MGT 393 - BUSINESS LAW

Class Five/Six Handout/agenda

TORT LAW
What is it?
tort wrongdoing in private law (the term tort is from the Latin word tortus means
wrong
role: to compensate victims for harms suffered from activities of other;
punishment is the role of the criminal law;
what is a tort continues to evolve
there are - intentional torts liability for a deliberate act (e.g. battery) and
unintentional torts;
historically many crimes also result in a tort action
negligent torts liability for careless behaviour
What is vicarious liability?
being liable for anothers tort (employer for employee) allows a victim to sue both
the employer and employee;
rationale employer likely controls employee; employer likely has insurance; idea
of make the profit also should bear risk of loss
General remedies for tort?
tort - damages backward looking put the plaintiff monetarily in the place as if the
tort never occurred
o damages (generally compensatory)
o punitive damages not as common (where reckless disregard for the other
party; vindictive or malicious)
o injunction
o remember also court/legal costs
Alternative scheme
workers compensation (cannot sue your employer for tort accident in workplace)
some provinces no fault insurance
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NEGLIGENCE (Class Five)
I. NEGLIGENCE - DEFINITION AND CHARACTERISTICS

it is a breach of duty-- a duty to take care

the more dangerous the circumstances - required care increases
negligence is not a fact - but a conclusion of law from acts of omission or omission
negligence is not absolute - relative to some circumstances of time, place or person;
action for negligence may arise - independent from contract or out of contract

II. ELEMENTS OF NEGLIGENCE

1. THE PLAINTIFF MUST BE OWED A DUTY OF CARE BY THE DEFENDANT

must be a duty owed to the plaintiff

duty to take care is the duty to avoid doing or omitting to do anything, the doing or
omitting to do which may have as its reasonable and probable consequence injury to others and
the duty is owed to those to whom injury may reasonably and probably be anticipated if the duty
is not observed

a moral duty is not a basis to found action for negligence;

duty of government can sue the government may owe a duty (e.g. highway)
MGT 393 HANDOUT TORT LAW

determinants of duty of care

reasonable foreseeability ask Would a reasonable person in similar circumstances
have foreseen the injury to the plaintiff (does not have to be exact injury)
proximity
no public policy rationale to preclude
policy considerations may negate duty
-no liability even if reasonably foreseeable risk
examples of duty-defeating policies
-pregnant woman owes no duty to unborn child
-protection from intrusive burden

recent cases have said:

(1) reasonably foreseeable (2) there must be a relationship of proximity between the plaintiff
and defendant and (3) it must be 'fair, just and reasonable' to impose liability
2. THE DEFENDANT MUST HAVE BREACHED THE DUTY

must act as a reasonable person

must be a foreseeable harm
idea mythical person the reasonable person as a standard and measurement against
which to compare the alleged negligent party;
reasonable person presumed to possess normal intelligence and would exercise
reasonable care
consider a statute and breach of a statute (implications)
a breach of a statutory duty will not lead to automatic liability for damages for injuries
if statute imposes a penalty for a breach -- no automatic right of action for negligence
statute can be used as evidence of what should have been done

3. INJURY OR DAMAGE MUST HAVE OCCURRED

if the negligence does no damage no action lies; actual damage must be proved
not sufficient to prove merely an accident and negligent act of defendant -- must prove that
accident was due to the negligent act
mental and nervous shock is nothing more than a particular type of damage;
consider thin skull (egg shell) rule

4. CAUSATION (idea of a causal connection)

to constitute a cause of action the breach must be the cause of the damage; but for
judges have said: efficient and effective cause; direct cause; immediate cause; proximate
cause;
consider also remoteness of damages reasonably foreseeable one which
would occur to the mind of a real man in the position of the defendant; CONSIDER
Mustapha case (fly in bottled water) court found that mental illness was not a
reasonably foreseeable type of damage in the circumstances; average person would not
suffer a mental disorder given these facts

for remoteness - consider Mustapha v. Culligan of Canada Ltd. SCC

(fly in the water bottle)
4.
Were the Plaintiff's Damage Caused By the Defendant's Breach?
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The fourth and final question to address in a negligence claim is whether the defendant's breach
caused the plaintiff's harm in fact and in law. The evidence before the trial judge establishes that the
defendant's breach of its duty of care in fact caused Mr. Mustapha's psychiatric injury. We are not asked to
revisit this conclusion. The remaining question is whether that breach also caused the plaintiff's damage in
law or whether it is too remote to warrant recovery.

MGT 393 HANDOUT TORT LAW

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The remoteness inquiry asks whether "the harm [is] too unrelated to the wrongful conduct to hold the
defendant fairly liable" (Linden and Feldthusen, at p. 360). Since The Wagon Mound (No. 1), the principle
has been that "it is the foresight of the reasonable man which alone can determine responsibility" (Overseas
Tankship (U.K.) Ltd. v. Morts Dock & Engineering Co., [1961] A.C. 388 (P.C.), at p. 424).
Mustapha failed to show that it was foreseeable that a person of ordinary fortitude would suffer serious injury
from seeing the flies in the bottle of water he was about to install. Unusual or extreme reactions to events
caused by negligence are imaginable but not reasonably foreseeable.

DEFENSES:
VOLENTI NON FIT INJURE (aka Voluntary assumption of risk)
no act is actionable by a person who has expressly or impliedly assented to it; idea in law that
a man cannot enforce a right which he has voluntarily waived (essentially the plaintiff has
voluntarily put him/her self in danger and thus assumed the legal as well as physical risk
this is typically a complete bar to recovery.
CONTRIBUTORY NEGLIGENCE
contributory negligence is set up as a defense
must prove to judge/jury that the injured party did not in his own interest take reasonable care
of himself, and contributed, by that want of care, to his own injury; court apportions the
damages.

OTHER TORTS: (Class Six)

ABSOLUTE DUTY TO PREVENT INJURY [STRICT LIABILITY]

WHERE A PERSON WHO FOR HIS OWN PURPOSES BRINGS ON HIS LAND AND
COLLECTS AND KEEPS THERE ANYTHING LIKELY TO DO MISCHIEF IF IT ESCAPES,
HE MUST KEEP IT AT HIS PERIL AND IS ANSWERABLE FOR ALL THE DAMAGES
SHOULD IT ESCAPE
TO SUMMARIZE PRINCIPLE IN RYLANDS V. FLETCHER
A) MUST BE ESCAPE
B) NON NATURAL USE OF LAND

OTHER TORT ISSUES TO BE REVIEWED IN CLASS:

OCCUPIER'S LIABILITY
NUISANCE
ASSAULT
BATTERY
FALSE IMPRISONMENT
MALICIOUS PROSECUTION
DEFAMATION
BREACH OF FIDUCIARY DUTY
NEGLIGENT MISREPRESENTATION
PRODUCT LIABILITY
PROFESSIONAL LIABILITY
Note other torts exist. This list is not intended to summarize all tort actions.

MGT 393 HANDOUT TORT LAW

NEGLIGENT MISREPRESENTATION expanded (important as also linked to contract law)

Consider 4 elements previously discussed in negligence
Issue: Is a duty of care owed.
Consideration: Hercules Management v. Ernst & Young (SCC)
Test: 1. Would the defendant reasonably have foreseen that the plaintiff would rely on the
misrepresentation?
[Would the reliance by the plaintiff in the circumstances, be reasonable (e.g. consider did the
defendant have a direct or indirect financial interest in the transaction; did the defendant possess
special skill or judgment or knowledge (e.g. professional accountant); was advice provided in a
business setting; was advice given deliberately; was advice given in response to a request)]
Was there any public policy reason that should preclude liability (e.g. indeterminate liability)?
2. Was the information used for the intended purpose?
[ note: fraudulent misrepresentation same 4 elements plus intent to deceive]

MGT 393 HANDOUT TORT LAW