BLAW 2911: Commercial Law 1

Module 3: Torts
Activity 1: Reading—Introduction to Tort Law
Chapter 10 “Questions for Review” Solutions

1. What does the term “tort” mean?

The word tort describes any harm or injury caused by one person to
another—other than through breach of contract—and for which the law
provides a remedy. A tort is a wrong to another person; in particular, it is
the interference with another’s person, property, or reputation.

2. Give an example of a tort.

Any example of a tort is acceptable. On page 239 of the text there are a
number of examples:

• Parking garage operators might rely on the tort of trespass when

drivers leave their cars in the lot but fail to purchase the required
ticket.

• A customer purchases a vehicle based on the vendor’s intentional

representation that the vehicle has a new engine when, in fact, it does
not.

• When a bar over-serves a customer, it may be found negligent if that

intoxicated customer is injured or causes injury to others.

3. What are the two main categories into which torts are organized?

The two categories of torts are those committed intentionally and torts
committed through negligence or unintentional torts.

10. What is the purpose of damages in tort?

The primary purpose is to provide financial compensation for the harm

caused to the plaintiff by the defendant’s culpable conduct.

15. Explain the difference between pecuniary and non-pecuniary damages.

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Pecuniary damages provide compensation for out-of-pocket expenses, loss

of future income, and cost of future care. Non-pecuniary damages provide
compensation for pain and suffering, loss of enjoyment of life, and loss of
life expectancy.

18. When is overlapping liability in tort and contract common?

Such liability is common when a professional gives negligent advice to her

client since this is both a breach of contract and a tort.

Chapter 10 “Questions for Critical Thinking” Solution

2. Punitive damages are somewhat controversial even in jurisdictions where

they are relatively common. At the same time, there are circumstances in
which a person’s tortious actions have been particularly callous and
calculating, yet the actual loss suffered by the plaintiff is not extensive in
monetary terms. In these latter cases, what are the compelling reasons for
allowing the plaintiff additional compensation over and above her actual
loss? Should the compensation principle of tort law be compromised in
this way?

Given that the Canadian approach to punitive damages has been

reasonably measured and moderate, there is a strong argument that any
compromise of the tort principle of compensation has been small. It is also
important that the Canadian judiciary retain some way of correcting and
punishing the particularly egregious defendant whose conduct has perhaps
fallen short of a crime but is still tremendously objectionable.

In defence of punitive damages in a civil context, the class might be

interested in learning that the Supreme Court of Canada in the 2002 Whiten
decision focused on the importance of proportionality and expressly
directed lower courts to consider the defendant’s blameworthiness in
relation to specific factors. The court is intent on restraining the size of
punitive awards though, in Whiten, a record $1 million in punitives was
affirmed. The following table outlines factors to consider. It draws heavily
on the exact words used by the court.

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Proportionality: Setting the quantum

1. The proper award must be proportionate to the blameworthiness

of the defendant’s conduct. In assessing blameworthiness,
determine, inter alia,
• Whether the defendant’s conduct was planned and deliberate

• The defendant’s intent and motive

• Whether the defendant persisted in the outrageous conduct

over an extended period

• Whether the defendant conceded or attempted to cover up its

misconduct

• Whether the defendant was aware that what he or she was

doing was wrong

• Whether the defendant profited from its misconduct

• The interest violated by the misconduct was known to be

deeply personal to the plaintiff (e.g., professional reputation as

in Hill).

2. The proper award must be proportionate to the level of the

plaintiff’s vulnerability, including financial or other vulnerability.

3. The proper award must be proportionate to the harm or potential

harm directed specifically at the plaintiff.

4. The proper award must be proportionate to the need for

deterrence.

5. The proper award must be proportionate, even after taking into

account the other penalties—both civil and criminal—that have

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been or are likely to be inflicted on the defendant for the same

misconduct.

6. The proper award must be proportionate to the advantage

wrongfully gained by the defendant from the misconduct.

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Module 3: Torts
Activity 2: Reading—The Tort of Negligence
Chapter 11 “Questions for Review” Solutions

1. What competing interests must a court balance in deciding a negligence

action?

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 five elements in a negligence action?

1: Does the defendant owe the plaintiff a duty of care?

2: Did the defendant breach the standard of care?

3: Did the Plaintiff Sustain damage?

4: Did the defendant’s careless act (or omission) cause the plaintiff’s
damage?

5: Was the damage suffered by the plaintiff too remote?

4. How does the foreseeability test help in defining the neighbour principle
in negligence?

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?

“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?

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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.

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.

9. What does contributory negligence mean and what are the consequences
of it being found to exist?

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.

16. Is the commercial host liable if one of its patrons is injured because of the
patron’s own impaired driving? Explain.

Yes. The court in McIntrye v Grigg (page 275 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.

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Module 3: Torts
Activity 5: Reading—Other Torts
Chapter 12 “Questions for Review” Solutions

3. What are the four different classes of visitors in the law of occupiers’
liability?

The classes are trespasser, licensee, invitee, and contractual entrant.

6. What is a nuisance in tort law?

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.

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?

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

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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.

13. What is “passing off” and what practices was this tort created to prevent?

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.

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

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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 298 of the textbook.

15. What is defamation, and what are the defences to this tort?

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 298 of the textbook. Defences include qualified privilege, absolute
privilege, and fair comment.

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