McLachlin

McLachlin: The place of Equity and Equitable Doctrines //Contract//: concerned with protecting expectation interests of parties pursuant to agreements. Compensation= aimed to place plaintiff in situation he/she would have been in had tort not been committed. //Equity//: more difficult to summarize. Serves as a supplement to CML. Equity as a “gloss” to the common law. It finds its origins in notion that where there is a wrong, law should afford a remedy. 1. Because as society changes, there are new situations where redress is required but no remedy exists in tort, contract, or statute. Constructive trust as a remedy to spouses is illustrative. Rethinking of rules around partition of property in marriage. -Use of equity in 6 different areas as a means of injecting flexibility into our system of legal redress for civil wrongs: [there are only 2 in this reading] - extended to cases where transaction is unfair. -If the parties are determining obligation, why is this not just dealt with in contract? Conflict between privately and publicly determined duties was not difficult as long as public obligation was restricted to fraud. But fiduciary duties being stipulated in courts complicate matters. - Canadian courts are using notion of contextualizing fiduciary duty as a device to confine it to appropriate cases. - sense that policy considerations behind liability for breach of fiduciary duty are sufficiently unique and distinguishable from liability in tort: when faced with a question for damages in fiduciary obligation, must proceed from equitable principles.
 * Tort and equitable remedies: body of rules governing recovery for civil wrongs.
 * In the latter half of the 20th century, scholars and courts discussed an expanded role for equity. Lord Denning proponent for old, but new role for equity: “if a common law action is in danger of doing injustice, then equity will be called in to remedy it.”
 * Very popular idea in Canada. Canadian jurists have gone far to recognize new equitable causes of action. Why is this?
 * Equity allows promise of resolving age-old tension. But law must be predictable so that people can arrange their affairs in an orderly fashion.
 * 1. Fiduciary Obligation in Commercial Dealings**:
 * Courts have introduced a new standard of morality. Criminal Code includes fraud as a general offense. On civil front, courts have made it easier for victims to claim damages in cases of commercial dishonesty. LAC Minerals Ltd.: LaForest “it is simply not the case that business and accepted morality are mutually exclusive domains.”
 * LAC is important. Since LAC, courts have been willing to find fiduciary duties of fair dealing in a wide variety of commercial cases.
 * Canadian Aero Service v. O’Malley: defendants were officers of Canaero during negotiations between C and Guyanese and Canadian governments over mapping photography of areas within Guyana. Before settlement, directors of C left to start a new company and bid for contracts with gov’t. C sued. SCC agreed.
 * In Houle, Court ruled that there was a general duty of good faith on parties to a commercial relationship. The same duty of good faith has been applied on the ground in one province.
 * Courts here are imposing an objectively determined general duty imposed by law on obligations which the parties have fixed by their undertakings.
 * Real risk that parties cannot predict in advance what their rights and remedies may be if things go wrong. Raises question of whether these developments are good or bad for business.
 * 4. Special Relationships**
 * Expansion: 1. extended to non-economic interests to provide personal remedies. 2. extended to persons who have not been thought of as trustees in the past.
 * Fiduciary: Generally related to property. In Norberg, SCC held that physician has a fiduciary duty toward patient. Parent-child relationships are fiduciary.
 * Canson Enterprises Ltd. v. Boughton & Co.: illustrates problems which may arise where concurrent actions arise in equity and tort. Solicitor [fiduciary] acted as both purchaser and vendor and failed to specify that a middle party was flipping the property as a substantial mark-up. Plaintiff was unable to recover full losses.
 * Court did not take plaintiff’s argument for unlimited recovery. LaForest rejected submission that compensation should be calculated in the same manner as a trust.
 * McLachlin’s take on this: approached case from standpoint of equity. This begs the question of whether there are different policy considerations. Tort starts from the assumption that parties act in their own self-interest; this is not true of fiduciary relationships.
 * How do approaches in equity and tort compare?
 * Measure of damages is similar in tort and breach of fiduciary duty in that foreseeability is not a requirement, but a causal link is. In negligence, it is not about limiting unduly freedom of action of defendants. In an intentional tort such as deceit or breach of fiduciary duty, we can foresee specific harms.