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CHAPTER 1. THE LAW AND THE LEGAL SYSTEM Chapter Topics Learning the Law The Legal Environment of Business The Nature of Law Rights versus Privileges The Role of Law The Early Development of Law The Rise of the Courts and the Common Law The Sources and Components of Modern Canadian Law The Constitutional Foundations of Canadian Law The Canadian Charter of Rights and Freedoms Classification of Laws Summary Key Terms Review Questions Mini-Case Problems Case Problems for Discussion

Chapter Objectives The rights and obligations of businesses and business persons stem from the law and our legal system. After study of this chapter, students should be able to: • Describe the sources, role and development of Canadian law. • Distinguish between statute and Common Law, and describe the significance of stare decisis. • Recognize matters of federal versus provincial jurisdiction. • Describe the fundamental rights and freedoms set out in the Charter of Rights and Freedoms.

CHAPTER COMMENTARY Chapter 1 is introductory in nature, and provides a general background concerning the nature of law, how laws developed, the general need for some rules to govern the behaviour of individuals, and the establishment of the various fundamental rights and duties of persons in society. In class discussion, special emphasis should be placed upon both the sources of law and the classification of laws in order that students may have a clear idea of what they are and where they may be found. Many students fail to realize that the Common Law represents a large body of law, and the scope and application of this source of law should be emphasized in class discussion of the chapter. The text description of the development of the law and the rise of the courts is intended to be read as a historical introduction to give students an appreciation of where our laws came from, and how they were developed. In the context of the courts and the law, the doctrine of stare decisis should be noted, and its purpose and application discussed with emphasis on the need for "predictability" in the application of the law to cases that come before the courts. It would be worthwhile to note as well that some judges of the Supreme Court of Canada have expressed the view that they, as judges of the highest court in the land, do not consider Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-2

themselves bound by the doctrine, but would only change a common law rule where it had become inappropriate in a modern social setting. Chapter 1 also provides a general outline of the nature of a constitution and its function in a democratic society. Reference is made to the "constitution" of the United Kingdom and the constitution of the United States as a basis for discussion of, and comparison with, the Canadian Constitution. The role of the courts as the chief interpreter of the constitution is also noted and should be emphasized in any class discussion of the enforcement of rights under the Charter. On this point, the doctrine of judicial review should be explained to illustrate how the rights of both governments and individuals set out in the constitution may be enforced. As an approach to teaching this part of the chapter, a systematic examination of the fundamental rights and freedoms may be made with the class requested to provide a fact situation related to a freedom or right, and then have the class speculate as to how the Charter might be interpreted by the court as it relates to the matter. With each fundamental right or freedom it is important to emphasize that the freedom or right must be viewed in the light of s.1 which makes the right "subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society," and not absolute. The "notwithstanding" clause (s. 33) which permits legislatures or parliament to override the Charter rights should be noted as well. On this point, reference may be made to the Court Decision in the Chapter (Ford v. Quebec (Attorney General), 1988 CanLII 19 (SCC)) which held Quebec's Bill 101 unconstitutional with respect to public signs. Students should note that the province of Quebec used s. 33 to override this decision of the Supreme Court of Canada and passed Bill 178 to require "French only" signs on all Quebec businesses. Students should also examine RJR-MacDonald Inc. and Imperial Tobacco Ltd. v. Canada, 1995 CanLII 64 (SCC) in the Chapter for an additional example of the views of the Supreme Court on the Government of Canada's attempts to virtually ban advertising on tobacco products. The organization of the Charter itself provides an orderly approach to discussion of the nature of the rights and freedoms granted under it, as well as the method of enforcement. With respect to the latter, it is readily apparent that most of the rights and freedoms are those which the framers of the constitution felt should be enshrined to protect them from encroachment or interference by governments. If government should do so, the individual has the right to bring the alleged infringement before the courts to have the interference ruled upon as to its validity. A final point to note and to emphasize in class is that the constitution includes more than the Charter of Rights and Freedoms. It also includes the original British North America Act of 1867 (as amended over the years) which establishes the structure of our government, and the legislative powers and jurisdiction of the provincial governments and Parliament. Consequently, it is a lengthy and complex document which sets out not only the rights and freedoms of the individual, but how Canada as a democratic society governs itself. On this point it should be emphasized that legislative bodies may not exceed the powers granted to them under the constitution, as the exercise of jurisdiction when none exists renders such an act ultra vires and a nullity.

Aboriginal and indigenous law concepts are introduced, and statute law is defined in the text, and the process associated with this type of law-making is described very briefly. Students should be informed that this process is legislative as distinct from judicial. The recording and organization of these statutes in the form of revised statutes of a province (or federal government) should also be discussed in order that students are made aware of where these laws may be found. Discussion may then lead into the topic of civil codes, and students may be asked to discuss the pros and cons of a Civil Code system vs. the Common Law/Equity system

From the point of view of learning about the law, the chapter contains a description of the various sources of the law, and the methods of classification. The importance of this part of the chapter should be underscored, as it provides the basis for an understanding of the particular rules and principles covered in the remainder of the text. It also represents an important first step in the examination of the law, in that it sets out the system for classification. It is essential that the difference between substantive law and procedural law be understood. As well, students should learn the various sub-classes of substantive law. In this regard, the nature of public law as a type of substantive law should be clearly understood. Public laws are laws which relate to the relationship between the individual and the government (or its agencies), and as such, are usually laws which are enforced by the Crown. They are generally prohibitive or regulatory in nature (e.g.: the criminal law, or provincial liquor control laws), and are enforced by the Crown if they are violated by an individual. They are quite different from private laws which normally establish the rights and duties of individuals in their dealings with each other, and which must be enforced by the party whose rights have been violated. The chapter outlines the sources of law, and provides a general explanation of the common law (including equity) as a source. The nature of this body of law should also be carefully examined, as the law described in a large part of the text is of this type. In particular, the Law of Tort in Chapters 4 - 6, the Law of Contract in Chapters 7 - 14, the Law of Agency in Chapter 15, the Law of Bailment in Chapter 20, and a number of other areas of the law are essentially part of the "Common Law". Chapter 1 also introduces the first of many legal terms and definitions which must not only be memorized, but understood. The various definitions of the term "law" along with definitions of "rights" and "privileges", "Common Law", "equity", the doctrine of stare decisis, "statute", and "civil code" are explained, and the material concerning these terms should be carefully reviewed, as the terms are frequently used throughout the balance of the text. The various terms used to describe the different classifications of the law should also be noted. The Review Questions at the end of the chapter should provide a sufficient test of student knowledge of the essential material and are reproduced with comments.

Review Questions 1. What impact does the Canadian Charter of Rights and Freedoms have on rights and freedoms not mentioned specifically in the Charter? Could these "other rights and freedoms" be curtailed or extinguished by governments? Answer: The Charter recognizes the existence of other rights and permits them to continue except where they conflict with Charter rights and freedoms. Rights outside the Charter do not have Charter protection, and may be abolished or encroached upon by governments.

2. What is the difference between a "right" and a "privilege"? Answer: A right is an act that may be done with impunity and with the support and recognition of the state. The state recognizes a right as something which neither it nor others may deny. A privilege is something which the state allows or permits under specific circumstances at the pleasure of the state.

3. Why are "rights" and "duties" often considered together when one thinks of laws? Answer: Because "rights" often permit a person to do something that interferes with others, laws generally include obligations or duties on the person possessing a right to exercise the right in a particular way to minimize interference with others. Laws may also include duties on those affected by the exercise of a right to permit the right to be exercised.

4. Could a society exist without laws? If not, why not? Answer: A complex society certainly could not exist without laws, as some means of regulating the activities of people would be necessary to maintain order. Even in a primitive society, rules regulating fairness in vengeance matters were necessary.

5. "Advanced civilizations are generally characterized by having a great many laws or statutes to control the activities of the citizenry." Comment on the validity of this statement. Answer: This is a valid observation. Advanced civilizations are characterized by persons engaged in activities which involve a great deal of social contact and interaction. Historically, they have also involved many people living in close proximity to each other (in cities). Each type of social interaction usually requires some legislative control, hence, the more interaction, the more laws that are required.

6. On what basis are Charter fundamental rights and freedoms open to restriction by Parliament or the provincial legislatures? Answer: Fundamental rights and freedoms may be restricted under s. 1 if the restriction can be shown to "be demonstrably justified in a free and democratic society." Rights and freedoms may be "temporarily" overridden by the "notwithstanding" clause (s. 33) as well.

7. Why is the doctrine of stare decisis an important part of the Common Law system? Answer: The doctrine of stare decisis is the theory of precedent. Judges are expected to apply previous decisions to similar cases which come before them in order to maintain a degree of consistency in the law. By following this doctrine, the law is not only consistent, but others can predict how the law may be applied in similar.

8. How does the Common Law differ from the principles of equity? From statute law? Answer: Common Law and equity have different roots. The common law was the product of the common law courts. The principles of equity were originally principles or rules which the King applied in settling disputes which did not fall within the jurisdiction of the common law courts. Later, the King's Court (Chancery) used the same and other principles in order to provide fair and just results. At present, the courts may apply both common law and equity, but where conflict exists, equity prevails. Equity

differs from statute law in the sense that statute laws are written or codified laws, whereas the principles of equity are found in the recorded judgments of the courts.

9. How does a legislature establish a new law? Explain the procedure. Answer: The usual process is as follows: a. A bill (essentially a proposed law) is presented to a legislative body (Parliament or provincial legislature). b. A motion is made (and passed) to have the bill 'read' a first time. c. The bill is then printed and circulated to the members to study. d. The bill is later brought forward for debate (second reading) in principle. e. If the bill passes the second reading stage, it is sent to a Committee for study and amendment on a clause by clause basis. f.

Once passed by the Committee, the bill is reported in final form by the Chair of the Committee for a third reading.

g. The bill is then debated for a final time by way of a motion to have the bill read a third time. h. If passed by a majority vote, the bill at the federal level goes to the Senate where a similar process is followed. i.

Once a bill has been passed by the House of Commons and Senate (or a provincial legislature) it goes to the Governor-General (or Lieutenant-Governor, if provincial) for royal assent.

The bill becomes a law on receipt of royal assent, and effective as a law when proclaimed in force.

10. Define substantive law, and explain how it differs from procedural law. Answer: Substantive law - law which sets out the rights and duties of individuals and corporations. Procedural law - law which set out the procedure whereby substantive laws are enforced.

11. Describe the difference between the Common Law and the Civil Code of the Province of Quebec. What are the relative merits of each system? Answer: Common Law consists of the recorded judgment of the courts. The civil code is a written body of law. Merits of civil code: laws are written down and may be consulted to determine what the law is. The law can be changed by statute amendment and kept up to date by the legislature if change is

warranted. Merits of Common Law: flexible, as judges may change it through interpretation, or by distinguishing the case at hand from the precedent. Adaptable to changing social attitudes.

12. "The supremacy of the state was reached when it managed to exercise a sufficient degree of control over the individual to compel him or her to use the state judicial system rather than vengeance to settle differences with others." Why was it necessary for the state to require this of the individual? Answer: When the state lacked the power to control its citizens, individuals used their own means to resolve disputes, as it was the only method whereby a person could obtain redress. Vengeance, however, often disrupted the entire community, and affected others not involved in the dispute. Once the state had the power to compel citizens to obey its decrees, it could substitute orderly procedures for settlement which caused less disruption to the community than vengeance.

13. How does a "regulation" made under a statute differ from other "laws"? Answer: A regulation under a statute is a rule that is made to enable an administrative tribunal to carry out duties assigned to it under a statute. Regulations govern the activities of administrative agencies or boards, and are often administered by them. Regulations are subordinate to statutes, but in application, have much the same effect on persons who engage in activities subject to the regulations.

14. Explain how the enforcement of a public law differs from the enforcement of rights under private law. Answer: Public laws are enforced by the Crown against the individual. Private law rights are enforced by individuals against other individuals.

15. The Canadian Charter of Rights and Freedoms has been described as being "supreme" law, or law which is "entrenched." Why, or in what sense is this the case? Answer: The Charter is "supreme law" in the sense that it overrides all other federal and provincial laws, and all such laws must not conflict with it, except as permitted. It is "entrenched" in the sense that it is difficult to change.

16. Explain the Common Law system, and how it relates to the function of the courts. Answer: The Common Law system is a system where the laws are not codified, but may be found in the recorded judgments of the courts. Courts maintain a degree of consistency in the law by following the doctrine of stare decisis (precedent).

17. Does the Canadian Charter of Rights and Freedoms permit the Supreme Court of Canada to override the will of Parliament or a provincial legislature? If so, in what way?

Answer: The Supreme Court of Canada, as chief interpreter of the legislation, may override the will of Parliament or a provincial legislature where the law violates the Charter. It may not override if the law is passed pursuant to the s. 33 "notwithstanding" clause.

18. If changing social attitudes or values dictate a change in the Canadian Charter of Rights and Freedoms, how would this be accomplished? Answer: The Charter of Rights and Freedoms may only be changed by agreement of Parliament and 2/3rds of the provinces, provided that the provinces represent at least 50% of the population of all of the provinces.

19. Why is the word "law" so difficult to define in a precise manner? Answer: Law is difficult to define because in practice it is applied indiscriminately to rights, privileges, rules, principles, and statements.

20. In what way does the Constitution Act, 1982 affect the legislative jurisdiction of the Parliament of Canada and the provincial legislatures? How are questions of jurisdiction decided? Answer: The Constitution Act, 1982 includes the British North America Act, 1867, as amended, which sets out the legislative powers of the provinces and the Parliament of Canada. If legislation passed by either a province or the federal government is alleged to have exceeded the legislative authority granted to it under the Constitution, the Supreme Court of Canada has the power to decide if the body has the authority to pass such legislation, and would decide if the law was ultra vires.

Mini-Case Problems 1. A freight train derailed, dumping dangerous chemicals into a small stream in British Columbia, causing significant environmental damage. What jurisdictional issues are raised by this scenario? Answer: The jurisdiction of the province to regulate environmental matters may collide with the federal government in regulation of railways (transportation).

jurisdiction of the

2. A coastal province passed a law prohibiting boats and ships from dumping waste along its shoreline. A ship‘s captain was later charged with commission of such an offence. What defence may exist to such a charge? Answer: The defence may be that the provincial law is ultra vires (beyond its jurisdiction), as shipping is a matter of federal jurisdiction.

regulation of

3. Simone believes that genetically-modified foods are extremely dangerous for people to consume. What paths can she take in fighting (legally) for her belief? Which one would be the most efficient? Why? Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-8

Answer: While it may be possible for Simone to sue manufacturers of genetically-modified foods for producing ―something dangerous‖ or seek injunctions against the sale of these goods (details in later chapters), it would be far more efficient for her to champion a legislative response, to see genetically modified foods regulated by government.

Case Problems for Discussion Case 1 Mary applied for a job at the Millstone Restaurant. She was told her uniform would be a white blouse and black skirt, with a hem three centimetres above the knee. She agreed, but when she started work, she realized that female staff was dressed accordingly, but the men wore white shirts and black pants. At a later date, Mary appeared at work also dressed in a white shirt and black pants. The manager of the restaurant told her she was ―out of uniform,‖ words were exchanged, and Mary was fired. Is there a Charter issue here? Discuss. Answer: While a differential in dress requirements may or may not be an example of unreasonableness, unequal treatment, discrimination, or harassment, the Charter addresses the individual and his or her treatment at the hands of government, not matters between private individuals. Mary will have to look toward aspects of common law (later chapters) or provincial labour or human rights legislation.

Case 2 FM 96 Tiger Radio wanted to set up a three-day live remote event in a provincial park for the Labour Day weekend. The provincial parks commission approved the plan, subject to a payment of $4,100, comprised of a park event permit ($1,000), a sanitation charge ($1,000), a broadcasting permit ($500), a beer/wine premises special occasion permit ($1,500), and a fire inspection fee for the beer/wine consumption premises ($100). How should FM 96 respond to the provincial commission? Answer: By requiring an application fee or fee for service, and issuing a permit to allow a particular activity, the provincial authority is setting conditions or ―regulating‖ that behavior. All of the activities in the park that are listed are matters that a province can regulate, except broadcasting. The regulation of broadcasting is a federal matter, and ultra vires of provincial jurisdiction. The province has no right to demand this payment, and its ―permit‖ is meaningless. Case 3 In the year 1619, Maxwell was drunk, lost control of his horse and killed a child. No legal action was taken by the Crown. In the year 1859, Edward purposely drove his master‘s wagon over a man in the Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-9

street. He was executed for his crime. In the year 1959, Sharon was sober, lost control of her car and killed a child. She was given a suspended sentence and ordered to pay a $100 fine, and was sued by the child‘s parents for damages of $1000 in funeral costs. In the year 2019, Karl was drunk, lost control of his car and killed a child. He was given one year imprisonment, a $1000 fine, a lifetime driver‘s licence suspension and was sued for $2.5 million for emotional distress by the parents of the child. In what way is the principle of stare decisis at work here, if at all? Answer: The principle of stare decisis is at work, despite the fact that the penalty has evolved over time. Recalling that one of the strengths of the principle is that it can respond to the norms of a changing society, the fact remains that causing death is wrong, and will attract a socially appropriate penalty. Each epoch of our society has had different conceptions of capacity, incapacity, and degrees of responsibility and liability in the operation of a mode of transport.

CHAPTER 2. THE JUDICIAL SYSTEM AND ALTERNATIVE DISPUTE RESOLUTION Chapter Topics Introduction Development of the Law Courts The Structure of the Judicial System The Judicial System in Action Administrative Tribunals Alternative Dispute Resolution (ADR) The Legal Profession The Role of the Legal Profession Summary Key Terms Review Questions Mini-Case Problems Chapter Objectives Knowing where and how to enforce rights and obligations is a key business survival skill. After study of this chapter, students should be able to: • Describe the development, content and structure of the judicial system. • Explain the sequence of steps in court procedure, particularly civil court procedure. • Identify how and why alternative dispute resolution may be the best option for the settlement of business disputes. • Explain the role of barristers and solicitors, the range of services provided by the legal profession, and the concept and limitations of court costs.

CHAPTER COMMENTARY Chapter 2 represents a continuation of the material contained in the previous chapter, but focuses upon the administration of the law. The text material includes the structure of the courts in Canada, and as a class exercise, it might be useful to carry simple criminal and civil actions (based upon easily understood incidents) through the various steps and appeals to their final resolution at the highest appeal levels. In this fashion, the text material may be re-enforced, and the various limitations on appeal, etc., noted in the process. The distinction between criminal and civil proceedings should be emphasized, as experience has indicated that students frequently fail to realize that an incident which gives rise to both civil and criminal proceedings (such as a "criminal negligence" incident) would follow two separate legal paths, one dealing with the criminal act, and the second, dealing with the civil aspect. Some time should be given to the procedure by which judgments of lower courts may be appealed. The conditions under which a judgment may be appealed should be stressed (error of law, rejection of important evidence in reaching a decision, etc.) and the appeal routes examined for both civil and criminal cases. These are depicted on the charts which follow.

Since alternate dispute resolution (ADR) is considered by many business firms as a more efficient system of resolving disputes, the topic should be opened for class discussion as an alternative to the court system. Discussion should note the particular advantages of ADR over the court system (speed of resolution, lower costs, etc.) but it should also be noted that certain kinds of disputes still lend themselves to court resolution.

Review Questions 1. Why is arbitration sometimes a more attractive means of settling contract disputes between business persons? Answer: Arbitration is a confidential process as well as a relatively low cost and efficient process for resolving disputes. Often business people do not wish to destroy a business relationship if a dispute arises, and arbitration will often allow them to obtain an answer or solution to their problem that will allow them to continue to do business with each other.

2. Discuss the importance of an independent judiciary. Answer: Important because: (a)

not open to manipulation by political action.

(b)

free to resolve differences between individuals without fear of the consequences.

(c)

able to determine differences between governments without concern that the powers of the court will be attacked.

(d)

permanent body to administer the law is vital in order to maintain continuity and confidence in the system.

(e)

"independence" generally equated to "fairness".

3. If a provincial government should pass a law which prohibits any person from expressing any criticism of any elected government official on penalty of imprisonment, how might the law itself be challenged? Answer: A person accused may ask the court to review the law in the light of the Charter of Rights and Freedoms or the jurisdiction of the province to make such a law. The court will then determine if the law is enforceable.

4. Explain the differences between a Small Claims Court and a Magistrate's Court. Answer: A Small Claims Court deals with civil disputes between individuals where the monetary amount is small (limit varies from province to province, $3,000 - $10,000, and in some, up to $25,000). Magistrate's Court is a court which enforces by-laws, provincial statutes and the Criminal Code (except for the more serious offences). It does not deal with civil disputes.

5. On what basis is it possible to justify the right of the court to declare unconstitutional legislation enacted by a legislature? Answer: The right may be justified because the court represents an independent, permanent body that is made up of persons with the expertise to interpret the constitution and to oversee its application. No political body is able to do so in an unbiased or fair manner. 6. How does a criminal case differ from a civil action? Answer: Criminal: -

Crown brings the charge against the accused. A two-step process in many cases: (1) preliminary hearing, (2) full hearing.

Crown obliged to prove the particular offence was committed by the accused, and that the offence is one which is set out in the criminal code.

Crown must prove act, identity, and intent to commit the offence (subject to certain exceptions).

must prove its case beyond any reasonable doubt in order to obtain a conviction.

Civil: -

the party who alleges a violation of his or her rights brings the action.

onus of proof of facts alleged rests on the plaintiff.

case is outlined through "pleadings".

plaintiff not subject to the higher standard of proof of criminal courts.

7. In criminal proceedings, what obligation rests on the Crown in order to obtain a conviction? Answer: Crown must normally prove beyond any reasonable doubt that the accused committed the particular offence, intended to commit it, and was the person who committed it.

8. What is the purpose of "pleadings" in a civil case? Answer: The purpose of pleadings in a civil action is to set out the facts of the case and the issues in dispute in sufficient detail to enable each party to know the matters in dispute and prepare their respective cases for the trial. They avoid surprise at trial, and minimize the time required by the courts to dispose of the case.

9. How does "direct" evidence differ from "opinion" evidence? How do these types of evidence differ from "hearsay" evidence? Answer: "Direct" evidence is given by ordinary witnesses who testify as to what they heard, saw, or did. "Opinion" evidence is evidence given by experts who have special knowledge about the subject matter of the evidence, and who express an opinion about the matter based upon their specialized knowledge or expertise. Hearsay evidence is neither direct nor expert evidence, but evidence given by a third party who was informed by someone else (usually a person who would normally be an ordinary witness) of the facts. Hearsay evidence is usually not admissible in a court of law.

10. Describe the role performed by legal counsel in the administration of justice. Answer: Legal Counsel are learned in the law and advise others of their legal rights and duties. They also carry out on behalf of their clients the job of processing an action through the courts or negotiating legal matters on their behalf.

11. Distinguish between a "barrister" and a "solicitor". Answer: A barrister is a lawyer who handles litigation matters on behalf of clients. A ―court-room‖ lawyer. A solicitor advises clients of their legal rights and duties, and normally prepares contracts, deeds, wills, and other legal documents for clients.

12. On what basis might an appeal be allowed from a judgment of a court of original jurisdiction? Answer: An appeal may be allowed where the judge improperly applied the law, (improperly instructed the jury as to the law) or made an error in rendering a decision.

13. Where a judgment is reviewed by a Court of Appeal, what type of decision might the court make? Answer: A Court of Appeal may: (1) reverse the decision, if the trial judge erred. (2) affirm the decision of the trial judge, or (3) send the matter back to the lower court for a new trial.

14. What is a court of original jurisdiction? How does it differ from a court of appeal?

Answer: A court of original jurisdiction (sometimes referred to a court of first instance) is a court where a case is heard for the first time. A court of appeal is a court which reviews the decision of the court of original jurisdiction to make certain that the judgment was fairly and properly made.

15. How does arbitration differ from a court action? Answer: Arbitration is conducted much like a court action, but in a much less formal setting. While the rules of evidence and procedure are usually followed, the process generally does not require pleadings or discovery. The parties are usually responsible for the selection of the arbitrator, and the arbitrator‘s fees. The hearing does not involve ‗court costs‘.

16. Explain the nature of mediation, and how it is used in the resolution of disputes. Answer: Mediation is an attempt to resolve a dispute between parties prior to formal court or arbitration proceedings by a third party through a discussion process. A mediator has no authority to impose a dispute by suggesting ways in which the parties may reach agreement on a solution to their problem.

17. "In a free and democratic society, the courts perform the important role of guardians of the rights and freedoms of the individual. While important, this is far from being the only part they play in society." How do the courts perform this important role? What other functions do they have in society? Answer: Courts guard the rights and freedoms of the individual by acting as the medium through which rights and duties are determined and enforced. They also act as a "check" on government action which might improperly encroach on the rights and freedoms of individuals protected by the Charter. Finally, they preserve peace and order by providing an obligatory process for dispute resolution (replacing vengeance).

Mini-Case Problems 1. Michael, an otherwise well-behaved boy of 11, fell in with Gavin, 13, a repeat offender as a delinquent. The boys were arrested by police while spray painting a school and breaking into a portable outside classroom. Under the provisions of the Youth Criminal Justice Act, there was no public disclosure of their names, and the Youth Court proceedings were sealed from public scrutiny now and future. Are the provisions of the law appropriate for both boys? Whether yes or no, explain why. Answer: The fact situation calls for a reasoned opinion, rather than a yes or no answer. In most instances students will provide an answer that in some measure provides a reflection of their personal values, as well as their perception of the criminal justice system.

2. Anne is unsuccessful in her suit at trial and on appeal to the provincial appeal court. If she wishes to proceed, where must she go, and what burden will she face before her case will be heard again? What factors may prevent her case from being heard again? Answer: The only remaining route of appeal for Anne is to the Supreme Court of Canada, however this appeal is not a matter of right. She faces the burden of being successful in seeking ―leave to appeal‖ before she can have her case presented. The Supreme Court of Canada could give leave to hear any case it wishes, however it is doubtful that it will do so unless it is in the public interest, and/or commonly, any of the following: errors at appeal are evident such that a denial of fundamental justice would otherwise take place, a significant Charter or other constitutional determination is at stake, or the lower ruling employs outdated Common Law in need of reform.

3. Carlson invented a new valve for natural gas pipelines, and sold his drawings to Pipeco, a manufacturer of such items. A dispute arose before production began, and both parties immediately agreed to ADR. What would lie behind this mutual aversion to court proceedings? Answer: The most likely reasons behind the selection of ADR in this case are (in order of importance): (a) Secrecy – the invention is new, which may have great value from a competitive standpoint. (b) Speed – production is likely set up already and any delay is expensive. (c) Cost – a cheaper proceeding producing a better result is in the interest of both parties.

Case Problems for Discussion Case 1 A backhoe owned by Digger Ltd. was involved in the trenching for a water pipeline located along a city sidewalk. In moving a bucketful of rock into a waiting truck, the backhoe operator accidentally struck and cut an overhead power line. The cut power line fell to the sidewalk, injuring and electrocuting a pedestrian who had been observing the trenching. The pedestrian required extensive hospitalization and reconstructive surgery, and later commenced legal proceedings against Digger for the injuries suffered, including six month‘s lost wages while hospitalized. Outline the various steps the parties to the action would take to bring the case to trial, and briefly describe the trial process. Answer: The case is quite straightforward, and students should not be thrown off by the causal chain of backhoe, power line and passer-by. Although students have not yet been exposed to the principles of negligence law, most will recognize the duty, breach, damage elements of this incident and as something more than a simple and blameless accident. As to the substance of the question, the stages by which the case will be Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-16

brought to trial, and the trial process itself, are described the sections entitled ―Civil Courts‖ and ―Civil Court Procedure‖. Case 2 As the Head of Information Systems at Equity Brokerage, you maintain the computer systems which support all aspects of stock trading accounts at Equity, including access for trading purposes. Your firm is being sued by a customer who alleges trading irregularities occurred on her account. When you testify at trial as to the identity of the person who conducted the transactions and the actions that affected the status of the account, what kind of witness are you, and what kind of evidence are you providing?

Answer: Despite having some particular expertise, the witness would be considered to be only an ―ordinary witness‖. As an employee of the defendant firm, the witness lacks the independence of opinion that is usually one of the hallmarks of most ―expert witnesses‖. As the witness has direct knowledge of the events (regarding the computer system itself), the witness is giving ―direct‖ evidence rather than ―hearsay‖. Case 3 Farhan is personally injured and his home is badly burned by a toaster oven that, on first use, burst into flame. With Farhan successful in an action for damages, what factors should a judge take into consideration in determining the issue of costs? Answer: The issue of an award of costs is covered in the section entitled ―Court Costs‖. The judge would take into account the behaviour of the parties, especially the defendant, in forcing the case to a judicial hearing. While there may be genuine issues for trial, including the amount of damages claimed, the judge will be concerned as to whether the defendant manufacturer was simply attempting to stall or bankrupt Farhan, thus perverting justice rather than seeking it. Such efforts will be penalized in costs, in addition to disposing the court toward generosity in the award in the first place.

CHAPTER CHARTS

Table 2–1 Trial Level Jurisdiction Alberta British Columbia Manitoba New Brunswick Newfoundland & Labrador Northwest Territories Nova Scotia Nunavut Ontario Prince Edward Island Quebec Saskatchewan Yukon Territory Appeal Level Alberta British Columbia Manitoba

Designation of Court Court of Queen’s Bench of Alberta Supreme Court of British Columbia Court of Queen’s Bench of Manitoba Court of Queen’s Bench of New Brunswick Supreme Court of Newfoundland & Labrador (Trial Division) Supreme Court of the Northwest Territories Supreme Court of Nova Scotia Nunavut Court of Justice Superior Court of Justice Supreme Court of Prince Edward Island Superior Court of Quebec Court of Queen’s Bench for Saskatchewan Supreme Court of Yukon Designation of Court Court of Appeal of Alberta British Columbia Court of Appeal Manitoba Court of Appeal Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-19

New Brunswick Newfoundland & Labrador Northwest Territories Nova Scotia Nunavut Ontario Prince Edward Island Quebec Saskatchewan Yukon Territory

Court of Appeal of New Brunswick Supreme Court of Newfoundland & Labrador (Court of Appeal) Court of Appeal for the Northwest Territories Court of Appeal for Nova Scotia Nunavut Court of Appeal Court of Appeal for Ontario Court of Appeal of Prince Edward Island Court of Appeal of Quebec Court of Appeal for Saskatchewan Court of Appeal of Yukon CHAPTER 3. BUSINESS REGULATION

Chapter Topics Introduction Government Regulation of Business The Hearing Process Broad-Policy Administrative Law The Appeal Process for Administrative Decisions Summary Key Terms Review Questions Mini-Case Problems Chapter Objectives Regulation can have more immediate impact on how we do business than either legislation or case law. After study of this chapter, students should be able to: • Describe the effect of regulation and distinguish it from legislation. • Identify and describe the activities of administrative tribunals. • Recognize matters of federal versus provincial jurisdiction. • Describe the elements of natural justice. YOUR BUSINESS AT RISK Many businesses are tempted to gloss over or ignore seemingly burdensome administrative rules and procedures. However, government regulation and administrative tribunals have more power than most business persons realize. Failing to comply with administrative law provisions can result in immediate and drastic consequences for businesses and their owners.

CHAPTER COMMENTARY Chapter 3 examines the regulatory process that governments use to control business activities. It differs from what students may view as a legal process in the sense that most of the ‗law‘ or the rules are made by bureaucrats and enforced by them. Students should be made aware that administrative agencies and commissions play a significant role in the business scene as they represent the means by which the Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-20

government seeks to protect public health and safety, ensure fair competition in the marketplace, and generally protect the consumer from unfair business practices. The regulation of the professions also ensures that a level of competence is established and maintained through a licensing process. Discussion of administrative agencies or commissions should also emphasize the fact that the usual methods of regulating business and the professions is through a registration or licensing system. The registration or license is the means by which control is maintained, since in most cases the failure of a business or professional person to comply with the rules or requirements set down for the business or profession could mean the loss of the registration or license to carry on the business or practice the profession. Students should also be made aware that the termination of a registration or the lifting of a license to practice a profession or carry on a business must be in accordance with the rules of natural justice, and a hearing process, and perhaps an appeal process must be made available to the affected party to ensure fairness in the decision. Students should also be made aware that administrative tribunals set down rules and procedures to carry out the policy objective of the government, and that these ‗rules‘ are usually set out in regulations made under the particular statute. These regulations have much the same effect as statutes, but are subordinate legislation in the sense that they do not follow the enactment process for ordinary legislation.

Review Questions 1. What are the rules of natural justice, and how do they apply to a board that acts quasi-judicially? Answer: The rules of natural justice require the board or agency to give the affected persons notice of the charges made against them, and to provide them with the opportunity to prepare and present their side of the issue to the decision-makers. This usually takes the form of a hearing where evidence and argument may be presented before the decision-makers.

2. Explain how an administrative law differs from other laws. Answer: An administrative law establishes broad policy objectives then delegates the enforcement to an administrative body to carry out the policy objectives. An ordinary statute will normally state the policy objective(s) and require compliance under penalty for failure to comply. In the case of an ordinary statute, the courts are used to obtain compliance.

3. Explain how governments regulate the professions. What type of body is usually created for this purpose? Answer: Governments usually regulate the professions by establishing a non-government body of the profession to set standards for entry into the profession and the maintenance of the standards by its members. To protect the public, the professional association is usually granted the right to license practitioners of the particular profession and to revoke the license of those that fail to maintain the standards of the profession.

4. What administrative controls are used to control or regulate business activities that offer services to Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-21

the public? Answer: The usual control method is by registration or license to carry on the particular business activity, and to prohibit anyone from conducting the activity unless registered or licensed. 5. Outline the process that an administrative body must follow if it wishes to revoke an individual‘s license? Answer: An administrative body must usually establish a procedure whereby a hearing is held to enable the affected party to appear and to defend against the complaint before a final decision is made. In some cases an appeal may be made to an independent tribunal where a revocation of a license takes place.

6. What is an administrative law? Answer: An administrative law is a law that not only establishes the broad policy objectives of the government but establishes an agency, board, or commission to carry out the policy objectives, and includes the rules or procedures that the agency, board or commission may make to ensure that the policy objectives are met.

7. Under what circumstances may a decision of a board or commission be appealed to the courts? Answer: As a general rule, an appeal may only be made to the courts where the administrative body has acted quasi-judicially, and either failed to follow the rules of natural justice, or made a decision that is patently unreasonable, or where the decision-maker was biased.

Mini-Case Problems

1. Norman seeks a licence to operate a taxi in a major city and applies in writing to the City Taxi Commission. Two days later, he receives a letter in reply: ―Dear Norman: Upon careful review of your application, your request for a licence is denied. Signed: Chair of Taxi Commission." Advise Norman of his rights. Answer: Although it may be difficult, Norman may feel that that the extremely rapid response to his application suggests that it was not reviewed at all, despite the reply stating that a careful review had been performed. While some municipalities may allow an appeal to the municipal council itself, it is likely no appeal route exists, and his only recourse would be an application for judicial review before a court. He would allege that such cursory treatment of his taxi application amounted to a denial of natural justice. 2. Janine is a herbalist, preparing certain natural tonics she believes to be ―beneficial to the human Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-22

spirit.‖ Her activities are located in a province which does not regulate such matters. Carla is similarly occupied, as a registered herbalist, in a province which does regulate the trade. Aside from federal regulation of drugs, in what way would these two persons be differently affected if one of their preparations turns out to have adverse effects? Answer: Janine will be liable to answer to the standard of common law liability only. Carla will have the same responsibility, but other standards to meet as well. At minimum she must meet the standards set by her provincial regulators, as well as those of any professional body in which she is a member. The profession may be self-regulating (presently, herbalist are not), which replaces the provincial regulatory standards.

3. A provincial Liquor Control Agency discovers that a licensee tavern has sold liquor to minors on two occasions and orders suspension of the tavern‘s licence for a period of seven days. A month later, a different tavern is found in violation on essentially identical facts, and the Agency suspends its licence for a period of fourteen days. Is there a ground for appeal of the harsher suspension? Answer: There is probably no ground for appeal of the harsher suspension. The principle of stare decisis does not apply in any strict manner to administrative tribunals, and even so, at issue is the penalty, not whether the violation was committed. Assuming there is no denial of natural justice in the handling of the case at hearing, no real basis for appeal will exist.

Case Problems for Discussion Case 1 A restaurant licensed to sell liquor served several bottles of wine to a couple who had visited the restaurant for dinner. Both of the patrons had after dinner drinks, and when they were ready to leave, the restaurant owner offered to send them home in a taxi, since they were, in his opinion, unfit to drive. The patrons accepted the offer, and took a taxi home. Upon reaching home, they decided to return to the restaurant and pick up their car. They called another taxi and were taken to the restaurant parking lot. They picked up the car, and on their way home, the driver lost control of the car, and crashed through the side of a wood-frame house, killing one occupant and injuring another. Investigating police charged the driver with criminal negligence causing death (among other charges), and the provincial liquor authority revoked the licence of the restaurant. Discuss the issues raised in this case. What recourse might the restaurant have to restore its licence? Answer: The case does not suggest that a hearing preceded the revocation of the restaurant‘s liquor licence. Such an administrative act without a hearing would amount to a denial of natural justice. Had a hearing been held, the restaurant would have shown that the clients had been delivered home by the restaurant, surely answering all of its responsibilities (and more) under the regulations that govern it. The restaurant‘s recourse would be an application to a court for judicial review of the tribunal decision.

Case 2 A radio station employed a program host that repeatedly made disparaging and often sexist remarks about Canadian celebrities to the point where complaints to the Broadcast Regulator resulted in a cancellation of the station‘s license to broadcast. The station objected to the Regulator‘s decision on the basis that it had violated the station‘s right to freedom of speech and expression. Discuss the issues in this case. Would your answer be any different if the station had been located offshore on a ship beyond the 12 mile limit? Using the Internet from an offshore location?

Answer: Students may or may not realize that a licence to broadcast is a privilege, and thus subject to conditions or particular standards of conduct. Breach of those conditions and standards and conditions may result in loss of the licence. Whether students are aware of this or not, students should grasp that Charter rights are subject to limits demonstrably justified in a free and democratic society, and as such, freedom of expression and freedom of speech do not mean freedom of defamation, freedom of oppression and freedom of opprobrium. (see: Genex Communication v. C.R.T.C. 2005 FCA 283, leave to appeal to SCC denied. Regarding foreign ship and Internet broadcasts, these are physically beyond the reach of the Canadian regulator. Without having a Canadian licence to lose in the first place, nor a Canadian presence, very little leverage can be brought to bear against broadcasters located outside Canada in cases of offensive content.

CHAPTER 4. INTENTIONAL TORTS Chapter Topics Tort Law Defined The Development of Tort Law Intentional Interference with the Person Intentional Interference with Land and Chattels Business-Related Torts and Crimes Summary Key Terms Review Questions Mini-Case Problems Chapter Objectives After study of this chapter, students should be able to: • Identify intentional interference with a person that constitutes a tort. • Explain the concept of vicarious liability. • Explain how land and chattels may be the subject of intentional torts. • Recognize business-related intentional torts and those that are crimes. YOUR BUSINESS AT RISK Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-24

This chapter is about civil wrongs: people and events that cause injury, and the rights of injured parties. You and your business are capable of causing serious injury or you or your business may be injured by others. When this happens, it is vital to know what sort of injury is recognized by the law. You must know where responsibility for that injury begins and ends, and what kind of compensation is available.

CHAPTER COMMENTARY Chapter 4 introduces the first area of the law of torts and some of the more important (and common) acts of intentional interference with persons or property. Since tort law represents one of the oldest areas of the law, its development is one of the best examples of laws which were established in response to the needs of society. Most of these principles were formulated long ago, and have been refined over the years as society changed. The basic intentional torts and the principles associated with them are examined in the first part of this chapter, and the concepts applied to business-related activities are found in the last part of the chapter. Note that the business-related torts set out are those where the intention to injure competitors is an essential component of the tort itself. Chapter 4 also examines a number of the more common torts that involve intentional interference with the rights, property, or person of another. These various torts rank among the oldest and, in many cases, constitute crimes under the Criminal Code. For the purpose of re-enforcement, it might be a useful exercise to note once again that torts (and in particular the torts covered in this chapter) may be subject to both civil and criminal proceedings if they constitute crimes as well as civil wrongs. Many of the torts described in this chapter in some instances have an a defence which may constitute Many of the torts described in this chapter in some instances have an a defence which may constitute justification for the act, and may wholly or partially absolve the actor from liability. These should be discussed, along with their limits. Ex: assault/battery and the act of self-defence. Similarly, the tort of defamation, and the defence of privilege should be examined. Most of the torts described in the chapter are generally well-known to students, and class discussion should perhaps be used to explore the various defences in detail, as well as the issue of damages or compensation for the party injured by the wrongful act. Unlike the torts covered in the next chapter, those described in Chapter 4 are not directly concerned with the concept of foreseeability, etc., but more with the question of intent to injure. Because these torts tend to be deliberate acts, this aspect of the various torts should be emphasized. Care should be taken, however, to note the exceptions such as battery situations, where the 'touching' is without consent, but where the intention is not to injure. For example, a medical practitioner performs a surgical procedure without the patient's consent. The medical practitioner may have had the best of intentions, and performed the operation to improve the patient's health, but in doing so without consent would have committed a battery. The chapter also introduces a number of new legal terms that you will find described in the ext material: assault, battery, false imprisonment, defamation, slander, libel, trespass, conversion, and punitive damages. Definitions of these terms should be committed to memory and understood thoroughly by the students. In addition to the text description, the Glossary at the back of the text might be consulted for brief definitions of the various terms. While the particular torts described in this chapter tend to be among the oldest, the very oldest are perhaps the torts of assault and battery. It is important to note with these particular torts that the assault is the Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-25

threat of violence, and the battery is the touching of the victim without consent. The quote from the case of MacDonald v. Hees examines the act of assault, along with a few comments on how it is established in a tort action. Another very old tort, the tort of false imprisonment, is also described in the chapter, and it may come as a surprise to students that actual physical seizure or restraint is not always necessary to constitute this tort. As the text indicates, the mere threat of pursuit and the embarrassment of seizure if the person should attempt to leave the premises is sufficient in certain circumstances. The law as it relates to defamation (libel or slander) and the defences to defamation are set out in of the text. While the tort is quite straight-forward, the defences often create some difficulty. The truth of the statement, qualified privilege, absolute privilege, and public interest are four defences outlined in the text. Persons speaking in Parliament or in court have absolute privilege in so far as statements they make are concerned, and the statements do not constitute torts, even though the statements may seriously injure the reputation of others. Qualified privilege, on the other hand, may be somewhat more difficult to understand, because the law does permit persons under limited circumstances to make statements which they honestly believe to be true at a point in time, and which later may prove to be false. The letter of reference mentioned in the text is a good example of the type of situation where a qualified privilege may arise, as the law must "balance" two interests: the protection of the individual's reputation on the one hand, with the bona-fide interest of the person who receives the communication on the other. In addition to questions of privilege, are matters of public interest. The Supreme Court of Canada has ruled that responsible communication with attempts to verify sources may be raised as a defence in matters that may be otherwise damage a person‘s reputation, but for some urgency of public interest. Interference with land and chattels represent the torts of trespass to land and conversion. The quote from Wiretap Reference, 1984 CanLII 31 (SCC), presents the position the courts take towards property and the owner's right to exclude others. The judge in the case outlines the nature of trespass, and indicates that a person who trespasses need not cause damage to the property to be liable at law for the act. Business-related torts and crimes tend to be those torts designed to injure competitors by slandering their goods or their business name. Students should be reminded that the reputation of a business and the reputation of a product are important 'assets' of a business and entitled to protection under tort law. The protection of a reputation of business (or product) is possible by way of an action for slander of goods or slander of title, but it should also be noted that untrue statements about the reputation of a business person would be actionable as defamation. Breach of confidence is a tort often related to improper disclosures of business or trade secrets. Where unlawful acts of one person consequentially interfere with the economic relations between another person and a third party, this has been ruled as a tort by the Supreme Court of Canada. The interference itself may be an independent crime, but its effect is a tort. Certain business-related activities are actual 'crimes'.. Note that some of these activities are covered in greater detail in other chapters of the text. For example, conspiracies to fix prices, etc., are covered in Chapter 32 which deals with the Competition Act. Instructors teaching a one-term course may wish to expand upon the material in Chapter 4 by reference to the material in Chapter 32 if they do not intend to include the latter Chapter in their course material.

The Court Decisions in this chapter illustrate two of the more common intentional torts, and two of the defences. In the case of Bruce v. Dyer, the Judge explains the law of assault and the right of self-defence. In your discussion take note that the right of self-defence arises when the defendant has reasonable grounds for believing that he or she is about to be attacked and cannot safely avoid the attack. It should also be noted that the use of force in self defence, as the Judge indicates, must only be the amount of force necessary to stop the assault (i.e. it cannot be excessive).

Review Questions 1. Distinguish between the civil and criminal aspects of intentional torts such as assault and battery, or false imprisonment. Answer: The civil aspects involve compensation for the injury suffered and perhaps punitive damages to deter the wrongdoer from repeating the act. Criminal aspects concern only punishment by the state for the breach of the peace.

2. How does an "assault" differ from a "battery"? Must both have a violent element to them? Answer: Assault represents a threat of violence. Battery involves the touching or striking of another. Battery need not have a violent element, as it is the touching of another without his/her consent. E.g.: a surgeon performing unauthorized surgery on a patient may constitute a battery.

3. Under what circumstances might a person accused of assault and battery raise self-defence as justification? Answer: Self-defence may be raised as a defence where a person had a genuine fear of injury to their person as a result of a threat of violence (assault) and acted to prevent the battery. See Bruce v. Dyer for example.

4. Explain the circumstances under which the tort of false imprisonment might arise. Answer: Any unauthorized restriction on the freedom of an individual may constitute false imprisonment. This may include a case where a shop-keeper apprehends a person stealing merchandise from a shop, and requires the person to remain until the police arrive.

5. Distinguish between slander and libel. Why is libel generally considered to be more serious in the eyes of the law? Answer: Both constitute defamation. Slander is spoken defamation. Libel would be written defamatory statements. Libel is the more serious as it is recorded, and others may read it over the years. Slander may soon be forgotten.

6. Define qualified and absolute privilege, and explain the circumstances where each might be claimed. Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-27

Answer: Absolute privilege - statements made in Parliament, before legislative Commissions, in court, coroner's inquests, or in certain quasi-judicial proceedings. Places where it is in the public interest to permit absolute freedom of comment. Qualified privilege - statements made in good faith and without malicious intent where, on balance, it is in the interest of the public to have the statements made on the basis of honest belief in their truth, e.g.: letters of reference.

7. How does the tort of trespass to land arise? Must damage occur for the tort to be actionable? Answer: Trespass to land arises where a person enters on the land of another without authority or permission to do so. No damage need occur for a trespass action to stand.

8. Explain the difference between the conversion and theft of goods. Answer: Conversion is the willful refusal to deliver up goods to the rightful owner where the goods came into the hands of the person either by lawful means (permission of the owner) or by unlawful means. Theft is the unlawful taking of goods.

9. Explain slander of title. How does this differ from ordinary tort law related to defamation? Answer: Slander of title arises where a person makes an untrue statement about the right of another person to the ownership of goods.

10. Explain the rationale behind the law that condemns as a tort any third-party interference with the performance of contracts made between other persons. Answer: The purpose of the law is to support the rights of the parties under a contract, and to discourage any third party from interfering with the performance of contractual duties. 11. Define: ―passing off‖, ―plagiarism‖, ―slander of goods‖. Answer: Passing off:

Selling goods represented as being the goods of another well known reputable maker or seller.

Plagiarism:

The theft of the design, etc. of goods of another and presenting them to the market as if they were the goods of that maker, such as using another seller's trade name or mark.

Slander of goods:

A statement that alleges that the goods of a competitor are defective, shoddy or injurious to the buyer's health or safety.

12. Give an example of "involuntary entry on the lands of another." Answer: An involuntary entry on the lands of another might occur where a person is pushed off a road or sidewalk onto the lands of a property-owner, or where an aircraft experiences engine problems and makes a 'forced landing' in an open field of a property owner.

13. Does false imprisonment always have a criminal aspect to it? Explain. Answer: False imprisonment need not have a criminal aspect to it if it is done with the honest belief that the person detained has committed a crime. This belief, however, may not permit the person to avoid the tort consequences of the act. 14. To what extent, if any, is a publisher libel for the publication of a slanderous statement made by a person other than the publisher? Answer: Slander is the verbal publication of a defamatory statement. Libel is the written publication of a defamatory statement. A person who publishes a defamatory statement made by another knowing it to be untrue (such as in the case of a newspaper or magazine) would also be subject to a defamation action for publishing the untrue defamatory statement.

Mini-Case Problems

1. A lawyer who was also a professional boxer was traveling by train from Winnipeg to Regina. He was sitting next to a woman who, during the course of a conversation, said: ―Professional boxers should be charged with assault and battery each time they engage in a prize fight.‖ As a lawyer, how should he respond to her statement? Answer: With professional boxing, blows are struck with the tacit approval of the other fighter. Each voluntarily assumes the risk of injury provided that the rules of the sport are followed. There is no assault preceding a blow as both parties make no threats to injure the other. Volenti non fit injuria.

2. The house in which X resided was located on a busy street. From time to time, vandals had broken into his garage and stolen tools and equipment he had stored there. One evening, just at dusk, he saw someone enter his garage. He quickly rushed out to the garage, closed the door, locked it, then called the police. When the police arrived, X discovered that he had locked the municipal building inspector in the garage. Discuss the legal position of X and the building inspector. Answer: X, based upon past experience, had an honest belief that the person was a thief or trespasser. The building inspector, while perhaps entitled at law to enter on the property and inspect it, by his actions of not informing the property owner of his intention, gave X the impression that he was a thief. X's honest belief that he had

caught a thief may be an excuse. X's failure to determine the identity and reasons for the inspector's entry on the premises, however, may render him liable for the tort.

3. At a packed public meeting of town council, an irate taxpayer named Kilmer questioned the council repeatedly, at length and in detail, about a proposed new sewer system. Exasperated with Kilmer‘s domination of the questioner‘s microphone (but despite the audience‘s apparent contentment to let Kilmer ask questions), one of the councillors blurted: ―Kilmer, you‘re an idiot. In fact, you come from a long line of idiots. Can‘t you see we don‘t have all the sewer answers yet? It‘s just the early stage of the planning process for this.‖ Embarrassed, Kilmer left the room. If Kilmer approached you for advice, what would you offer? Answer: Kilmer may file suit for defamation, specifically, slander as the spoken form of defamation. The public meeting extends the damage, rather than protecting the speaker, for it is neither Parliament nor a quasijudicial proceeding, which would give rise to absolute privilege. If qualified privilege is advanced as a defence, it is unlikely to succeed, for the statements suggest a lack of good faith, and perhaps even malicious intent. One possible defence may be truth of the statements, but even in the face of medical proof, the use of slang and manner of delivery suggest the statements were made with the intent of humiliation.

4. You have decided to open a new nightclub in a university town and have decided to hire part-time employees as ―security staff‖ for the dance hours of 7 p.m. – 1 a.m. Write a set of notes regarding the policies you want your security staff to observe and the legal liability that may result if they fail to adhere to those policies. Answer: Students should cover the essential elements of assault, battery, self-defence and false imprisonment. As a matter of bonus, students may recognize that the employer will be vicariously liable for the torts of the employees committed in the course of their employment.

5. Joe hits Bob. Discuss the legal issues raised as a result. Answer: Students should identify and discuss the situations of battery (Joe is a mugger), consent (Joe and Bob are prize fighters), and self-defence (Bob has already hit Joe).

6. The Millport Trucking Company was under contract to Budget Foods Inc., a major grocery chain, for the delivery of fresh dairy products and eggs to its supermarkets in western Canada. A competing grocery retailer, FreshFood Stores Ltd., began posting comments and reviews on Budget Foods‘ website stating that its dairy products were overpriced and of poor quality. It blamed the quality problems at Budget on its unreliable transportation suppliers such as Millport Trucking, claiming its fleet of refrigerated trucks were always breaking down and aging the products. FreshFood‘s reviews further warned customers of the health dangers of consuming dairy products purchased at Budget Foods. Does Budget Foods have any recourse in this situation? Answer: Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-30

This situation raises several intentional torts. Defamation is at the heart of this situation and may be actionable by both Budget Foods and Millport Trucking using different arguments. FreshFoods posted libelous internet reviews that were intended to damage the reputation of Budget and to discourage customers from shopping there. Budget may also make claims stemming from intentional interference with economic relations, slander of goods and injurious falsehood. FreshFood‘s defamatory statements and actions targeted Budget‘s business enterprise as a whole by attacking the quality of its dairy goods and implying that customers may become ill if they consumed products purchased from Budget. Moreover, Millport may be discouraged from dealing with Budget in the future as a result of alleged unsolicited and unproven statements from FreshFoods. Millport Trucking‘s own reputation may have been harmed as a supplier to the grocery industry and it may also claim damages. FreshFoods may attempt to defend any of these actions by claiming its statements are true. It will have to satisfactorily prove its claims on the balance of probabilities.

Case Problems for Discussion Case 1 Lukas owned a small factory of long-standing reputation, and bid successfully on a contract from Atlas Aircraft. The aerospace manufacturer‘s contract was for Lukas to supply custom-made hydraulic cylinders for landing-gear assemblies. To execute the job, Lukas required a heavy metal milling machine capable of handling large pieces with high degrees of precision. He had heard of the impressive capability of the Stormsen 1500 mill and placed an order for one, which in time was delivered and installed. Over a period of months, Lukas found the machine was constantly working out of adjustment, causing much of its output to fail quality control. Six times, Lukas caught as many as 2 faults in a job lot of 20 cylinders, and on one early occasion Atlas Aircraft returned a cylinder as substandard. After consulting all the Stormsen manuals, looking for an adjustment solution, Lukas called in the area distributor for consultation. No long term solution to the wandering adjustment seemed apparent, and Lukas began placing calls to the Stormsen Company itself. In the meantime more cylinders had been rejected by Atlas, whose chief engineer (a personal friend of Lukas) wrote Lukas a letter wondering why ―suddenly [it] was receiving crap.‖ Lukas‘ calls to Stormsen were fielded by an engineer/manager, Lewis Cranston, but Lukas remained far from satisfied. Within another month, Lukas visited a tradeshow where Stormsen machines were displayed, and in the display area was Cranston. The two, meeting for the first time, exchanged words before the shouting began. In the end, they had drawn quite a crowd of factory owners and two writers from a trade journal. The exchange ended with Lukas brandishing the Atlas letter before the onlookers, shouting ―The 1500 produces crap, Atlas calls the 1500 crap, and I call the 1500 crap!‖ Discuss the tort issues that may arise from this situation. Answer: As the culminating events of this slander of goods case take place in a public place, there is little in the way of defence, except truth. Unfortunately (for both parties – Lukas and Stormsen) the word ―crap‖ is a somewhat vague adjective to describe a hydraulic cylinder. What is not vague however, is that it calls into question the quality of the cylinder, and this then is a matter of fact, and in turn, truth. A ten percent failure rate (2 of 20) may in fact be ―crap‖ for an industry demanding high performance standards, and truth will be an absolute defence. Students may wish to consider the position of Atlas, who started the ball rolling with a private letter, now being brandished and recited in a public place. The Atlas intent may not have been to slander, and they could in turn sue Lukas for causing the damages with public disclosure if Atlas were found liable, but again, truth of the statement may come to the rescue of Atlas. Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-31

Case 2 The plaintiff, a nurse, was injured in a motor-vehicle accident and was taken to a local hospital. She was examined by the defendant, who could find no physical injury other than a few minor bruises. She was discharged from the hospital the next day when she admitted that she ―felt fine.‖ Within 24 hours after her release, she returned to the hospital. She complained to the defendant of painful headaches and remained in hospital for a month. During her second stay in hospital she was examined by three neurosurgeons who could find nothing wrong with her. On her release from the hospital, she instituted legal proceedings against the parties responsible for her automobile accident, and her solicitor requested a medical opinion from the defendant to support her case. In response to the solicitor‘s request, the defendant wrote two letters that were uncomplimentary and suggested that the plaintiff had not suffered any real physical injury. In addition, the defendant had indicated on the plaintiff‘s medical records that the plaintiff was suffering from hypochondriasis. After her discovery of the uncomplimentary letters and medical reports, the plaintiff brought an action against the defendant for libel. Examine the arguments that might be raised in this case and identify the defences (if any) to the plaintiff‘s claim. Render a decision. Answer: The facts of this case provide a basis for the discussion of the ingredients of a libel or slander action. Class discussion should establish the grounds for such an action, and whether the written statements were malicious. The defences noted in class discussion should perhaps deal with qualified privilege, the presumption of good faith (where the plaintiff bears the burden to rebut by way of proof of malice), absolute privilege, and the circumstances under which each might be raised. In the case of Foran v. Richman, 1975 CanLII 760 (ON CA) (on essentially the same facts) the court held that the circumstances were such that the defence of absolute privilege would apply, and the plaintiff's action was dismissed. The case of Pleau v. Simpson's-Sears Ltd., 1977 CanLII 1325 (ON CA) also provides a useful discussion of the law on the question of qualified privilege.

Case 3 Gretel was shopping at a large shopping centre and, while walking through the crowded mall area, she saw a youth pushing his way through the crowd in what appeared to be an attempt to escape from a man in a dark-blue uniform, who was following him. At that time, Gretel was standing near the exit from the building. When the youth finally broke through the crowd and attempted to leave the building, she stepped in front of him to block his path. The youth collided with Gretel, and the two parties fell to the floor. Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-32

Gretel seized the fallen youth by the arm as he attempted to stand up and tried to pull him back down to the floor. The youth then struck Gretel a blow on the side of the head with his fist, causing her to lose consciousness. The youth, as it turned out, was hurrying through the crowd in an attempt to catch a bus, and the older man, who was following him through the crowd, was his father. The youth‘s father was employed as a security guard at the shopping centre and was leaving work for the day. Explain this incident in terms of tort law and tort liability. Answer: This case may be used to distinguish an assault and battery situation from false imprisonment. Was her act one of disabling the youth in order that he might be apprehended, or was it an attempt to prevent him from leaving the premises? To interfere with a person's freedom to go wherever he pleases (in this case exit the building) would represent a violation of his rights, and represent a false imprisonment, although her actions could also constitute an assault on the youth. Class discussion should identify the elements associated with both torts in terms of duty not to injure, and the question of "justification" in the case of false imprisonment. A question to ask here is whether the youth was justified in striking Gretel when she seized the youth by the arm. Was his action self-defence? If so, did he use more force than necessary? Based upon Bruce v. Dyer in the Judicial Decision, the youth may have been entitled to strike back, since he had no knowledge of why Gretel acted in the manner she did, and had no other means of escaping from her. With respect to her own injuries, Gretel would not likely recover damages from the youth, since it was she who deliberately stepped into his path.

Case 4 A university operated a tavern on its premises for the benefit of its students. One student, who attended the tavern with some friends for the purpose of celebrating the end of the fall semester, became quite drunk. The tavern bartenders realized that the student was drunk around 11:00 p.m. and refused to serve him any additional alcoholic beverages. They also asked him to leave the premises. The student, however, remained and drank two additional beers that were purchased for him by his friends. Some time later, around 12 a.m., one of the bartenders noticed the student drinking and instructed the tavern bouncer to ask the student to leave. The bouncer did so, but the student refused, and the bouncer took the student by the arm and escorted him to the door. Along the hallway to the door the student was abusive and resisted leaving, but the bouncer managed to eject him from the building. A few minutes later, the student returned to the tavern and slipped by the doorman for the alleged purpose of obtaining an explanation as to why he had been ejected. About eight feet from the door, he was apprehended by the bouncer and once again expelled from the tavern, but not without some resistance in the form of pushing and shoving and abusive language on the part of the student. In the course of ejection, the student fell against the door and smashed a glass pane in the door, which caused severe lacerations to his hand. The injury to the student‘s hand required medical treatment and took several months to heal. The student brought an action against the university and the bouncer, claiming damages and claiming Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-33

as well that the injury he received caused him to fail his mathematics course in the semester that followed the accident. Discuss the issues raised in this case and the various arguments that each party might raise. Render a decision. Answer: The case deals with the rights of an occupier of property to eject a person from property, and the application of force in the exercise of rights. Questions that might be raised in connection with these issues are: What is the status of the drunken student once he was requested to leave the premises in the first instance? Did the 'bouncer' commit a tort by taking the student by the arm and ejecting him from the premises? Did the student commit a trespass by returning for an explanation? Did the bouncer's actions on the second occasion constitute a tort? Was the University and the bouncer responsible for the student's failure of the mathematics course the next semester? Students should note that the drunken student had entered on the premises lawfully, since he was of lawful age and a student at the University. The bartenders were entitled to ask the student to leave when he became drunk. When he refused to leave, he became a trespasser, and the occupiers (the bartenders and bouncer) were entitled to take reasonable steps to remove him from the premises. However, when the student refused to leave, the police should perhaps have been called to deal with the student, as any excess force on the part of the bouncer might be considered an assault and battery. As a general rule, a person may eject a trespasser from property if the trespasser refuses to leave after being told to do so, and the person in possession (owner or tenant) may use whatever force is necessary to eject the trespasser. The student would probably be unsuccessful in his action against the university and the bouncer. The injury to the student's hand was a result of the student's resistance to ejection rather than a deliberate act on the part of the bouncer to injure the student. Case 5 The Silver Sports and Recreation League was a women‘s hockey league that operated under Canadian Amateur Hockey Association rules. Under the rules, no bodily contact was permitted by the players. During the course of a semi-final playoff game between the Silver Lake Lions and the Calabogie Cats in the Silver Lake Municipal Arena, April, the star centre of the Silver Lake Lions, was attempting to regain control of the puck in her own end of the ice when Carol, a defence player of the Calabogie Cats, collided with her from behind, driving her into the boards. As a result of the collision, April suffered a serious injury to her neck and spine. Immediately after the collision, the referee, who had witnessed the collision, stopped the game and awarded a ―match penalty‖ against Carol on the basis that she had deliberately attempted to injure April. According to the referee, Carol and April were both skating towards the puck, with April ahead of Carol. Upon reaching the puck, April stopped abruptly. Carol, in the process of stopping, raised her hockey stick to a horizontal position in front of her body just before she collided with April from behind. The blow from the horizontally held hockey stick prevented Carol‘s body from striking April, but the impact of the hockey stick propelled April into the boards. The linesman, who also witnessed the incident, reported that from his point of view, Carol had pushed April from behind either to move her away from the puck or to avoid a more violent collision. The impact, however, in his opinion, only caused April to lose her balance and it was her loss of balance that resulted in her fall against the boards. Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-34

April subsequently instituted legal proceedings against Carol for her injuries. Discuss the various legal arguments that each party might raise, and render, with reasons, a decision. Answer: The Silver Lake Sports case examines the tort of assault and battery and the defence of consent. April would probably allege that she was injured as a result of Bertha's deliberate act (battery?). Bertha might raise the defence of implied consent by April, by engaging in a game where some contact could be expected. Students might be asked to consider whether a person engaging in a game that involves some bodily contact (even if accidental) has assumed the risk of possible injury, or consented to the contact. Students might then be asked to determine the 'limits' of the consent. Would it extend to deliberate contact? If so, how would this be determined? Does the application of Amateur Hockey Association rule of no bodily contact negate consent entirely or would it only be interpreted to exclude deliberate contact? The facts of the case are based upon the case of Regina v. Leclerc (1991) 4 O.R. (3d) 788, where the Court of Appeal considered the facts in a criminal law context. The court, however, stated that if a player participates in a sport such as hockey the player must accept the risk that some bodily contact may occur, because it is incidental to the game. The contact may result in some injury, and if not deliberate will fall within the implied consent. However, deliberate acts that injure would be outside the orbit of immunity, and would attract liability.

Case 6 Jonas purchased a picnic basket at a hardware store in a nearby shopping mall. The basket was not wrapped by the sales clerk at the conclusion of the transaction. Jonas carried his new basket with him to a supermarket located in the same mall, where he intended to purchase a quantity of grapefruit. At the produce counter he could not find grapefruit on display, and asked the clerk if the store had any in stock. The clerk offered to check in the storage room for him. While he waited for the clerk to return, Jonas picked a quantity of grapes from a display case and ate them. A few moments later, the clerk returned to inform him that all the grapefruit had been sold. As Jonas left the store, he was seized by the store owner and requested to return to the owner‘s office. Jonas obediently followed him back inside the store. Once inside the owner‘s office, the owner accused Jonas of theft; then, without further explanation, telephoned the police. When the police officer arrived, the store owner informed him that Jonas was a thief and that he had apprehended him just outside the store. Jonas admitted eating the grapes, then to his surprise, he discovered that the owner had apprehended him because he (the owner) thought Jonas had stolen the picnic basket. Both the supermarket and the hardware store sold similar baskets; even on close examination, the products appeared identical. With the aid of the sales clerk at the hardware store, Jonas was able to convince the police officer that he had purchased the basket which he had in his possession. He later decided to bring an action against the owner of the supermarket for false imprisonment. Discuss the issues raised in this case and determine the respective arguments of the parties.

Render a decision. Answer: This case concerns the question of false imprisonment and the theft of goods, although the detention of Jonas was not for the theft of the goods actually taken (the grapes), but for what appeared to be the theft of the shopping basket. Clearly the owner was in error by apprehending Jonas and requesting him to return to the store while he telephoned the police without first determining how Jonas acquired the shopping basket. However, in assessing the owner's actions, the matter of Jonas's taking of the grapes should be discussed. Some of the questions that might be raised could include the following: What are the elements of a false imprisonment? Was Jonas really detained against his will? Is this a case of false imprisonment, or did Jonas consent to the detention in the belief that he was guilty of the theft of the grapes, and must give himself up to the police officer? Was the store owner absolved from liability for false imprisonment when Jonas confessed to the theft of the grapes? What was the position of the police officer in the case? Did the shop owner have reasonable grounds for the detention of Jonas, and could he prove "justification"? In reaching a decision in this case, two cases might be referred to: Cannon v. Hudson's Bay Co., [1939] 4 D.L.R. 465 in which the court held that an employee who was detained without consent, searched, and found innocent of theft, was entitled to damages for false imprisonment, and LeBrun v. High Low Foods Ltd., (1968 CanLII 609 (BC SC)), 69 D.L.R. (2d) 433, in which the court held that the manager of a store who did not have reasonable grounds for his belief that a customer has stolen goods was liable for false imprisonment when he detained the customer until a police officer arrived to search the customer's vehicle. Case 7 Justin and Therese met during his business studies and her electrical engineering studies. They lived together and eventually both worked for Cosmic Star, a company producing Global Positioning System navigation receivers. Justin worked in the marketing department and Therese worked in the design department. With considerable in-house research, Therese developed an algorithm that reduced fuzziness in the GPS signal, making the receiver ten times more sensitive and accurate. It was a fundamentally simple equation, and with considerable pride she had explained it to Justin more than once. Not all that long later, Justin left Cosmic Star to work for its competitor, NavDirect Industries. About a year behind Cosmic Star and six months after Justin joined the company, NavDirect began producing a GPS that contained an algorithm remarkably similar to the Cosmic Star model. Some months later, NavDirect was prospering while Cosmic Star began showing signs of financial problems, and Therese joined Justin at NavDirect. Her departure soon caused Cosmic Star to look closely at the technology in NavDirect products. Upon finding the algorithm that Therese developed, Cosmic Star headed to its lawyers for assistance. Discuss the advice Cosmic Star would likely receive. What advice would you give to each of Justin, Therese, and NavDirect? Answer: In advising the individual parties, students should recognize the essential elements of trespass to goods (conversion) and the tort of breach of confidence. While students have not yet been exposed to the elements of contract, they should sense that there may be requirements of non-disclosure and confidentiality that may be part of the contract of employment. Students should not fail to realize that while the torts may be personal, as NavDirect is employing Therese and Justin, NavDirect may bear responsibility for their torts (if any). Cosmic Star faces the lways-present issues of proof, that in fact NavDirect gained its advantages through the Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-36

torts of Justin and Therese. An issue of timing also affects what tort is provable on whom, for if Therese‘s early disclosure was to Justin as a fellow Cosmic employee, and later offered nothing to NavDirect, then Justin should be the focus of liability.

Case 8 Nico owned a strip mall development along a busy suburban city avenue. One of his tenants operated a small shop selling new and used sewing machines. Over a period of six months, it was apparent to Nico that his tenant was in trouble. Originally, the rent was paid in full and on time. Then the tenant paid in full but late; then it was on time but short; then finally short and late, then for two months nothing at all was paid. Realizing that this would only go from bad to worse, Nico called a locksmith who drilled out and replaced the door lock. Nico moved the inventory of twenty sewing machines into the back storage room, clearing away the stock from the shelves visible from the front window. He placed a ―For rent‖ sign in the window, set the alarm, and left. When he returned the next morning, he found the door lock smashed, the alarm disarmed, and the inventory gone. Discuss the rights, responsibilities, and defences the parties may raise in this situation.

Answer: Again, there may be elements of contract which students may wish to speculate on, however, strictly in terms of tort, the issues are conversion of goods (which may fail as the landlord had colour of right to seize the goods for unpaid rent), trespass, and willful damage. The tenant may allege trespass in contravention of his lease, however, the lease would likely contain a clause allowing re-entry upon failure in payment of rent. As the alarm was turned off, it appears the tenant was the person who broke in later, and thus would be liable for the damage caused, as whatever lease rights he or she had, they did not include a right to damage. Whether the tenant‘s actions are actually trespass is debatable, depending on whether he or she is actually still the beneficiary of a commercial lease with unpaid rent. Students should be reminded that the rights and remedies available in commercial tenancies fail to give tenants the protection available under residential tenancy law.

CHAPTER CHART

CHAPTER 5. NEGLIGENCE AND UNINTENTIONAL TORTS Chapter Topics Negligence Occupier‘s Liability Manufacturer's Liability General Tort Defences Tort Remedies Summary Key Terms Review Questions Mini-Case Problems Case Problems for Discussion Chapter Objectives After study of this chapter, students should be able to: • Explain the chief elements of negligence: duty, breach, damage and causation. • Explain the relevance of foreseeability and the ―Reasonable Person.‖ • Explain the concepts of strict and vicarious liability. • Describe instances of tort liability arising from product defects. Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-38

• Describe the chief defences and remedies in unintentional tort cases.

YOUR BUSINESS AT RISK Negligent acts and accidents happen. Businesses must be aware of when, how, and to what degree they will be responsible for unintentional or careless acts, and to the extent that they may recover for careless acts done to them. A single liability suit for an accident that could have been avoided can run to millions of dollars and may bankrupt the dreams of the owner or investors.

CHAPTER COMMENTARY Torts associated with unintentional interference with persons or property are generally associated with careless acts or a failure to act, and the concepts of duty not to injure, foreseeability, and standard of care should be considered in their application to these types of torts. It is important to note that the concept of strict liability has remained over the years as an important determinant of liability in cases where persons keep in their possession something capable of causing injury if it should escape. This must usually be something which is not normally confined, or something which, if confined in a particular way, creates or has the potential of causing injury if it escapes. Examples would be the confinement of a dangerous wild animal, or the storage of a large quantity of water in a reservoir. The courts generally consider both of these activities to be inherently dangerous, and if the animal or water should escape, the likelihood of injury to a neighbour is very great. Judges generally assume that the person who engages in this type of activity is aware of the dangers involved, and of the potential for harm. As a consequence, they are usually held responsible for any damage caused if escape occurs, regardless of the precautions taken to prevent the escape. Students should be made aware that liability in these instances would likely be determined on the basis of strict liability. Apart from cases where strict liability might be imposed, tort liability is generally concerned with the right of a person to live without interference or injury to their person or property by others. Tort law, consequently, imposes a duty on persons not to injure others, or their property. This concept of a duty not to injure forms the basis of a great many kinds of torts: negligence, nuisance, defamation, etc., as well as most crimes of violence. It is important for students to realize that the duty is not absolute, otherwise it would represent a strict liability situation. In most cases, the duty will be subject to a standard of care, or the concept of foreseeability. On these points, as the text indicates, the standard of care is usually the standard of the ―reasonable person‖, and the conduct of the person is compared to that standard. In a similar fashion, the question of foreseeability is usually framed by the words ―would a reasonable person under similar circumstances have foreseen the possibility of injury?‖ The chapter also provides a brief outline of a number of other tort concepts. These are the concepts of circumstantial evidence and res ipsa loquitur (―the thing speaks for itself‖) as well as volenti non fit injuria (voluntary assumption of risk). The former of these is used to shift the onus to the person causing the loss to show no negligence in cases where it is impossible for the injured party to know exactly how the injury came about, such as in an aircraft accident. The latter concept is used as a defence when a claim for injury is made.

The doctrine of foreseeability, the standard of the ―reasonable person,‖ and their application to the question of liability should be re-enforced by way of examples, such the narrative of the roofer, shingles and the rainy-day accident raised in the text. A series of incidents similar to the above, or the case problems may be used to discuss and illustrate the various concepts covered in the chapter. Note that in some provinces (such as Ontario) virtual strict liability may be imposed by statute upon dog owners for injuries caused by their dogs (subject to certain exceptions). The Common Law standard is consequently replaced by a higher standard in these instances. See: for example: Dog Owner’s Liability Act, R.S.O. 1990, c. D-16. This statute, to some extent extends the principle of Rylands and Fletcher to dogs in so far as their danger to the public is concerned. Another useful approach might be to describe an incident, then have the class examine the incident by raising the questions: Does the defendant owe a duty to the plaintiff? What is the duty owed? What standard or care must be maintained? Did the defendant breach the duty, such that ―but for‖ the defendant‘s actions the injury or damage not have occurred? Did the plaintiff suffer an actionable loss as a result? In any class discussion, the standard of care, foreseeability of injury, and the reasonableness of the actions of the defendant should be underscored as the important determinants of liability in order to avoid giving the impression that once a duty is owed, any injury which follows is actionable. The case of Burrough v. Town of Kapuskasing, 1987 CanLII 4236 (ON SC) may be used to illustrate occupier‘s liability and the defence of volenti non fit injuria (voluntary assumption of risk). The case is useful for class discussion purposes because the Judge not only discusses the defence in detail, but also examines occupier‘s liability by reference to the duty of an occupier of land to invitees. The Judge does this by reference to cases on this topic. (See for example, case reference to Such v. Dominion Stores Ltd. where the general rule concerning occupier‘s liability as stated in Indermaur v. Dames is considered). With regard to occupier‘s liability, a number of provinces have passed legislation to eliminate the distinction between licensees and invitees, and to establish a statutory standard of care for occupiers. British Columbia, Alberta, and Ontario are provinces that have taken this approach. It might also be worth noting that the liability of occupiers of land, which in the past has been subject to some codification in the form of petty trespass acts and other similar legislation, has been the subject of more extensive codification in some provinces in recent years. This has tended to delineate the rights and duties of landowners and other occupiers of land. See for example, Ontario, the Occupiers’ Liability Act, R.S.O. 1990, c.0-2. Product liability is a growing area of tort law as products become more complex. It is essentially an ordinary negligence action, where the manufacturer may be held liable if the consumer is injured by a product that was negligently made, or where the user was not warned of the dangers associated with the use of the product. The case of M’Alister (or Donoghue) v. Stevenson which is described briefly in the text, and in the Court Decisions outlines this liability, and the standard of care required of manufactures of products. The More v. Bauer Nike Hockey case goes on to illustrate the ―but for‖ test in action. The plaintiff has the burden to show that ―but for‖ the negligent act or omission of the defendant, the injury would not have occurred. Even so, the standard required is not perfection, nor is the defendant an insurer from harm; in this case it is to provide a reasonable level of safety for rear impacts. Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-40

Classroom review of the chapter should also include a review of the defences which might be raised to a claim in tort. Instructors should note, however, the limitations on waiver as a defence, since the circumstances under which torts arise may have a significant impact on the concept as a defence. Tort remedies are outlined in the text as they apply to unintentional torts. The topic of remedies is covered elsewhere in the text as well with respect to other legal relationships. Some instructors advise students at this stage that other remedies (such as injunctions) will be encountered later on in the text, and the remedies used in tort actions, such as money damages will also be dealt with as they apply to other types of injuries.

Review Questions 1. Distinguish between a moral obligation not to injure and a duty not to injure. Why is this distinction important? Answer: A moral duty is established by individuals. A legal duty is established by the state. The former is subjective, based upon the person‘s view of right and wrong; the latter is a clear standard which must be met to avoid liability for tort.

2. Why do the courts impose strict liability for damage in certain instances? Answer: Strict liability is generally imposed today where a person maintains an animal or thing which is potentially dangerous if not confined. Since these things are known to be dangerous, the person keeps them at his or her peril.

3. Explain the concept of duty of care as it relates to liability in a tort action. Answer: Duty of care is based upon the premise that a person should not do anything to injure his or her neighbour – hence the duty not to injure becomes an essential factor in establishing tort liability. Note that some individuals may have the right to injure or take the property of others. See text for examples. 4. Why are the concepts of duty of care and ―the reasonable person‖ important in a case where negligence is alleged? Answer: Duty of care is used to establish the relationship between the parties. A plaintiff must first show a duty not to injure exists, then establish the standard of care attached to the duty (the ―reasonable person‖). Finally, the plaintiff must satisfy the court that the defendant‘s conduct or actions fell short of the standard.

5. Explain the concept or doctrine of proximate cause in tort law. Answer: Proximate cause links the defendant‘s actions with the plaintiff‘s injury. The relationship must be direct and without any intervening events that would break the links in the chain of events. Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-41

6. How are the concepts of the reasonable man and foreseeability related? Answer: The ―reasonable man‖ and foreseeability are related in the sense that the standard for the latter is based upon whether a ―reasonable man‖ in similar circumstances would have foreseen the consequences of the act. Tort liability is determined using this standard of foreseeability – it is not based upon whether the tortfeasor had foreseen the likelihood of injury.

7. Identify and explain the essential ingredients of unintentional tort liability. Answer: First, a duty of care must be owed to the party injured. Second, it is necessary to determine if a breach of the duty occurred. This is done by determining the standard of care imposed – the test being the conduct of a reasonable person in the circumstances. ―Would a reasonable person have foreseen the likelihood of injury or damage to the party? Would a reasonable person have acted in a different manner? Where the defendant fails to maintain the standard of the ―reasonable person‖, liability would likely follow.

8. Does strict liability apply to manufacturers of goods where the goods are defective and cause injury or damage? Answer: No, although a very high duty or standard of care in manufacture is sometimes imposed at common law in Canada, depending upon the product. In some U.S. states, strict liability is imposed upon manufacturers of certain products.

9. What is the duty of care of an occupier of land to a trespasser? Answer: The duty of care to a trespasser is normally a duty not to deliberately injure or set traps to injure the trespasser. Note, however, the special position of children.

10. In some cases, the courts consider the public interest as an important aspect of a nuisance action. Why is this so? Give an example. Answer: In some cases the prohibition of a nuisance to protect one affected individual may have an impact upon the public generally, which could be far more serious, and the courts must consider both interests. For example, a ship-building firm makes a great deal of noise riveting sheets of steel on the hull of a ship. This noise disturbs residents who live nearby. To stop the noise, however, would cause the firm to cease operations and cause others to be unemployed. The courts must balance these two conflicting interests.

11. Is nuisance simply another name for negligence? If not, why not? Answer: Nuisance differs from negligence in that the nuisance is generally an on-going and deliberate act that interferes (sometimes unintentionally) with a person‘s enjoyment of their property. Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-42

Negligence usually involves an unintentional injury or interference with a person or their property, and may have nothing to do with the enjoyment of property. 12. Define: ―res ipsa loquitur‖. Answer: ―The thing speaks for itself‖ is a legal principle which shifts the burden of proof from the plaintiff to the defendant in a tort action. If the plaintiff can show that the injury was caused solely by that which was in the exclusive care and control of the defendant, and the plaintiff had no way of knowing how the injury was caused, the burden of proving no negligence is then on the defendant. The Supreme Court of Canada has now terminated the principle as a separate rule, but it lives on in circumstantial evidence presented against a defendant, for which the defendant must offer some explanation with evidence to the contrary.

13. Why was it necessary for the Common Law provinces to introduce contributory negligence legislation? Answer: Contributory negligence legislation was necessary to fairly apportion liability in cases where it was difficult to determine which party had the last opportunity to avoid the accident or injury.

14. Is the defence of volenti non fit injuria, in effect, the defence of waiver? Answer: Voluntary assumption of the risk is similar to waiver in the sense that a proper waiver will excuse the defendant from liability, as will a successful volenti non fit injuria defence claim. 15. Identify some situations in which an individual employee would not be protected by the “vicarious liability‖ concept resulting in personal liability to that employee. Answer: We have seen precedents in recent years, including from the Supreme Court of Canada, indicating that an employee will be named personally in a negligence suit when it can be reasonably expected that the employee personally owes a duty of care to his or her employer‘s customers. Examples of this are likely to include employees who directly interact with or provide direct service to customers. These could be employees in the hospitality industry and other service businesses. It may be reasonably foreseeable that the individual employee‘s actions toward the customer are the cause of the injury and the mere fact of employment should not protect him or her from liability under the vicarious liability principle. Contrast this to a production line worker who negligently assembles a product that ultimately harms a customer. In this case, the employee‘s actions do result in harm but the causation links are less clear than a server who pours hot coffee in a customer‘s lap. In the production worker‘s case, the employer would assume vicarious liability for the negligence of its employees as they do not directly intersect with customers. Although the employee‘s actions harmed a customer, the foreseeability is much lower and causation is several steps removed.

Mini-Case Problems 1. X, a trained and licensed plumber, carelessly installed a steam heater in Y‘s restaurant, and, as a result, Y was seriously burned when a heater pipe exploded. Z, a qualified medical practitioner who Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-43

treated Y at the hospital, prescribed an improper medication as treatment for the burn, which aggravated the injury. This obliged Y to undergo an expensive skin-graft operation to correct the condition. Discuss the responsibility of X and Z to Y. Answer: X was negligent in the installation of the heater, and at law would be liable for the injury to Y when the pipe exploded. This would include the damages for pain and suffering caused by the burn, and the lost wages, etc. plus the expected cost of medical treatment for the burn had the treatment been properly given. Z would be liable for the improper treatment, pain and suffering plus the costs associated with the expensive skin graft operation. Note that X would not be responsible for any of the damages which resulted from Z‘s negligence.

2. At dusk one evening, as X was hauling a load of rock in his truck, he saw a large piece of rock fall from the truck onto the traveled portion of the roadway. X continued on his way without stopping. Y, who was traveling in her automobile along the same road some time later, collided with the rock and damaged her automobile. Discuss the liability of X. Answer: X‘s liability would be determined by comparing his conduct to that of the ―reasonable man.‖ He owed a duty not to injure others using the road after dark. If a reasonable man would have foreseen the likelihood of someone else colliding with the rock in the dark and suffer an injury, then a reasonable man would have stopped and removed the rock from the road. X‘s conduct fell short of this, and X may therefore be liable for the injury to Y. Contributory negligence may apply here.

3. Would your decision in Question 2 be any different if: (a) X was unaware that the piece of rock had fallen from his truck? (b) Y was traveling along the road at a high rate of speed? (c) Y noticed the rock in her driving lane and swerved to the other side of the road to avoid it, thereby colliding with Z, who was traveling in the opposite direction? Answer: (1) If the truck was loaded and operated in the manner in which a reasonable man would load and operate, then probably no liability would rest on X‘s part. (2) If Y was traveling at a high rate of speed, he would also be negligent and partly at fault for his own injuries. (3) Y has a duty not to injure Z. A reasonable man would probably swerve to the shoulder of the road to avoid the rock. Y may be liable for Z‘s injuries by his actions. X may have some liability as well, however, since he may have contributed to the accident by his negligence.

4. Roger, a delivery driver with Golden Bakery, is driving a company van across town when he hits a pedestrian who stepped from the curb in order to cross the street. Describe how Golden Bakery might respond to a claim of vicarious liability. Answer: Roger may not be driving the van in the course of his employment, and thus vicarious liability will not apply. The pedestrian may be crossing the street illegally, either against a light or mid-street, and thus be liable for contributory negligence.

5. A factory stood near a self-storage facility, separated by a gravel parking lot owned entirely by the factory. In the summer of one year, the factory paved its parking lot. Late the following spring, heavy rains which formerly soaked into the gravel ran directly from the parking lot into the self-storage facility, causing hundreds of thousands of dollars in damage to goods of the unit tenants. Discuss the tort issues raised as result. Answer: The damages are not an Act of God, despite being caused by rain. The tort is negligence which has created a legal nuisance on the neighbouring property. A duty existed not to allow the escape of the nuisance, that duty has been breached in the occasion, and the occasion has caused damages to the neighbour. The occasion and damages are in fact quite foreseeable by the reasonable person, for which reason surveyors and engineers are a necessary part of commercial construction work, particularly for drainage in paving work. Damages awarded will be compensatory. An injunction against a repeat of the discharge of water is possible, though unlikely, as remedial work will preferably (and probably) be subject to a municipal property work-order.

6. Iron Engineering was engaged to design a bridge to be built by Gorge Construction. Upon internal review, one of Iron‘s design team caught a fatal error in the design, and drafted a plan amendment accordingly. The engineer placed the amended plan as ―version 2.0‖ in a second file, in front of the first in the file cabinet, as was the practice. A young file clerk, trying to be helpful, reorganized the cabinet, reversing the file order. Gorge Construction ultimately received version 1.0 of the plan and built the bridge, which collapsed soon after completion. Discuss the tort issues raised as a result.

Answer: Gorge Construction will be named in the resulting liability action, however, it should be able avoid liability as it was reliant on the work of the Iron Engineering experts in drafting the plans for the bridge. Iron Engineering has essentially no defence to a classic case of negligence, as control and release of revised plans are critical aspects to ensure public safety in resulting construction projects. Students should treat the standard aspects of duty, breach, damage and foreseeability.

Case Problems for Discussion Case 1 Angus, a bicycle courier, picked up an envelope at a law office. It was addressed to ―City Works, Office 1212, For attention of: Janet Bari, Re: #2650/06.‖ Angus put the letter in his bag, making it the sixth identical letter that he received for the same address while doing his afternoon rounds. He dropped the letters off at City Hall before the office closed, and headed home. The next morning he realized that one of the letters was still in his bag, stuck inside a fold in the nylon lining. Angus returned to City Hall, but delivery of the letter was refused. The reference 2650/06 was a call for bids on city construction work, and the competition for lowest bid closed when City Hall closed the day before. Identify the legal issues raised between Angus, the law office, and the presumably irate client on whose behalf the law firm had created the bid, and render a decision. Would it matter if the bid, in any event, would not have been the lowest? Answer: The issue of whether the bid would or would not have won is a matter that speaks to the extent of the damage, not whether negligence existed. Negligence exists where the standard elements of duty, breach, damage and foreseeability are present. The largest question is whether a duty existed for ―same-day‖ delivery. While this may be an assumed expectation in using a bicycle courier in a big city, it may not be a duty unless it is specifically treated in the terms of the service. If a duty exists, it was breached, for it was delivered out of time. Assuming that some damage has resulted, even if nominal, the question remains whether significant damages were foreseeable by the parties. Certainly the sender could see the consequences of failure of timely delivery. If these were not communicated to the courier Angus, how could Angus be aware of the liability he was undertaking. In short, the case would fall down to contributory negligence by the sender for not advising the courier of the significance of failure to deliver on time. In regard to the client, it will seek redress of its losses (if any) from the law firm.

Case 2 Basil, aged 14, lived in a large metropolitan city, but spent his summer vacations with his parents at a cottage in a remote wilderness area of the province. On his 14th birthday, his father presented him with a pellet rifle and provided him with instruction on the safe handling of the weapon. The father specified that the gun was only to be used at the cottage. Basil used the pellet rifle to rid the cottage of area rodents during his vacation. On their return to the city, Basil‘s father stored the weapon and the supply of pellets in his workshop closet. He warned Basil that he must not touch the rifle until the next summer, but did not lock the cabinet in which the weapon was stored. One day, when Basil was entertaining a few friends at his home, he mentioned his summer hunting activities. At the urging of his friends, he brought out the pellet gun for examination. Basil demonstrated the ease with which the magazine could be filled, and how the weapon operated. He then emptied the magazine and allowed his friends to handle it. The gun was returned to him and, as he was replacing it in the cabinet, the weapon discharged. He was unaware that a pellet had remained in the weapon, and that he had accidentally charged the gun when he handled it. The pellet struck one of his friends in the eye, and an action was brought against Basil and his parents for negligence. Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-46

Discuss the liability (if any) of Basil and his parents, and the defences (if any) that might be raised. Render a decision. Answer: This case is based in part on the facts in the case of Floyd et al. v. Bowers et al. (1978, 89 D.L.R. (3d) 559; affirmed, (1979) 27 O.R. (2d) 487. Class discussion of the case should deal not only with the question of liability of the youth Basil (see case # 1 for the standard applied) but also the question of liability of Basil‘s parents for their failure to instruct him in the safe handling of a potentially dangerous instrument, and their failure to safely store the weapon and/or its pellets. The limits of parental liability should be discussed: What would a ―reasonable parent‖ have done under similar circumstances? Was the accident foreseeable? Suppose the gun had been locked in the cabinet, but Basil had found the key and unlocked it. Would this fact have any effect on parental liability? In the case before the courts, the court held that the failure to control access to the gun represented negligence on the part of the parent in view of the fact that the gun was a dangerous weapon. Both the parents and child were held liable for the injury.

Case 3 Khalid lived in a residential area some distance from where he worked. One morning, he found himself late for work because his alarm clock had failed to wake him at the usual time. In his rush to leave his home, Khalid backed his automobile out of his garage after only a cursory backward glance to make certain the way was clear. He did not see a small child riding a tricycle along the sidewalk behind his car, and the two came into collision. The child was knocked from the tricycle by the impact and was injured. The child‘s mother, at the front door of her home (some 70 metres away), heard the child scream and saw the car back over the tricycle. She ran to the scene of the accident, picked up the child, and carried him home. Khalid called an ambulance, and the child was taken to the hospital and treated for a crushed leg. The mother brought a legal action against Khalid for damages resulting from the shock of seeing her child struck by Khalid‘s car. An action was also brought on behalf of the child for the injuries suffered. Discuss the validity of the claims in this case, and identify the issues and points of law that are raised by the actions of Khalid. How would you decide the case? Answer: This case involves two different claims for damages against Khalid: (1) A claim in negligence for the injuries suffered by the child. (2) A claim by the child‘s mother for the nervous shock suffered as a result of Smith‘s actions. Class discussion should be directed in such a way that the two claims are discussed separately to avoid confusing the two. This case provides an opportunity to once again re-enforce the concepts of foreseeability, duty of care, and the standard to be applied. Some of the points that should be raised include: Should Khalid have foreseen the likelihood of a small child being on the sidewalk? Was he aware of the existence of small children in the neighbourhood? Was a backward glance sufficient, or should Khalid have continued to watch Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw-Hill Limited Instructor‘s Manual 1-47