AuthorZolf, Benjamin


In this article, I suggest that the liability rule from Winnipeg Condominium No 36 v Bird Construction Co(1) is compatible with a rights-based theory of private law if it is reconceptualized as negligent performance of a service. This reassessment is prompted by Deloitte and Touche v Livent Inc (Receiver off)(2) and 1688782 Ontario Inc v Maple Leaf Foods Inc,(3) two recent cases which update the Supreme Court of Canada's jurisprudence on recovery for pure economic loss in both negligent supply of shoddy goods and negligent misrepresentation or performance of a service. These cases suggest the court has moved toward a rights-based theory of private law, at least in tort. Released in 1995, Winnipeg Condo remains the Supreme Court's landmark decision on the negligent supply of shoddy goods,(4) and it is arguably incompatible with a rights-based theory. To render them compatible, I argue that the tortious wrong in Winnipeg Condo should be reconceptualized as negligent performance of a service. In order to do so, some recent jurisprudential developments of the tort need to be scaled back to avoid imposing a requirement that the defendant subjectively intends that the plaintiff rely on their performance of a service. As I will argue, subjective intent should have no place in determining whether one party owes another a duty in negligent misrepresentation or performance of a service. If recent developments are adjusted accordingly, Winnipeg Condo can and should be reconceptualized as negligent performance of a service.

In section 2, I argue that Maple Leaf signaled a move toward a rights-based theory of private law in both of the above categories of recovery for pure economic loss, but that some tension arises from the court's attempt to fuse the rights-based approach with Winnipeg Condo and the negligent supply of shoddy goods. Winnipeg Condo's focus on the unfeasibility of abandoning a residential property is not compatible with the rights-based account. While I am a proponent of the rights-based theory of private law, a defence of its merits is beyond the scope of this article. In what follows, I suggest only that the Supreme Court seems open to the rights-based view, and that Winnipeg Condo must be reconceptualized to be compatible with it.

In an effort to make the analysis of negligent performance of service consistent with Winnipeg Condo, I argue in section 3 that the subjective intent interpretation of Maple Leaf should be discarded. Despite its apparent endorsement by the Court of Appeal for Ontario, such an interpretation is inimical to the overarching principles of a rights-based theory of private law, because it improperly gives relevance to a factor that is normatively relevant to only one of the parties to the litigation. I argue that it should be replaced with an objective intent standard familiar from the law of contract formation. This new standard is neither radically revisionary nor incompatible with the Cooper framework, which provides the basis for a duty of care in Canadian tort law.

Finally, in section 4, I argue that Winnipeg Condo should be reimagined as recovery in negligent performance of a service to achieve compatibility with a rights-based theory of private law. In Winnipeg Condo, a condominium corporation was awarded the costs of rendering safe a negligently-built condominium against a construction company that built it, with whom it was not in contractual privity. I argue that the act of building a permanent structure manifests an objective intent to others, including subsequent buyers, that they can rely on it having been built non-negligently. The resulting view is a rights-based account of the liability rule in Winnipeg Condo. I then respond to some objections to this argument. First, the fact that the parties never communicate directly is not an issue, because liability for negligent performance of a service does not depend on the existence of communication. Rather, liability depends on the existence of a relationship between plaintiff and defendant that would lead a reasonable person to believe the defendant intended the plaintiff to rely on the performance of a service. Second, the fact that this looks like a transmissible warranty is at best a policy consideration that might negate a prima facie duty, but does not in the context of residential structures.



    In Maple Leaf, the Supreme Court of Canada considered a claim for pure economic loss arising from the negligent supply of shoddy goods or structures, namely the supply of potentially contaminated ready-to-eat meats to Mr. Sub franchisees.(5) It was the first time the court had considered a negligent supply of shoddy goods claim since Winnipeg Condo and therefore its first time reviewing the liability rule that case established.(6)

    Writing for the majority in Maple Leaf, Justices Brown and Martin clarified one proposition from Winnipeg Condo and affirmed another. They clarified that danger to person or property is the "linchpin" of the analysis in Winnipeg Condo, and that the liability rule from that case allows a plaintiff to recover only for economic loss unavoidably incurred in averting that danger.(7) This broke new ground: while Justice La Forest, writing for the court in Winnipeg Condo, was deliberately silent on whether contractors can be liable for economic loss arising from non-dangerous defects, Brown and Martin JJ went further and ruled out such liability, reasoning that its basis "vanishes where the defect presents no imminent threat."(8)

    The Maple Leaf majority affirmed, or at least declined to reconsider, La Forest J's position that "a choice to 'discard' a home instead of repairing [it] is no choice at all," since for most people, a home is a long-term investment and abandoning it is not a realistic option.(9) Feasibility of abandonment does otherwise play an important role in the analysis, however: where a plaintiff can feasibly discard the defective or dangerous item, they must do so, and the defendant will be liable at most for reasonably foreseeable costs associated with discarding it.(10) The court seems to accept La Forest J's view that it is unrealistic to expect people to discard residential properties, making such properties an exception to the general rule that dangerous objects should be discarded if possible.

    A subtle tension exists between the court's danger-as-linchpin view and its acceptance of La Forest J's position that it is unfeasible to discard a residential property. The former reflects a clear theoretical commitment to a rights-based account of the interests protected in tort. The latter invites policy considerations alien to the rights-based account: the fact that it would be too costly for most people to abandon their residential property has no bearing on the private rights others have against them.(11)


    The Justices' language in Maple Leaf reflects an allegiance to the view that private law only protects against conduct that interferes with rights the plaintiff possesses to the exclusion of the defendant. Judicial support for this view of private law goes at least as far back as Justice Cardozo's judgment in Palsgraf v Long Island Railroad Co.(12) Ernest Weinrib points out that although Cardozo J's reasons focus on the unforeseeability of the plaintiff's injury, he also insists that "negligence is not actionable unless it involves the invasion of a legally protected interest, the violation of a right."(13)

    Arthur Ripstein recently defended the right-based account in Private Wrongs, writing "I wrong you only by interfering with something to which you have a right, or, as I shall put it, something you already have."(14) What you "already have," in his view, is your person (including your body and your mental capacities) and your property.(15) These are the "means" by which you pursue your purposes, and it is up to you alone what purposes you pursue using your means.(16) For Ripstein, a tortious wrong consists of someone else usurping your role as "in charge of" your means by determining the purposes to which they are put without your authorization; either "directly," by using them without permission, or "indirectly," by damaging them.(17)

    By contrast, interference with things to which you have no right does not constitute a tortious wrong. You have no right to a view, so my blocking your view does not wrong you. You have no right that I avoid damaging a third party's property, so my doing so does not wrong you. You have no right to your customers' patronage, so my offering them a better deal does not wrong you either.(18)

    Interference with your means, to which you by definition have a right, is misfeasance. Interference with things to which you have no right is nonfeasance. Ripstein describes this distinction as "between wrongfully doing something to the plaintiff and failing to do something for the plaintiff."(19) In the same vein, Peter Benson identifies misfeasance as tracking the presence or absence of "an interest rightfully belonging to the plaintiff to the exclusion of the defendant."(20) Like Ripstein, Benson sees misfeasance as "rooted in the idea of the exclusive, rightful control over one's body and things as against others."(21) To make a private claim against the defendant, the plaintiff must be able to assert rightful control of something.(22)

    For both Benson and Ripstein, legal rights are a prerequisite of, and interference with them the basis for, any possible private legal claim--hence the 'rights-based' view of private law. Interference with your body and property is actionable because you have a right to your body and property. Interference with someone else's property is not actionable (for you, at least) because you have no right to someone else's property.

    The Supreme Court of...

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