clearly fits the definition of a trespasser. An occupier still owes some responsibility to a trespasser. In particular, the occupier will be liable for any act done with the deliberate intention of doing harm to the trespasser or an act done with reckless disregard for the presence of the trespasser. Though the trespasser is not owed a common law duty of care described in Donoghue v Stevenson, the occupier does owe him “at least the duty of acting with common humanity towards him” [footnote deleted]. Though a trespasser is owed a very low duty, courts have often mitigated the harshness of this result, particularly when the trespasser is a child. For example, courts have at times reclassified the trespasser as a licensee, interpreted the duty owed the trespasser very generously, and even brought children’s claims under the ordinary law of negligence. 5. What is the major change made by legislation in many provinces of Canada to the common law of occupiers’ liability? Answer: Generally, only two categories of liability are owed: to those who are on property with permission (express or implied) and to those who are not. This simplifies the common law by reducing the categories of entrants. 6. What is a nuisance in tort law? Answer: A nuisance is any activity on an occupier’s property that unreasonably and substantially interferes with the neighbours’ rights to enjoyment of their property. 7. The courts have developed pragmatic rules for resolving inherent conflicts that arise in applying the tort of nuisance. Give two examples of these rules. Answer: Examples of these rules or guidelines follow: • Nuisance only applies in the context of intrusions that are significant and not reasonable. • Nuisance does not typically arise where the intrusion is only temporary. • Some interests, such as a view or access to light, are not protected by the tort of nuisance. In nuisance actions, courts will consider tradeoffs between the interests of those apparently harmed and the interests (often public) of those engaging in the activity resulting in the apparent nuisance. 8. Under what conditions can trespass arise? Answer: Trespass can occur when a person comes onto the property against the occupier’s express or implied wishes, or when a person comes onto the property with the occupier’s express or implied consent but is subsequently asked to leave. Any person who refuses to leave becomes a trespasser. Additionally, it is trespass to leave an object on the property without the occupier’s express or implied permission. 9. What are the limitations to the ability of a store detective to detain a customer who is suspected of shoplifting? Answer: A store detective can detain a person only on reasonable grounds and with proof that a crime (such as theft or fraud) was committed. 10. Describe how a false imprisonment claim might arise, other than by a person being physically restrained. Answer: It will occur if persons have a reasonable belief that they will be detained if they attempt to leave. This might be the case, for example, when a store detective shouts, “Stop, thief!” or when a bouncer in a bar, being considerably larger than the patron, orders the patron to stay put until the police arrive. 11. How can a business manage the risk of retail theft and fraud? Answer: The retail industry faces a large and growing risk of retail theft and fraud. By preventing theft and fraud though appropriate security measures and staff training, the business also avoids the fallout of staff having to actively stop a theft or fraud from being perpetrated, thereby reducing the risk of false imprisonment, battery, assault, defamation, and so on. The Internet is a useful resource for learning about prevention measures. For example, see Robert Price, “Beating Shoplifters at Their Game” (undated) Loss Prevention, Volume 1, Issue 3 (Retail Council of Canada), an excerpt from which appears on the following page. Many more tips are provided on Internet. The point is that a business should consider devoting time and effort to preventing theft and fraud rather than adopting a merely reactive approach to a shoplift or fraud in progress. The latter approach is more likely to lead to store personnel committing torts and also being on the receiving end of them. 12. Identify what must be established to prove deceit. Answer: The tort of deceit arises out of misrepresentations, causing loss, that are made either fraudulently or with reckless disregard for their truth. When deceit arises in a contractual context, one of the remedies available is release from the contract (see Chapter 8) in addition to any other damages in tort that the plaintiff can establish. Though the tort of deceit is not confined to the contractual area, this is where it is most commonly found from a business perspective. 13. What is “passing off” and what practices was this tort created to prevent? Answer: Passing off occurs when one person presents another’s goods or services as her own. The tort is intended to protect against businesses obtaining a free ride on another’s reputation or business concept. For example, the tort seeks to prevent a person creating goods that are so similar to those of another that buyers will purchase them because they have mistaken them with the original. 14. Describe a situation that might amount to the tort of interference with contractual relations. Answer: The common law made it actionable if one master attempted to “poach” the servant of another. In legal terms, the “poacher” was seen as enticing the servant to break his existing contract of employment, which, in turn, caused economic harm to the master. Over time, this tort extended beyond master–servant relations to any form of contractual relationship. The tort prohibits a variety of conduct, including conduct whereby the defendant directly induces another to breach her contract with the plaintiff. In Ron’s business, the tort of interference with contractual relations could be important in at least two different contexts: • Ron employs a skilled potter who makes the “Old Man of the Sea” product. The potter has a three-year employment contract. A competitor approaches the potter in the second year of the contract and encourages the potter to work for him with promises of higher wages and better conditions. The competitor’s conduct is tortious because he knew about the contract and acted with the objective of convincing the potter to join him. Since this could happen only if the potter were to breach his contract with Ron, the tort has been made out. • Ron’s largest and most lucrative supply contract is with one of the leading tourism organizations in Nova Scotia. The owner of the competing business making “Man of the Sea” products approaches the tourism organization and suggests that if it breaks the contract with Ron and buys from her, she can offer larger profit margins and the final product can sell for less, thus increasing the volume of sales. In both cases, then, Ron could likely make out the tort of interference with contractual relations. Although he will sue for damages, he may also seek an injunction to prevent a breach of contract occurring if he finds out in time. A court would never order the potter to work for Ron—courts will not award specific performance with contracts of personal service—but it can order damages against the potter for breach of contract and damages or an injunction against the competitor for the tort of interference with contractual relations. An example of a successful tort action is in Ernst & Young v Stuart (1997), 144 DLR (4th) 328 (BCCA). In this case, a partner left the accounting firm of Ernst & Young to join the firm of Arthur Andersen. In so doing, the partner violated a term of the partnership agreement requiring one year’s notice of intention to retire from the partnership. Ernst & Young sued both the partner and the new firm, the latter for interfering with contractual relations. Both actions were successful. See page 281 of the textbook. 15. What is defamation, and what are the defences to this tort? Answer: Defamation is the public utterance of a false statement of fact or opinion that harms another’s reputation. The ingredients of the tort are set out on page 281 of the textbook. Defences include qualified privilege, absolute privilege, and fair comment. 16. When is a court entitled to award punitive damages for the tort of defamation? Answer: When the defendant’s conduct has been particularly reprehensible and oppressive, a court is entitled to award punitive damages, as discussed in the box Technology and the Law: E-Torts: Defamation on the Internet. 17. What is injurious falsehood? Answer: Injurious falsehood is the utterance of a false statement about another’s goods or services that is harmful to the reputation of those goods or services. 18. What is the tort of intrusion upon seclusion? Answer: This tort provides a remedy for the intentional, offensive invasion of another’s personal affairs without lawful justification. Questions for Critical Thinking, page 290 1. One of the controversial aspects of the tort of occupiers’ liability and its more recent statutory form arises out of the rights afforded trespassers. One possible change to the law would be to eliminate all rights. What would be the consequences of this approach? Are there some trespassers and some circumstances that you would feel uncomfortable leaving without protection? Answer: In answer to this question, students may focus on trespassers who are criminals and take the view that trespassers should not be owed any duties whatsoever. In fact, the term trespasser encompasses at least three categories. First, many trespassers are minors. Children are often attracted to play in locations that are inherently dangerous. They may do so even after seeing warnings to keep out or having been orally warned. A second category of trespassers refers to those who wander onto properties without any knowledge that they are trespassing. Are we comfortable saying that no duty should exist to protect those categories of persons? Only the third category, trespassers coming on to the property in full knowledge that they should not be there, includes criminals, and even this incorporates many persons who still lack criminal intent (example: an adult retrieving from private property an errant baseball in contravention of a “trespassers will be prosecuted” sign). For these reasons, trespassers are owed a duty of “common humanity” per text page 263. Even when the trespasser is a burglar, he or she should not be subjected to deliberate harm or danger unless the occupier is acting in self-defence. Punishment of the burglar occurs through the criminal justice system, not at the hands of the occupier. (Self-defence is not discussed in the textbook, but for the instructor who wants to expand on the area, it is worth noting that self-defence is reasonably narrow. As Lewis Klar notes in Tort Law, 5th ed. (Toronto: Thomson Reuters Canada, 2012) at 141, the defendant must prove that he was in a situation of “actual or threatened harm which necessitated the use of force and that the force so used was proportionate to the threat.” Students will likely find most controversial the obligation not to recklessly or intentionally harm criminal trespassers. Challenge them by asking whether, for example, in Canada, a country with no capital punishment, an occupier should be allowed to shoot at or otherwise harm a burglar who is posing no personal threat. Ultimately, retaining the obligations to trespassers is another important control against vigilantes in society. For the non-criminal categories of trespasser, it is an important protection. For children in particular, it is a further protection since they are often attracted to exciting locations but may lack the personal judgment required to protect themselves. As a further question on this topic, have students analyze Situation for Discussion 1. 2. What can businesses do to manage the risk of slip-and-fall incidents? Answer: As noted previously, and based on John W. Yeargain & Michael C. Budden, “Using risk management to avoid slip and fall accidents,” Entrepreneur (2001), online: Entrepreneur , there are the three main categories to be concerned about: (1) slip-and-fall inside the premises, (2) displays or improperly stacked goods causing injury, and (3) slip and fall outside the premises. See supra in the answer provided to the Critical Analysis question on page 270 accompanying the box Business Application of the Law: Slip and Fall. It is the first entry in this Instructor’s Manual chapter under IV. Explanation of Selected Features (supra). 3. The tort of false imprisonment places serious limitations on any action the retailer can take to detain suspected shoplifters. What are the pros and cons of these limitations? Are they fair? What are the countervailing interests at stake? How can retailers reduce the risks associated with apprehending suspected shoplifters? Answer: Protecting an individual’s liberty (from false imprisonment) and protecting an individual’s reputation (from false accusations) are considered more important than protecting property from theft. Because false accusations can easily be made by those with limited training in a highly stressful setting, strict limitations to their rights to detain have been devised. That is why the police are the only members of society who have been delegated broader powers of arrest. They have been given extensive training and are sworn to uphold the law. To reduce the risks associated with apprehending suspected shoplifters, a number of strategies could be suggested: • Start by reducing the amount of shoplifting by relying on preventative measures. See the analysis under Question for Review 11. It makes sense that when there is less shoplifting, there will be fewer occasions requiring the apprehension of shoplifters. The risk of a staff member committing a tort in the apprehension process is thereby reduced. • Ensure that staff are properly trained on the law as to when they can hold a suspected shoplifter (see page 277 of the textbook) to reduce the chances of being found liable for false imprisonment or false arrest. To avoid a claim of false arrest, inter alia, the rules on page 277 must be followed. • To avoid related tort claims, effective staff training is essential. See, for example, Paladin Security, “How to Handle a Shoplifter” (undated document), online: Paladin Security albeit from an American perspective. 4. The common law states that someone is liable for defamation just for repeating or passing on defamatory words he or she heard from someone else. This is called publication. Do you think that publication should be actionable? Why or why not? Answer: One rationale for actionability based on publication is that the person who first speaks or writes the defamatory words in question is not the only one who causes harm to the plaintiff. The individuals who repeat the defamation have also caused harm and should be held accountable by the law of tort. 5. The tort of interference with contractual relations means that a prospective employer is liable if he induces an employee to breach her employment contract with a third party and start working for him. Does this tort interfere too much with recruitment efforts in the marketplace? Why or why not? Answer: On the one hand, a prospective employer should be able to freely approach potential employees in order to fill the needs of his or her business. It would be unreasonable to suggest that an employer could only select candidates from the ranks of the currently unemployed. On the other hand, the target recruit is in an employment contract and interfering with that relationship can indeed cause serious loss to the plaintiff (i.e., current employer). The defendant should be liable to make good that loss based on culpability. Note too that the tort of interfering with contractual relations is altogether avoided, however, if that employee gives proper notice to the current employer and is not otherwise encumbered by a non-compete. It does not seem unreasonable to insist that the current employer’s interests are also taken into account in a recruitment context. 6. Do you agree that the intrusion upon seclusion tort should permit damages for distress, humiliation, or anguish or should the tort be limited to financial loss, if any, that arises from the tort? Answer: Invasions of privacy do not always or only cause financial loss but can nonetheless be devastating emotionally, particularly when sensitive information such as health and banking records are accessed. Damages for distress, humiliation, and anguish therefore serve a laudable, compensatory purpose. Situations for Discussion, page 291 1. Jason owns and operates a company, ABC Ltd., which he wanted to position to successfully bid on a contract to supply security in federal prisons. In its call for tenders, the Department of Supply and Services included a condition that tenderers like ABC Ltd. were to provide the names and qualifications of at least 25 senior security personnel who would service the contract. (The government’s goal with this condition was to ensure that the bidding company had the resources to deliver on the contract should it prove successful.) ABC Ltd. had no such employees but a leading company in the field, Prison Security Services Ltd., had 45 highly qualified security personnel on staff. On the side, Jason convinced these employees of Prison Security Services Ltd. to permit their names to be included in his company’s tender and to come to work for him immediately if the tender were successful. When Jason’s company proved to be the successful bidder, these 45 employees promptly joined his company. What tort has ABC Ltd. committed? Explain. [footnote deleted] Answer: This situation for discussion is based on ADGA Systems International Ltd v Valcom Ltd (1994) 43 OR (3d) 101 (CA) except that it has been drafted to side-step the more difficult question of when a director or officer is personally liable for a tort that he or she commits in pursuance of a corporate interest. Rather, the focus is more straightforwardly on the liability of the corporation itself for interfering with contractual relations. It would appear that this tort has been made out. Through Jason, ABC Ltd has committed the tort of interference with contractual relations specifically by inciting the employees of Prison Security Services Ltd to leave their employment without notice should its tender for the prison security contract prove to be successful. Though the commitment of the employees to do so was conditional on ABC Ltd successfully landing the tender contract, this does not change the analysis. When ABC Ltd was successful in securing the prison contract, the employees of Prison Security Services followed through on their promise to leave ABC Ltd. ABC Ltd knew about their contracts with Prison Security Services Ltd and acted with the objective of convincing them to do so. Since they did in fact join him, Prison Security Service’s action should be successful. 2. Mr. Favo slipped and fell on a small patch of ice outside a popular car wash. Mr. Favo was late for an appointment and was walking somewhat faster than usual just prior to taking the tumble. Ms. Daby, owner of the car wash, was proud of the 10-year safety record she had established up until this point. She attributes this safety record to being acutely aware of the problems ice causes in winter when wet vehicles exit the car wash, leaving puddles in their wake On a related front, Daby also held frequent staff meetings in order to emphasize how important it was to prevent ice formation and to salt the sidewalk according to a very strict schedule. The supervisor on shift when Favo fell was adamant that the area had been salted prior to the incident. He also conducted an inspection of the area immediately after the fall and found only a very small patch of ice had been missed Is Daby liable? Is Favo contributorily negligent? [footnote deleted] Answer: This Situation for Discussion is based on based on Foley v Imperial Oil Ltd, 2010 BCSC 797, 11 BCLR (5th) 125 aff’d 2011 BCCA 262, 307 BCAC 34.l. In British Columbia, where the Foley case occurred, section 3 of the Occupiers Liability Act provides that an occupier owes a duty “to take that care that in all the circumstances of the case is reasonable to see that a person ... will be reasonably safe in using the premises.” The general question—which would also apply in jurisdictions without occupiers’ liability legislation—is whether the defendants breached their duty of care and, more particularly, if, per Foley, “they had in place a reasonable system to safeguard against the presence of ice, and whether, at the time in question, those responsible for carrying out the system complied with it.” Based on the evidence, the court found the defendants liable. Though the defendants had a good safety record and an adequate system for the “usual danger that ice presented,” at para 61, the system was not adequate to address the “unusual danger created by the area around the car wash exit,” where ice buildup would pose a special risk on cold days. On a related front, there was no evidence that salt had been applied within an hour before the plaintiff fell, at para 94. And according to the court, at para 69, The defendants maintained no regular patrol for ice, but left the frequency of patrols for ice to the employees.... [A shift supervisor] testified that when he did patrol, he occasionally found ice, and then he would apply fresh salt. So the presence of ice would move him to reapply salt. This indicates either that he was not salting enough, or the defendants were no sufficiently addressing the problem.... [The shift supervisor and the franchisee] knew that dripping water from cars would wash the salt away. The absence of warning signs or cones on the sidewalk outside the car wash was also problematic. As the court noted at para 78, “[t]he hazard posed by the ice was reasonably foreseeable in the circumstances and the efforts made by the defendant by way of salting were insufficient to protect against the hazard. It would have been easy for the defendants to put up signs that warned of the risk of ice.” On the facts of the hypothetical in Situation for Discussion 2, it is unclear when salt was last applied, but either it was not soon enough or it was not enough salt, given that Favo did fall on ice that had accumulated. As well, there is no suggestion on the facts that warning signs were in place—another indication that Dabo did not take reasonable care. The court in Foley also found that there was no contributory negligence—that the plaintiff had indeed taken reasonable care for his own safety. In Foley, the plaintiff was walking at a normal pace and watching where he was going. In the hypothetical, Mr. Favo is walking more quickly than usual as he was late for an appointment. He is therefore a slightly less strong position than Mr. Foley’s. However, given the apparent lack of warning signs on the sidewalk by the car wash exit in the hypothetical, there would have been no warning to Favo that he should proceed with caution. On this basis, a court in this hypothetical is unlikely to find contributory negligence. 3. Great Food Restaurant serves a very popular buffet style menu in central Saskatchewan. During one dinner service, a patron became ill and vomited on one of the buffet tables. A supervisor and employee tended to the situation by removing most of the food from the buffet itself, wiping up with a cloth soaked in a weak bleach solution and mopping the floor. They then replaced the food in the buffet and carried on business. Several people who subsequently ate at the restaurant became ill with the Norwalk virus, a highly contagious pathogen that is easily spread if not deactivated with a sufficiently strong disinfecting solution. A small local newspaper ran a story about the incident, with the headline “Vomit serves up virus at buffet.” The article suggested that the illnesses were caused by “eating from a buffet that a customer had vomited on.” It also quoted a health officer who said the virus was likely spread by contact with contaminated surfaces and “may not have involved the buffet food at all.” There was no time to speak to Great Food Restaurant before the story had to go to press. Had the newspaper done so, it would have learned from the manager his view that the illnesses were not caused by the restaurant food. Great Food Restaurant has since suffered a large drop in business and wants to sue the newspaper for defamation. Will its action be successful? [footnote deleted] Answer: This Situation for Discussion is based on PG Restaurant Ltd v Northern Interior Regional Health Board (2005), 211 BCAC 219, leave to appeal refused by [2005] SCCA No 270. Based on PG Restaurant Ltd, the success of the owner’s action for defamation in this situation will depend—at least in part—on how the court regards the headline in question. At trial, the judge held that the article was defamatory. The restaurant’s reputation suffered from the public impression conveyed by the article that people had become ill from eating food with vomit on it and that the vomit had not been adequately cleaned off the buffet table. The court also held that the newspaper had not provided an adequate defence and so awarded the restaurant damages of more than $630 000—one of the largest awards of its kind in Canadian history. On appeal, the court found that the statements in the article, although injurious to the restaurant’s reputation were justified. The trial judge had mistakenly concentrated on only the headline and the first couple of lines of the story. In fact, the article, read as a whole, did not leave the ready with the impression that patrons consumed food with vomit on it, but merely described an event wherein a patron vomited on food and the cleanup was not adequate to eradicate the virus. As these allegations were true, the newspaper successfully advanced that defence. The Situation for Discussion adds a fact not present in the real case, namely, that there was no time to speak to Great Food Restaurant before the story had to go to press and had the newspaper done so, it would have learned from the manager his view that the illness was not caused by the restaurant food. This makes it much more difficult for the newspaper to rely on the defence of responsible communication on matters of public interest, but it would seem that the newspaper does not need this defence in any event. It has already succeeded on the defence of justification. 4. Jamie and Shannon lived adjacent to a golf course. Portions of their backyard are unfenced so that they can enjoy an unobstructed view of the 9th hole. Several matters are causing them increasing concern. First, the golf course is refusing to take steps to prevent golfers from driving golf balls into Jamie and Shannon’s yard. Numerous golf balls crash into their garden and house every day, causing damage to the house and making it impossible for the couple to sit outside in their backyard during golf season. Beyond this, some golf cart drivers are taking short cuts over Jamie and Shannon’s property to get to the next hole. The golf club has refused to stop its patrons from doing so. You may assume that the law makes the golf club responsible for the conduct of its golfers. On this basis, what action or actions can Jamie and Shannon take against the golf club and why? [footnote deleted] Answer: This Situation for Discussion is based on Cattell v Great Plains Leaseholds Ltd 2008 SKCA 71. The appellate court agreed with the trial judge that the plaintiff had established the tort of nuisance. At trial, here is what the court stated (2006 SKQB 183): 30) Private nuisance is defined as an unreasonable interference with the use and enjoyment of land. “This may come about by physical damage to the land ... or injury to the health, comfort or convenience of the occupier” (see Allen M. Linden, Canadian Tort Law, 7th ed. (Markham, Ont.: Butterworths, 2001) at 525. 31) Whether the operation of a golf course adjacent to an individual’s land is defined as being an unreasonable interference with the use and enjoyment of that land appears to depend on the nature and frequency of the behaviour complained of. 32) The plaintiffs’ position is that the golf balls which are hit from the adjacent golf course onto their property is and continues to be an interference with the use and enjoyment of their property. They argue that not only is the interference unreasonable, it is potentially dangerous to them and their families. 33) There are a number of recent cases from various jurisdictions that have examined whether golf balls flying from an adjacent golf course onto an individual’s property constitutes a nuisance. Our own Court of Appeal examined this issue in the case of Lakeview Gardens Ltd. v. Regina (City), 2004 SKCA 110 (CanLII); [2005] 1 W.W.R. 651; (2004), 254 Sask. R. 212. In that very specific fact situation the court held that a few golf balls of 10-20 over a five-year period, with limited damage to property did not constitute a continuing nuisance. 34) If we look to the other jurisdictions for some guidance as to what number of errant balls might fairly constitute a nuisance, it would appear that anything from 200 golf balls and up over the span of a year is definitely an unreasonable interference with the use and enjoyment of one’s own property. Mr. Tanner, an expert in golf ball velocity, said that it is hard to estimate how many errant golf balls being hit into someone’s yard would constitute too many. Given the fact that the majority of the balls are hit at speeds of between 100 and 120 miles per hour, even a few can, in his opinion, cause considerable damage and serious injury when they hit something. 35) Here, the number of golf balls being hit onto the adjacent properties from the defendant golf course is far greater than the number cited in many of the cases put forward. In fact, the evidence of everyone, the defendant operator of the golf course and the plaintiff, Cattell, affirms that no one ever anticipated that the problem would be this bad. The Situation for Discussion also establishes the ingredients of the tort of trespass since golfers are taking short-cuts over the homeowner’s property. Chapter 12 defines trespass to land as the wrongful interference with someone’s possession of land. There is also an argument to be made that the golf course was negligently designed but there are insufficient facts given in the Situation for Discussion to explore this possibility very far. 5. Randall was enjoying an evening at a local BC pub but ended up drinking too much and becoming obnoxious with the wait staff. He was cut off from bar service. Next, Rachel (a notorious troublemaker who also had been refused service at the bar) walked up to Randall and his girlfriend and insulted them both. Matters went downhill from there. Randall’s girlfriend and Rachel began to scuffle at which point Randall started yelling. There were two bouncers at the pub that night, Reggie and Joe. The bouncers, who were both considerably larger than Randall, overreacted to the situation. With great force, they both pushed Randall out the door of the pub onto the landing of the stairs leading down to the street. As Randall stood there on the landing, Joe struck Randall with tremendous force, knocking out his front teeth. (Being otherwise underemployed, Joe wanted to impress Reggie with his toughness that night, hoping to secure more shifts.) Randall fell down the stairs to the street, hit his head on the sidewalk and was seriously brain injured. Discuss the tort principles that arise, based on this chapter and Chapter 11. Who will be sued and for what? Answer: Randall is injured by Joe and Reggie. They will be sued for assault, battery, and negligence. Assault is the threat of imminent physical harm by disturbing someone’s sense of security. Battery is the actual physical contact or violation of that bodily security. Though the contact need not cause action harm, it most certainly did here. As for the negligence claim, Joe and Reggie as bouncers, they owe a duty of care to Randall. In the case upon which this Situation for Discussion is based, the court stated: the special legal relationship between a bouncer and a patron does not require the bouncer to prevent the patron from getting drunk, or even from injuring himself while drunk. The bouncer's duty is to act reasonably. What he must endeavor to do is to prevent the creation of reasonably foreseeable risks to the patron. If a drunken patron is standing on the landing or top step … and you punch him, there is a foreseeable risk that he will go backwards down the steps and hit his head on the cement. See Tardif v Wiebe [1996] B.C.J. No. 2254 at para 6. Thus, there is a duty of care based on the special legal relationship between bouncer and patron; the standard of care was breached because the bouncers failed to act reasonably when they overreacted to the situation. Joe was negligent in throwing the punch and Reggie was negligent for not properly instructing him in how to react in such a situation. The breaches of the standard of care by the bouncers caused Randall injury, in this case, a serious brain injury. There is no issue of remoteness of loss. There is clearly a sufficiently close relationship between the defendants’ action and the plaintiff’s loss. Joe and Reggie are employed by the local BC pub. The pub, as their employer, will be successfully sued by Randall for vicarious liability since the employees were acting on its behalf, albeit badly. Here, there was a significant connection, based on the Supreme Court of Canada’s decision in Blackwater v Plint (and as discussed in Chapter 10) between the conduct authorized by the employer—providing a safe pub environment—and the wrong—causing Randall grievous bodily harm. The hotel will also likely be liable for its own negligence in not ensuring that Joe completed his inhouse training before being allowed to work in the pub or otherwise be properly supervised. 6. Mandrake Ltd. owns and occupies an office building. Mandrake complains about the noise and vibration coming from the nearby subway system of the Toronto Transit Commission. Will Mandrake be successful in an action for nuisance? In particular, would the ordinary and reasonable resident of that locality view the disturbance as a substantial interference with the enjoyment of land? What factors will a court consider in determining whether there is nuisance or not? At what point should legitimate activities be curtailed because of the unavoidable consequences to other nearby businesses? [footnote deleted] Answer: This Situation for Discussion is based on Mandrake Management Consultants Ltd v Toronto Transit Commission [1993] OJ No 995, 62 OAC 202. Mandrake will probably not be successful in their application for nuisance. Although there is no exact definition of what constitutes nuisance in the common law, not every invasion of a person’s interest in the use and enjoyment of his land is actionable. The problem is the reconciliation of the conflict, which occurs when competing interests come into contact. Nuisance claims may be divided into two types: (1) physical damage—those that cause physical damage to property; and (2) non-physical damage (annoyance)—those that create a loss of amenities or interfere with tranquility and amount to “sensible personal discomfort.” The courts attempt to circumscribe the ambit of nuisance by looking to the nature of the locality in question and asking whether the ordinary and reasonable resident of that locality would view the disturbance as a substantial interference with the enjoyment of land. Among the criteria employed by the courts in delimiting the ambit of the tort of nuisance are • the nature of the locality in question • the severity of the harm • the sensitivity of the plaintiff • the utility of the defendant’s conduct The law of nuisance has developed as a means of balancing the interests of adjoining property owners in the legitimate use of their properties. That balancing can sometimes be delicate. In this case, each owner’s use of its property is a legitimate one. The balancing of the parties’ competing interests required a careful weighing of the four factors above. The overall public interest in having a subway operate, in this case, trumps the nuisance caused to the plaintiff. Even if it were a nuisance, the defence of statutory authority would be applicable, since a certain amount of noise and vibration were inevitable in the operation of a railway. Legitimate activities will be curtailed when they substantially and unreasonably interfere with another’s enjoyment and use of her property. Although some form of nuisance can be expected and business is required to “give and take, live and let live,” this expectation will not go beyond minor interference. 7. Beginning in 1955, Disney started opening outdoor amusement parks around the world, and now owns a number of parks, including those in California, Florida, Europe, and Japan. Each amusement park contains various theme parks, one of which is called Fantasyland. In 1981, Triple Five opened an indoor amusement park in the West Edmonton Mall, also called Fantasyland. Has Triple Five committed the tort of passing off? What would a court take into account in determining whether the tort has occurred? If the tort is made out, do you think it is legitimate to give Disney a monopoly over the word “Fantasyland” in association with all amusement parks? [footnote deleted] Answer: This Situation for Discussion is based on Walt Disney Productions v Triple Five Corp, (1994) 17 Alta LR (3d) 225. Triple Five has committed the tort of passing off. The essence of a passing-off action is the misrepresentation and the resultant confusion in the public mind that causes or is likely to cause damage to the property interest of the plaintiff. The foundation of such an action is the existence of a property right in the goodwill and reputation associated with a trade name. Although damages are often measured by the loss of business, the most important aspect of damage is harm to the property interest of the plaintiff or the likelihood of it. The law of passing-off does not require proof of actual confusion that leads to specific pecuniary damages. Passing-off does not require proof of any intent to deceive or misrepresent. The same set of rules applies to intentional and inadvertent misrepresentation. Proof of deliberate misrepresentation may more readily result in a finding of confusion and may give rise to increased damages, but it does not affect the basic nature of the action. Passing-off protects the goodwill and reputation that a company carrying on business outside the jurisdiction of the court acquires within the jurisdiction. Where a passing-off action involves the misappropriation of a name from another field of endeavour or another jurisdiction, damages are the harm that results or may result to the goodwill or reputation that the plaintiff has established. It may also include the loss of the right to exploit that reputation within the territorial jurisdiction of the court, or the exploitation into an unrelated field of endeavour, whether or not the plaintiff has any current intention of venturing into that field or geographic area. The defendants have deprived the plaintiff of the right to control what happens to the reputation and goodwill associated with that name. These actions have diminished the plaintiff’s property right and its potential or value in the jurisdiction. When a company like Disney has created goodwill in the term “Fantasyland,” it is accorded a monopoly over the word, to the exclusion of all others, in relation to amusement parks. It is interesting to note that a similar action was brought against Triple Five by Disney over the use of the term Fantasyland Hotel. In that case, the court concluded that Disney had not established the goodwill and reputation in connection with hotels as they had with the amusement parks. 8. Mr. Bahner was hosting a dinner for friends at a restaurant in the Bayshore Inn, Vancouver. The group ordered one bottle of wine and, at 11:30 p.m., the waiter asked if they would like another, to which they agreed. There was still wine in the first bottle however. At 11:50 p.m., Bahner was told by the waiter that, due to a law in force in British Columbia at the time, all the wine on the table had to be consumed before midnight. The plaintiff considered this to be impossible without resulting in drunkenness and therefore asked if they could simply take the second bottle away with them at the end of the evening. Bahner was advised by the waiter that this, too, was against the law. The plaintiff paid for the dinner itself and the first bottle of wine but refused to pay for the second, saying he would just leave it on the table. The second bottle was open but had been otherwise left untouched. In response, the hotel manager called a security guard. Bahner and his guests stood up and tried to leave. The security guard blocked the main restaurant exit, saying, “You cannot leave.” When Bahner again refused to pay, the security guard called the police. Since Bahner was not being permitted to leave the restaurant, he sat down at a table nearer the door and waited with his guests. He was then arrested and spent the night in jail before he was released. Does Mr. Bahner have a successful action for false imprisonment against the restaurant owner? Why or why not? How could such an unfortunate situation have been avoided to begin with? [footnote deleted] Answer: This situation is based on Bahner v Marwest Hotel Co (1969), 6 DL (3d) (BCSJ), aff’d (1970) 12 DLR (3d) 648 (BCCA). The plaintiff’s claim for false imprisonment should succeed, if the Bahner decision is any indication. Counsel for the hotel argued that there could be no false imprisonment since there were other exits from the restaurant that the plaintiff could have accessed. The court rejected this argument, stating that if the plaintiff had tried to leave via those other exits, he could “reasonably expect to be restrained by force.” And as the court notes, the plaintiff “was not required to make an attempt to run away” at para 14. By virtue of the law of vicarious liability, the restaurant is liable for the torts of its employees and agents. Regardless of whether the customer was right or wrong in refusing to pay for the wine, this situation could have been avoided by management showing a sense of proportion and not escalating the situation. Solution Manual for Canadian Business and the Law Philip King, Dorothy Duplessis, Shannon O'byrne 9780176570323, 9780176509651, 9780176501624, 9780176795085