CHAPTER 10-12 INTENTIONAL TORTS Tort - a wrongful act that causes harm in civil law (e.g. accidental damage, spreading damaging lies) - torts are not part of contract law - some torts are also criminal offences ( e.g. tort of conversion is also the crime of theft) 2 types of torts: a) Intentional – the defendant meant to do it b) Unintentional – the defendant didn’t mean to do it, it was an accident (negligence) Vicarious liability - Companies are liable for injuries caused by their employees in the course of their work Intentional Torts: 1) False imprisonment - holding or confining a person against their will and no legal right to do so - stores must be careful if they force a suspected shoplifter to go to the managers’ office, it’s legal if the person did steal – but if a crime wasn’t committed, a person can sue store for false imprisonment - Sangha – falsely held in Home Depot awarded $4,000 general damages – Nichols – store not liable as partner had stolen –Yarmie v. Can. Tire $5,000 - stores cannot search a person, it can only take them to the managers’ office using reasonable force if they actually stole – it is only the police who can search people – Chopra – excessive force and racial remarks made in false imprisonment $38,000 damages - Chen tied up a man who had stolen from his store 1 hour earlier – Police charged Chen with assault and forcible confinement – Chen found not guilty and law changed to allow citizen arrest within a “reasonable time” after the offence committed 2) Trespass - is entry onto another’s land without permission or a legal right to (ex. police and fire dept.) – trespass is also a criminal offence - stores, bars etc. have the right to tell people to leave - you can use reasonable force to remove a trespasser, but should give them notice first to leave 3) Nuisance - intentional interference with someone’s use or enjoyment of their property (such as loud noise, bad smell, pollution, golf balls) – it must be a substantial and unreasonable interference - courts look at: nature of the area, severity & duration, sensitivity of the plaintiff, importance of activity - Remedies requested are usually an injunction to stop the nuisance and maybe damages too - there can be private and public nuisances – it is public nuisance if it happens on govn. owned land e.g. oil tanker sunk in St. Lawrence for 26 years cost $40 million to remove – private nuisance affects private land e.g. Antrim Truck – awarded $393,000 when highway redesigned and cut off access to restaurant - Sammut – house next to golf course, balls are a nuisance so ct. gives an injunction to stop the balls & course had to be redesigned - picketers in a strike can be a nuisance if they picket private residences or have aggressive behaviour 4) Assault and battery: - assault in tort law is the threat of physical harm - battery is intentional physical contact without consent Defences: a) self-defense in a fight can be a defense if you prove there was a genuine fear of injury and you struck the plaintiff for self-protection, but you can’t use excessive force b) provocation only can reduce damages, but it is not a complete defense c) consent can be a defence to a battery claim – you agreed to the physical contact - doctors must be careful to get patients’ consents for medical procedures or they can be liable for battery & significant damages - it must be an informed consent & they’re made aware of possible risks, if not, it is battery - consent can be a defence in sporting activities – but what level of violence do players consent to in a hockey game? - Moore v. Bertuzzi 2004 - $60 million lawsuit - settled in 2014 – vicious blind side hit - parents can spank kids for discipline – (but only an open hand, on butt, ages 2-12 and not in anger) 5) Intrusion upon Seclusion – no tort in Canada for invasion of privacy until this tort recognized in 2012 in Jones v. Tsige (ONCA) – 3 requirements: it is to intentionally intrude upon the private affairs of another and it’d be considered highly offensive to a reasonable person causing distress or anguish Tsige, a bank employee, repeatedly checked the bank records of her boyfriend’s ex-wife – must be a serious intrusion, not a frivolous claim and the upper range of damages is only $20,000 -Doe v. N.D. 2016 – revenge porn – girl breaks up with boy and he wants revenge so he puts sex video she had made for him on a porn website & shows his friends – she sues him for intrusion upon seclusion and breach of confidential information – she gets $50,000 non-pecuniary, $25,000 aggravated dam., and $50,000 punitive plus $41,000 legal costs and ct. says it be even more in other cases as similar impact to a sexual assault case 6) Defamation - a lie that damages the reputation of a person or a company 2 types: Slander- the lie was a spoken statement and there is no permanent record of it Libel - the lie was written down or recorded - the defendants are often the media Ex: TV, radio, newspaper, publishing companies - Leenen & Myers v. CBC –2001 - CBC paid $2million to 2 Sunnybrook doctors for libelous 5th Estate show - no cap on non-pecuniary damages in defamation though in most cases awards are under $30,000 ( only 6-7 reported cases in most years) - when defamatory remarks are made on the internet the ISP is not liable, but it may be forced to shut down the site and reveal the name of the person who posted it– defamatory posts on web sites can be libel ex. Butler $450,000 lies on mining stocks, Halstead B.C. woman cyber bullied teachers and trustee and was liable for libel for $676,000 - Crookes – posting a defamatory hyperlink is not libel but could be if you add comments to tell others to read it Defences for Defamation: a) The truth – a defendant can make statements that destroy a reputation if they are true b) Innocent Dissemination - bookstores and libraries not liable for libel if they sell / loan books that have lies - they use innocent dissemination defense, but writer & the publishing company can be sued c) Absolute Privilege - when people testify at a trial or politicians speak in parliament they can’t be sued for defamation– they have absolute privilege and can’t be sued even if they lie d) Qualified Privilege - a person with a duty or right to make a legitimate evaluation or complaint can’t be sued if there is a reasonable basis for it e.g. employer said worker not great, or client thinks accountant was negligent- but if it is done with malice (an evil intent) and no valid reason, then they are liable e) Fair Comment Defence - comments or opinions of public concern (often on politics and art) may not be libelous so long as “a fair person could honestly express that opinion” -WIC Radio 2008 SCC – shock jock comparing homophobe to Nazis and KKK is a fair comment f) Public Interest Responsible Communication Defence – SCC 2009 – defence that a party can use if they did their due diligence & tried to confirm that their public interest story was true, if only a small part is false and most is true, then they can use this defence 7) Injurious Falsehood – product defamation or trade slander - a lie that damages the reputation of a product or service – Bell tried to claim Rogers ads were lies & injurious falsehood – ct. disagreed - people can protest bad products so long as they don’t trespass, not a nuisance & statements are true 8) Deceit – lies that cause economic losses, it is called fraud in criminal law e.g. XY v. Zhu – co. lied about its sales to avoid paying royalties 9) Passing Off - Passing off someone else’s work/goods as your own - Ex: fake Rolex, Louis Vuitton - plaintiff sues the one with the fake copies and must prove three things: a) the names are similar b) it confuses the public c) it causes economic losses - if plaintiff wins they could get pecuniary and often punitive damages and an Anton Piller order (surprise search warrant), an injunction to stop future sales of the fakes and a deliver up order forcing the defendant to give up all the fake copies to the plaintiff and an accounting of profits the copier made 10) Inducing breach of contract - A has a contract with B, then C induces A (usually gives $) to break the contract, (usually so that A can make a contract with C) - B can sue A for breach of contract and B can sue C for the tort of inducing breach of contract e.g. A – Getty Oil - offered to sell 1 billion barrels of oil for $3.4 billion to Penzoil B - Penzoil - contracted with Getty Oil to buy the oil C – Texaco – then told Getty to break contract with Penzoil and Texaco paid Getty $3.87 billion for the oil and promised to pay all Getty’s legal liability - Texaco knew it would be sued for inducing the breach, but it expected damages to be $1 billion, instead damages were $11 billion due to a crazy Texas jury, they settled out of ct. for $3 billion. 11) Misuse or Breach of Confidential Information & Inducing Breach of Confidential Information - If a worker leaves company A for a competitor, company B, and takes key secret/confidential information from company A, then company A can sue the worker for the tort of breach of confidential information and company A can also sue company B for the other tort of inducing breach of confidential information if B induced/paid worker to take the info.– p. 100 Lopez v. GM– VP of GM quit and went to VW and both were sued by GM for taking key info. for $5 billion, settled out of court - XY v. Zhu – co. had taken the secret technology and was using it in China despite their agreement not to and also lied about sales to avoid paying royalties - Lac v. Corona – large mining co. breached the confidential info. it was given and bought land worth $1 billion in gold – 1989 SCC forced large co. to give up the mine due to this breach - Note: if a worker has many clients and goes to a new firm, the worker can tell the clients of their new location once, but can’t continually actively solicit their old clients nor can they take company information with them 12) Intentional interference with Economic Relations: if C knows there is an existing business relationship between A and B and C intentionally interferes with the relationship by using unlawful means (e.g. C offers A a bribe or kickback) and this causes economic losses to B, then C and A can be sued for this tort by B - Sagaz – kickback scheme designed to cut out one supplier – injured supplier sued and won $2 million lost profits and $50,000 punitive damages - Valcom- co. intentionally lied to get woman & her co. removed from military contracts so was liable for this tort and $700,000 in damages NEGLIGENCE 1) NEGLIGENCE – unintentional careless conduct that results in reasonably foreseeable damages 4 CONSIDERATIONS IN A NEGLIGENCE ACTION: a) Duty of care - you owe a duty of care to your “neighbour” - in law your neighbour is anyone you should reasonably foresee can be affected by your actions. - Donoghue v. Stevenson 1932 UK– this case set the duty of care principle, a woman found a dead snail in her ginger beer - this case established manufacturers’ liability for defective or dangerous products - there has been an expansion of the duty of care e.g. police sued by victims of crime or wrongfully convicted, drs. sued if their patients cause injuries (mentally ill or driving), govn. inspectors (building, agriculture, road problems) - it is two stage test: 1) Is there a close enough relationship to impose the duty? 2) Are there any policy reason to limit or refuse to impose the duty? (the Anns test) – b) Standard of Care - How much care do you have to take? The amount of care that a reasonable person with the same skills in the same circumstance would use - it is the amount of care of a careful, cautious person not just an average person though c) Causation - plaintiff must prove that the defendant actually caused the damages - the “but for” test – “but for” the defendant’s negligence the plaintiff would have no damages - beware of circumstantial evidence that seems to point to one conclusion - Fontaine 1998 SCC - two dead men in a truck off a mt. road, does not mean the driver was negligent if there is no other evidence available – Michel – rock flew off a truck - beware of “junk science” that finds a causal link and holds big cos. liable for their products to the customers because the jury feels sorry for them, and it turns out the product didn’t cause the injuries - e.g. breast implant case - $4.5 billion paid by Dow d) Remoteness of Damages - courts will only hold a defendant liable for damages that are reasonably foreseeable - if they are too remote or too far down the chain of events the defendant is not liable for those damages even if they caused them - the defendant must be the proximate cause of the damages - Mustapha – SCC 2008 – man finds dead fly in water bottle and has severe psychological problems – SCC said his damages were not reasonably foreseeable so co. not liable Two Defenses in Negligence: 1) Contributory negligence - the plaintiff themselves is partially responsible for their own injuries e.g. seatbelts not used can reduce the plaintiff’s damages by 15-25%, if you can prove that using the belt would have lessened or prevented the injury. -it is done on a percentage basis: e.g. Kahlon – drs. negligent but patient 30% liable as he hadn’t followed up on diagnostic tests - Holton: 3 guys drink at 2 bars in Whistler and get drunk – one drives and causes accident and passenger Holton is injured– 2 bars each 15% liable, driver 40%, Holton 30% - Buehl – drunk doctor at hotel falls from room with missing balcony – hotel 35% liable doctor 65% -2Ch.4 2) Voluntary assumption of risk - the plaintiff voluntarily assumed ALL (100%) of the risks involved in the activity and the plaintiff is totally responsible for their own damages or injuries - defendant argues the plaintiff knew it was a very risky activity and chose to do it so the plaintiff is 100% liable and defendant is 0% liable – usually the defendant had a waiver/disclaimer - frequently used in dangerous high risk sports activities, companies often make participants read and sign a waiver or disclaimer that says the plaintiff understands it is dangerous and they can’t sue the company if they get injured as they assume all the risk of injury or even death - sometimes waivers work for cos. even if the participant hurt or dies - Dyck (snowmobiling), - sometimes waivers don’t work for the co. e.g. – in Crocker a drunk at a tube race could sue ski resort even though he signed a waiver - often hard to predict the result -to work the company must clearly bring it to the attention of the person and provide proper facilities and instructions to participants - if the waiver is not clearly worded or there is misrepresentation by the co. the waiver will not work - courts tend to say if you get in a car with a drunk driver and are injured, it is contributory negligence (15-50%) rather than voluntary assumption of risk 2 Important Areas of Negligence: 1. Occupier’s Liability 2. Manufacturer’s Negligence 1. Occupier’s Liability: If you own or occupy land then you have a duty to take reasonable care to keep the property reasonably safe for people who come on it e.g. repair broken steps or clear snow & ice - stores need to clean up spills so no slip & fall accidents (install cameras to catch fake claims though) - even a duty owed to trespassers to make sure they are not recklessly harmed - –CP liable to motorcyclist as unsafe train crossing - but still must prove the defendant was negligent - businesses may be liable to customers who are attacked by other customers- McGinty, but only if they had failed to take reasonable care Occupier’s Liability for Hosts that Serve Alcohol to Others – 3 different host situations exist with different standards of care in each situation - the liability of the hosts (people or companies) for the safety of people who drink on their premises and then drive and injure themselves and/or others on the road falls under occupiers liability a) Commercial Host Liability – the liability of a bar, restaurant etc. to their customers and others - since bars make money selling alcohol there is a very high duty of care on them- they meet a reasonable standard of care if the drunk leaves with a sober adult or if they promise to take a taxi - bars often liable for 15-30% of damages if drunk customer is injured and/or injures others e.g. Hague v. Billings driver 85% bar 15% - McIntyre v. Grigg 2006- driver 70%, McMaster pub 30% $250,000 plus $20,000 punitive dam.- Stewart v. Pettie 1995 SCC- bar not liable when drunk men left with sober wives and later crash b) Business Host Liability - duty of a company to its employees at a company party when alcohol is served- a high duty of care on the company because company has a lot of control over an employee & has a duty to protect them – one case tried to rule co. must force them into a taxi or hotel, but it was a mistrial – use bartender, serve food, no last call, free taxi rides or hotel rooms, early emails stating no one drives home if drinking c) Social Host Liability – the liability of a person who has a house party and has their friends over and they drink and then the friend leaves drunk and injures themselves or others – Zoe Childs 2006 SCC ruled that a social host is not liable if their guests leave drunk and cause injury to others as people are responsible for their own actions – but this was a BYOB party and the hosts had provided no alcohol to the drunk driver – there is still a very small opening that could find a social host liable if the host provided the alcohol, knew the person was very drunk and did nothing to prevent them from driving – to keep home insurance rates down the SCC doesn’t really want to find social hosts liable but it could happen if the facts were different than the Zoe Childs case - Prevost 2001 B.C.– parents liable when their young teen had a party and an underage drinker drove home drunk and injured a young passenger – parents should have protected underage drinkers at their home 2. Products / Manufacturers Negligence: Plaintiff sues because a product has injured them or caused losses -there are 3 general areas: a) Negligence in the manufacturing process – normally the product was fine, but something went wrong in the manufacturing plant at a certain time e.g. snail in ginger be b) Negligent design - bad design of the product e.g. auto manufacturers put gas tanks in the wrong spot and vehicles had fires - Resch – bad bicycle design- More v. Nike – hockey helmet not negligently designed c) Inadequate warnings for dangerous products – Hutton v. GM inadequate notice of defective air bags Professional Negligence: involving accountants, doctors, lawyers, engineers etc. - they still follow the four negligence considerations – but the duty of care is more restricted in cases of pure economic loss $ than when there is personal injury or property damage - the extent of the duty of care is restricted to people who paid for the services or were in a special or close relationship with the professional so they knew that they were relied upon for that specific purpos Duty of Care of Accountants: Hercules Management v. Ernst and Young, 1997 SCC - a major case that had a huge impact on the liability of accounting firms for negligence - in the 80’s & 90’s courts constantly found large accounting firms liable when companies went bankrupt - investors said they had relied on the bad fin. statements, so the accountants were held liable - in Hercules Management, financial statements were prepared by Ernst and Young for the company’s annual general meeting (AGM ) and they were inaccurate - investors who bought shares in Hercules, said the bad AGM fin. statements misled them, so the accountants should be liable for their losses - BUT SCC in Hercules said accountants only owe a duty of care to people who specifically ask or request particular information or used it for the specific purpose it was meant for; there must be a close proximate relationship between the accountant and the client for a duty of care to exist -SCC said the financial statements were for the AGM, not for investment purposes, so shareholders lost - SCC in the Hercules case greatly limited the extent or scope of accountant’s liability - SCC felt courts had gone too far & accountants were becoming almost liable for unlimited amounts of money to an unlimited number of people & big acct. firms would go bankrupt so this had to be stopped - investors dislike this Hercules case very much 2. Standard of Care of Professionals: What would a reasonably competent professional with the same skills do in the same circumstances? - they do not expect professionals to be perfect, but it is a high standard - if the professional follows standard industry procedures, they might not be liable – p.146 Cavan – nurse not liable for negligence despite major injury to patient as she followed standard practices - but in other cases the professional can be liable if they followed the standard practice if the court feels the standards are not good enough e.g. Kripps 1997 BCCA – accountant liable for not disclosing mortgage defaults even though GAAP didn’t require it Exemption and Disclaimer Clauses - companies have disclaimer clauses that state, “we will not be liable for any losses you may incur, so you can’t sue us for negligence” - doctors, lawyers, dentists, engineers can’t use the clauses – they buy malpractice insurance to protect themselves though – in some provinces, accountants can legally use disclaimers - bankers, stockbrokers, financial planners, real estate agents can use these clauses but only sometimes - courts are very inconsistent with disclaimers, the clauses may or may not work – it is hard to predict - Wolverine Tube –disclaimer worked even though enviro. co. said site was fine & it wasn’t - Micron – bank liable for false statements despite disclaimer as there was reasonable reliance - judges play games and make exceptions to get the result they want - court often asks in consumer cases (person vs. company), did the person get adequate notice and understand this clause? If there is any doubt the clause probably won’t work and the company is liable - if it is a disclaimer clause between two companies though often the courts uphold the clause and say it works because the courts think that companies should read these clauses and be held to them Auditors’ Liability - Hercules greatly limited when accounting firms could be held liable for negligence & shareholders very frustrated – some cases recently have had some success e.g. Wightman where they proved the reliance on the false statements and acct. firm liable for $1 billion and Livent where accts. held liable to co. not shareholders when sued by bankruptcy receiver -other cases Nortel and Sino-Forest the accounting firms agreed to settle the negligence cases for millions Fiduciary Duty - sometimes there is a higher duty of care, a fiduciary duty, on professionals, if the client they are dealing with is very trusting and vulnerable and depends heavily on the professional - a fiduciary duty is a duty of utmost or maximum care and good faith and the professional must put the clients’ interests first and protect them e.g. lawyer or broker to a rich older naïve client -breaches of fiduciary duty can include misuse of confidential information – professional uses the client’s confidential information for their own benefit/profit – ex. real estate agent buys land to resell to their client at a huge profit - secret commissions or profits, kickbacks client not told of - Strother – lawyer acted for competing firms and had an interest in one and never disclosed it Tax Fraud Rules - Beware - if an accountant assists a client to commit a tax fraud or tax evasion; accountants can be charged criminally and be 100% liable for the gross amount of the fraud - if an accountant prepares documents to support a false claim (ex. 2 sets of books) the accountant can be liable for up to 50% of the amount awarded in civil courts - 2011-2012 - 137 convictions for tax evasion or fraud in Can., 35 people jailed, fines $6.4 million
