0790482 B.C. Ltd. v. KBK No. 11 Ventures Ltd.
Page 14
[30]
Under the Anns/Cooper framework, a prima facie duty of care is
established by the conjunction of proximity of relationship and foreseeability
of injury. As this Court affirmed, “foreseeability alone” is insufficient to ground
the existence of a duty of care. Rather, a duty arises only where a
relationship of “proximity” obtains (Cooper, at paras. 22 and 30-32; see
also Livent, at para. 23). Whether a proximate relationship exists between
two parties at large, or inheres only for particular purposes or in relation to
particular actions, will depend on the nature of the relationships at issue
(Livent, at para. 27). It may also depend on the nature of the particular kind of
pure economic loss alleged.
[31]
A party may seek “to base a finding of proximity upon a previously
established or analogous category” (Livent, at para. 28). But where no
established proximate relationship can be identified, courts must undertake a
full proximity analysis in order to determine whether the close and
direct relationship ⸺ which this Court has repeatedly affirmed to be the
hallmark of the common law duty of care ⸺ exists in the circumstances of the
case (ibid., at para. 29; Saadati, at para. 24; Cooper, at para. 32).
[32]
In cases of negligent misrepresentation or performance of a service,
two factors are determinative of whether proximity is established: the
defendant’s undertaking, and the plaintiff’s reliance (Livent, at para. 30).
Specifically, “[w]here the defendant undertakes to provide a representation or
service in circumstances that invite the plaintiff’s reasonable reliance, the
defendant becomes obligated to take reasonable care”, and “the plaintiff has
a right to rely on the defendant’s undertaking to do so” (ibid.). “These
corollary rights and obligations”, the Court added, “create a relationship of
proximity” (ibid.). In other words, the proximate relationship is formed when
the defendant undertakes responsibility which invites reasonable and
detrimental reliance by the plaintiff upon the defendant for that purpose
(P. Benson, “Should White v Jones Represent Canadian Law: A Return to
First Principles”, in J. W. Neyers, E. Chamberlain and S. G. A. Pitel,
eds., Emerging Issues in Tort Law (2007), 141, at p. 166).
[33]
Taking Cooper and Livent together, then, this Court has emphasized
the requirement of proximity within the duty analysis, and has tied that
requirement in cases of negligent misrepresentation or performance of a
service to the defendant’s undertaking of responsibility and its inducement of
reasonable and detrimental reliance in the plaintiff. Framing the analysis in
this manner also illuminates the legal interest being protected and, therefore,
the right sought to be vindicated by such claims. When a defendant
undertakes to represent a state of affairs or to otherwise do something, it
assumes the task of doing so reasonably, thereby manifesting an intention to
induce the plaintiff’s reliance upon the defendant’s exercise of reasonable
care in carrying out the task. And where the inducement has that intended
effect ⸺ that is, where the plaintiff reasonably relies, it alters its position,
possibly foregoing alternative and more beneficial courses of action that were
available at the time of the inducement. That is, the plaintiff may show that
the defendant’s inducement caused the plaintiff to relinquish its pre-reliance
position and suffer economic detriment as a consequence.
[34]
In other words, it is the intended effect of the defendant’s undertaking
upon the plaintiff’s autonomy that brings the defendant into a relationship of
