ABSTRACT
In 16888782 Ontario Inc v Maple Leaf Foods Inc the SCC changed the law governing recovery for pure economic loss caused by defective products or structures. It appears to 1) require the violation of the plaintiff’s recognized right to personal security or property and 2) even in the case of a violation of a recognized right to defer to contractual arrangements among the relevant parties. This brings the law in Canada into line with the law in the UK and USA. The decision is significant because it joins the court’s earlier misrepresentation decision in Deloitte & Touche v Livent in taking a rights-based approach to pure economic loss. It is also significant in that the court takes a formal approach to contractual terms and will not recognize a negligence duty in situations in which the plaintiffs could have protected themselves by contract. This was a 5-4 decision. The dissent did not adopt a rights-based approach and took a more realistic approach to the question of whether a franchisee could bargain effectively with a franchiser to protect its interests.
Feldthusen, Bruce, 16888782 Ontario Inc v Maple Leaf Foods Inc: The Secret Death of Winnipeg Condominium (January 12, 2021).
First posted 2021-01-18 08:00:21
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