In my opinion such cases as Cattle v. Stockton Waterworks Co. (1875), L.R. 10 Q.B. 453, and Weller & Co. v. Foot & Mouth Disease Research Institute, [1965] 3 All E.R. 560, should be seen as specific examples of a denial of recovery on the basis of absence of proximity, or remoteness of damage, or both, and not as establishing a principle that damages can never be recovered for economic loss if the loss arises from thebreach of a contractual relationship between one victim who suffers economic loss and another victim who suffers physical injury. The answer to such problems lies not in a uniform denial of recovery but in an application of the customary and sometimes difficult questions relating to proximity, foreseeability, causation and remoteness.
Suppose an airline has a policy of discharging pilots who suffer from a medical disability and requires its pilots to undergo a medical examination each year by a doctor, selected by the airline, who knows the purpose of the examination. Suppose the doctor carelessly and incorrectly diagnoses a disability and the pilot is discharged. Would the pilot, as a matter of legal policy, be denied a cause of action against the doctor? I do not think so. Yet the loss suffered by the pilot would be economic loss arising from the doctor's negligent interference with the pilot's contractual relations with the airline. I leave unanswered the question of what difference it would make, if any, if the doctor was a salaried employee of the airline.
The next question is whether, if there were a duty
of care owed by the Minister
of Finance or the Superintendent
of Insurance to the appellants and a
breach of that duty, there could in principle be recovery for purely economic loss. Counsel for the Crown contended that the kinds
of cases in which there could be recovery for economic loss that is not consequential upon personal injury or property damage were limited to those represented by
Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd.,
[1964] A.C. 465, and
Rivtow Marine, supra: negligent misrepresentation, and negligent failure to warn
of a dangerous defect in a product. There is in my opinion nothing in subsequent judicial commentary on this question which suggests that recovery for purely economic loss is to be limited in principle to these categories
of cases. In
Agnew-Surpass Shoe Stores Ltd. v. Cummer-Yonge Investments Ltd. (1975), 1975 CanLII 26 (SCC), 55 D.L.R. (3d) 676 at pp. 692-3, [1976] 2 S.C.R. 221 at p. 252, [1975] I.L.R. 1171, there was the following general reference to the significance
of Rivtow Marine:
"It is now settled by the judgment of this Court in Rivtow Marine Ltd. v. Washington Iron Works ... that recovery for economic loss caused by negligence is allowable without any recovery for property damage."
3. A concurrent or alternative liability in tort will not be admitted if its effect would be to permit the plaintiff to circumvent or escape a contractual exclusion or limitation of liability for the act or omission that would constitute the tort. Subject to this qualification, where concurrent liability in tort and contract exists the plaintiff has the right to assert the cause of action that appears to be most advantageous to him in respect ofany particular legal consequence.
The validity of the elements he considered important in finding liability for pure economic loss (at p. 29):
1. Knowledge of the claimant as a specific individual or identity who is likely to suffer the damage as opposed to knowledge of a general or unascertained class ofpeople.
2. Not only must it be established that loss was probably foreseeable but the precise nature of the loss should have been foreseeable.
3. There must be a sufficient degree of proximity between the act committed by the tortfeasor and the injury complained of, that an ordinary right thinking person would feel that the tortfeasor is morally bound to compensate the victim (Caltex Oil Australian Property Ltd. v. the Dredge Willemstad). This has also been expressed in terms of sufficient proximity of the property to lead to a duty of care to the claimant.
In my judgment, taken collectively, if not, perhaps, individually,
these elements demonstrate that sufficient proximity giving rise to a duty
of care owed by the appellants (defendants) to the respondent (plaintiff) existed; the case is a compelling one for recovery
of the loss claimed. In the exceptional circumstances
of this case, I can find no reason in policy for negativing this duty or for denying recovery
of the loss. In so saying I wish once more to emphasize that the issue before us is solely concerned with liability for pure economic loss suffered by the respondent (plaintiff) and not at all with claims
of the same nature advanced by other users
ofthe bridge.
.
.
See the The Queen in Right of Canada v. The Queen in Right of Prince Edward Island, 1977 CanLII 1726 (FCA)
.
See also the Dorset Yacht case.
.
B.M. (Guardian ad litem of) v. British Columbia, 2009 BCCA 413 (CanLII
.
Johnson et al. v. Adamson et al., 1981 CanLII 1667 (ON CA)
.
Principal Group Ltd. (Trustee of) v. Alberta, 1991 CanLII 6230 (AB QB)
.
Cumby v Snow and Canada Mortgage and Housing Corporation, 1986 CanLII 2421 (NL CA)
.
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