Thursday February 13
Duty (con’t…) and Standard of Care
Pure Economic Loss
• Losses that do not flow from damage to your person or property
• There is no duty to not cause people economic losses
• Case: Canadian National Railway v. Norsk Pacific Steamship (SCC 1992)
o The defendant crashed a tugboat into a bridge, which fell over. The bridge
was owned by the Canadian government. The Canadian National Railway
has to divert its trains around the bridge and suffer millions of dollars in
losses. They sue the tugboat owner, but the SCC said that they didn’t
owe a duty to people who used the bridge (only the owner). Although it is
foreseeable that it may cause an economic loss and there is proximity, it
failed on policy: there is indeterminate liability.
• Indeterminate Liability
o If there was no limit, someone could be liable to many different people for
an indeterminate amount of time.
• Exception: If the parties are in a special relationship (when someone assumes a
responsibility and someone else relies on that assumption of responsibility)
o Case: Hedley Byrne & Co Ltd v. Heller
Example 1: You go to an investment advisor who advises you to
invest in a specific stock. It turns out to be a hedge fund, and you
lose all of your money. You sue for the money you lost. The court
said that you could win because there was a special relationship.
Example 2: Someone tells you that their investment advisor told
them to put your money in a certain stock, and you do as a result.
Can you sue the investment advisor? No, because he didn’t owe
you a duty, only to the person he directly advised.
Standard of Care
• You have to prove that someone wasn’t careful after you prove that they have a
duty of care
• Reasonable Person – you have to prove they did something a reasonable
person wouldn’t have done in the circumstances
o Who is the “reasonable person”?
Arland v. Taylor – he is not extraordinary, superhuman, a genius…
he is a person of normal intelligence who makes prudence a guide
to his conduct
It is the person you would go to for advice in your life
• Factors to consider:
o Foreseeability of harm
Is any harm to anyone foreseeable? Case: Fardon v. Harcourt
• Someone left their Chihuahua in their car on a warm day.
The Chihuahua tried to get out, flew out the windshield, and
glass flew into someone’s eye. The court said there was no
foreseeable harm to anyone with leaving the dog in the car.
o The probable severity of the harm
A reasonable person does not create substantial risk of injury to
o Social Utility
How useful are the activities you are engaging in?
A reasonable person doesn’t engage in useless activities/activities
o Costs of risk avoidance
How much it would cost the reasonable person to avoid the risk
What is everyone else doing in those circumstances?
Custom isn’t determinative, but it is helpful for the courts
• Vaughan v. Menlove
o Menlove was a farmer, and he dried out the hay in his fields differently
from everyone else (who were concerned). He piled the hay in a way that
it caught on fire and burned down Vaughan’s barn. Menlove argued that
he was a simple farmer and didn’t know any better, but the court said that
they held him to the standard of a reasonable person. The test is
objective – it asks what a reasonable person would do, not what you
• Buckley v. Smith Transport Ltd
o Buckley was a transport truck driver who had syphilis, which caused him
to have delusions. He thought that aliens were controlling him and he had
no control over which way he would turn. He ended up crashing into a
streetcar and killed three people after the aliens told him to turn a specific
way. Did he breach the standard of care?
o The court said that in order to breach the standard of care, you have to be
acting as a human being. Buckley thought he was being controlled by
someone else, and wasn’t directing his own actions.
• Stokes v. Carson
o Carson was sleeping in the back of a car, had a fit, kicked the driver’s
seat, and the driver crashed the car, killing some people. Was Carson
o The court said no, because you can’t breach the standard of care when
• Roberts v. Ramsbottom
o The defendant was driving and had a stroke, crashing into a light pole. He
kept driving, suffered another stroke, and injured someone. Did he breach
the standard of care? o The court said he breached the standard of care because he wasn’t
unconscious – he had imperfect control, and was therefore held to the
standard of a reasonable person.
o The judge wasn’t saying Ramsbottom was at fault, but that doesn’t mean
he’s not legally liable.
• Case: Bolton v. Stone
o The defendant was playing baseball on a small diamond with a high home
run fence, and the defendant hits a home run. An old lady was walking on
a dirt path behind the baseball diamond, and the ball hits her, injuring her.
She sues the baseball player, saying it was negligent to be playing
baseball knowing he could hit a home run (there were also only 3 home
runs hit on that baseball diamond all season). Did the baseball player
breach the standard of care?
o The court said that given it wasn’t a very busy street and there were only 3
home runs hit all season, it was a reasonable risk to make.
o Black Letter Law: In order to breach the standard of care, someone has
to breach a foreseeable risk.
The reasonable person takes greater care where there is a strong
likelihood of damage and the severity of threatened harm is great.
The reasonable person takes lesser care when the chance of
damage is minimal and the severity of the threatened harm is slight.
Cost of Precautions
• Case: The Wagon Mound (No.2)
o A ship comes into the harbour that needs oil to burn in its furnace. The
engineer doesn’t screw the caps on well enough, and oil drips into the
harbour. Someone tells the engineer that they should probably re-fit the
fitting, but the engineer says there isn’t any time, and they leave.
Someone was welding near the harbour, and it erupts into flames. Was
the chief engineer negligent?
o The engineer argued that while some risk was foreseeable, it is hard to
light oil on fire in the water (there isn’t a very big risk).
o The court said that the engineer was liable because even though the risk
was small, the cost of getting rid of the risk was very small. A reasonable
person wouldn’t disregard even a small risk if they could do it with
little difficulty, disadvantage, or expense.
• But… Law Estate v. Simice
o If it comes to a choice between a physician’s responsibility to his or her
patient and their responsibility to the medicare system, the patient must
o The cost of precautions will make you liable if they’re small, but they won’t
get you out of liability if they’re large
Utility • How useful is it what the defendant was trying to do?
• Case: Watt v. Herfordshire
o There was a car accident, and the fire station had two trucks. The big
truck was gone, and they needed the jaws of life. They put it on the back
of the small truck, but didn’t have any way to tie it down. They were going
around a corner, someone jumped in front, they slammed on the breaks,
and one of the firefighters was crushed by the jaws of life. Was the fire
chief negligent for ordering them to take the jaws of life on the truck when
they weren’t secure?
o The court said he wasn’t negligent because they were trying to save lives
and were doing the best they could.
o Black Letter Law: The utility of