Historically, plaintiffs seeking damages for pure economic loss have faced multiple challenges from defendants, as well as skepticism from the Courts. Over the last year, plaintiffs in two prospective class actions have pursued these damages with differing success. The decisions in each of these cases are important to the jurisprudence in Canada, emphasizing that categories for claims for pure economic loss while not closed, are fact driven, and that a finding of proximity is key. These cases could have important implications on the success of future class proceedings.
Notwithstanding the different analyses undertaken by the Courts in each of these cases (the most recent and the topic of this commentary being 1688782 Ontario Inc. v. Maple Leaf Foods Inc. et al., 2020 SCC 35 (CanLII) https://canlii.ca/t/jbg4h (“Maple Leaf”) and Darmar Farms Inc. v. Syngenta Canada Inc., 2019 ONCA 789 (CanLII) https://canlii.ca/t/j2pp1 (leave to appeal to the SCC dismissed) (“Syngenta”)) and, in particular the differing scrutiny undertaken by the majority and dissent in Maple Leaf, proximity continues to be the defining factor in determining the viability of a claim for pure economic loss.
The history of pure economic loss claims in Canada began in the early 1990s. Following the common law trend in the UK, the SCC released two decisions that recognized damages for pure economic loss in Canada. In Canadian National Railway Co. v. Norsk Pacific Steamship Co., [1992] 1 S.C.R. 1021 and Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., [1995] 1 S.C.R. 85, five recognized categories of pure economic loss were explicitly set out as being applicable in Canada:
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