Cooper+v.+Hobart


 * (Credit freely given to Dorian Needham-- large swaths borrowed from his summary. Hence reference to Smith, though it's interesting so I left it in)**

__**Facts:**__ Investors sue for recovery of loss after their investments were mismanaged by a broker already under scrutiny.


 * __Issue:__** does statutory regulator owe a private law duty of care to private investors for alleged negligence in failing to properly oversee conduct of an investment company that it licenses?

· Question is whether law of negligence should be extended to this situation; a gloss on //Donoghue v. Stevenson// · //Anns// test does not involve duplication just because policy is considered at both stages; must be clear about what is considered in each step · To find //prima facie// duty of care in step 1, must be reasonable foreseeability of harm plus something more: proximity, based on factors arising from plaintiff/defendant relationship, which factors include policy in the broad sense (La Forest actually had talked previously about policy in the first step) · Proximity usually used to characterise the type of relationship in which duty of care may arise; usually identified through categories · Defining relationship may require looking at expectations, representations, reliance, and property or other interests involved · Must consider whether it is just and fair to impose duty of care in law on the defendant · Requirements of proximity are diverse and depend on circumstances of the case; they relate to the relationship between the parties (can include things like reasonable reliance, whether information was used for its intended purpose, etc.) · Categories where proximity is recognised: foreseeable physical harm; negligent misstatement; duty to warm; etc. · Residual policy considerations [Capital “P” policy] are considered here – not concerned with relationship between the parties, but the effect of recognising a duty of care on other legal obligations, legal system, and society more generally · Must distinguish here between government policy (no duty of care) and execution of policy (duty of care) · These factors will rarely be relevant · Second step arises only in cases where duty of care doesn’t fall within a recognised category (if it is a novel case)
 * __Holding__** (McLachlin, for the Court): NO
 * 1. Step 1**
 * 2. Step 2**

· This case doesn’t fall within, and isn’t analogous to, existing category · To recognise new duty of care, must show foreseeability and proximity; proximity can only arise from the statute under which H was appointed (the only source of his duties) – but not here: duty is to public as a whole, not to particular investors · Registrar must balance myriad competing interests; his duty is to the public as a whole à might have foreseen losses to investors, but there was insufficient proximity to ground a duty of care, which would come at the expense of other interests · Need not proceed to //Anns// step 2 – but useful to comment on it · Even if a //prima facie// duty of care had been recognised, would have been negated by policy · Registrar must balance public/private interests; decisions are quasi-judicial (inconsistent with duty of care to private investors); spectre of indeterminate liability; impact on taxpayers
 * 3. Application**

· **//Anns//** **step 1: to find //prima facie// duty of care, must be (a) reasonable foreseeability of harm + (b) proximity (usually identified through categories; factors are diverse and depend on circumstances of the case; policy considerations here about the relationship between the parties, determining whether to recognise proximity, and whether to negative proximity)** · **//Anns//** **step 2: residual policy considerations (based on effects on other legal obligations, legal system, and society); only considered where duty of care doesn’t fall in recognised category**
 * __Ratio__**

· This is an atrociously sloppy judgment: McLachlin wrongly asserts that //Donoghue v. Stevenson// replaced the other torts (it didn’t); she says that Atkin supported keeping categories of negligence open (it was Macmillan) · Smith: unclear what McLachlin means when she says we only go through step 2 for novel cases; if there is no precedent, how to determine whether the case is novel? She was worried that there was an even longer explanation of the //Anns// test, and that lower courts wouldn’t know what to do à tried to simplify the test for them by removing steps · A little confusing, because McLachlin had previously used “proximity” to refer to the whole of the first step · Formally, the test hasn’t changed – but the policy considerations in step 2 are undermined by McLachlin saying they’ll rarely be relevant, and other policy considerations are moved to step 1 · So: you don’t succeed as La Forest suggested in //Hercules// just by showing reasonable foreseeability + loss; now **a little more difficult to prove the //prima facie// duty of care** · No question that **the court is pulling back generally from their pro-plaintiff approach**, even if the questions asked are the same · Smith: the //Anns// test is completely irrelevant in this case, as the question is just whether the statute intends to allow plaintiffs to succeed in these cases · The first-stage policy considerations can effectively trump step 2 (e.g., if you find that information was used for the purpose intended, there won’t be indeterminate liability, so you don’t need step 2) McLachlin may be using the categories approach in step 1b, despite that she prescribes a general test
 * __Notes__**