Case information

Torts — Negligence — Duty of care — Pure economic loss — Civil procedure — Class actions — Can a product manufacturer be liable in negligence for pure economic loss when its product is only “dangerous” because it can cause economic, but not physical, harm — Does the “undertaking” test for proximity in Deloitte & Touche c. Livent Inc. (Receiver of), 2017 SCC 63, [2017] 2 S.C.R. 855 extend beyond negligent misrepresentation and service cases, to novel categories pure economic loss — Are Canadian regulatory approvals for a defendant’s conduct a relevant policy factor at either stage of the Anns/Cooper test.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicants sell types of corn seed (“Agrisure”) to North American corn growers which contain a genetically modified trait known as MIR 162. Although Agrisure has been approved by Canadian and American regulators, it was not approved in China until late 2014. The respondent is an Ontario corn grower who has neither purchased nor planted Agrisure. It alleges that since the North American corn industry is interconnected and interdependent, the traits of genetically modified seeds inevitably co mingle with other corn, rendering corn growers like itself vulnerable. When China rejected shipments of North American corn containing Agrisure, it caused a glut in the domestic corn supply and a drop in prices. The respondent commenced a proposed class action against the applicants, claiming negligence and breaches of the Competition Act, R.S.C. 1985, c. S.1 and seeking damages for economic loss.
The respondent claims the applicants were negligent in breaching their duties: a) undertaking not to commercialize Agrisure in North American prior to obtaining import approval from China; b) to prevent co mingling of the corn of Agrisure farmers and others; and c) not to mislead about the timing and substance of its application for import approval in China and its ability to prevent co mingling. The Ontario Superior Court of Justice granted the applicants’ motion for an order to strike the claims without leave to amend, pursuant to Rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and dismissed the respondent’s action. The Court of Appeal for Ontario allowed the appeal in part. It reaffirmed the motion judge’s dismissal of the claims of negligent misrepresentation and breach of the Competition Act, but held that the respondent’s claim for negligence in prematurely commercializing Agrisure should be allowed to proceed.