Lack of "imminent risk" does not bar recovery for
economic loss arising from a dangerously defective structure, the
Alberta Court of Appeal recently held. Typically, courts are
reluctant to award lost profits or other economic damages in a
negligence or other tort case unless those damages are causally
consequent on an injury to a person or property. Thus recovery for
"pure economic loss", as these damages are known, is
generally limited to certain recognized categories of cases. One
such category is the negligent supply of defective products or
structures that are dangerous. In Winnipeg Condominium Corporation No
36 v Bird Construction Co,
 1 SCR 85 [Winnipeg Condo], the Supreme Court of
Canada indicated that recovery of pure economic loss in cases of
this nature requires the presence of a defect that poses a
"real and substantial danger" to the occupants of the
building. In Vargo v. Hughes, 2013 ABCA 96
[Vargo], the Alberta Court of Appeal considered whether
recovery in such cases necessitates that the risk of harm be
classified as "imminent" and decided, contrary to its
previous indication, that imminence of harm is not required for
recovery in cases of dangerous defects.
At trial (2011 ABQB 649),
Hawco J. allowed an action in negligence against a builder for pure
economic loss suffered by subsequent purchasers of a house as a
result of the builder's negligent construction that had
resulted in dangerous defects. On appeal, the Court of Appeal
affirmed Hawco J.'s finding of negligence against the builder
and his rejection of an imminence requirement proffered by the
builder based on an earlier non-binding statement by the Court of
Appeal in Blacklaws v Morrow, 2000 ABCA 175
[Blacklaws]. In Blacklaws, the majority of the
Court stated in passing that Winnipeg Condo required
"physical harm to the plaintiffs or their chattels, or
imminent risk of it". In rejecting an imminence requirement,
the Court in Vargo reasoned that the policy justifications
given in Winnipeg Condo for allowing subsequent purchasers
to recover the cost of repairing dangerous defects would not be
served by imposing such a requirement. The policy justifications
given in Winnipeg Condo were: 1) to encourage subsequent
owners to take preventative steps before physical damage to persons
or property results; and 2) to encourage the timely repair of
defects before the occurrence of damage, when costs of repair tend
to be lower. To the extent that Blacklaws suggested that
the risk must always be imminent, the Court in Vargo
disagreed, and noted that a similar result was reached by appellate
courts in Ontario and Saskatchewan.
Finally, the Court of Appeal reiterated that an employer is
generally not vicariously liable for the negligent actions of an
independent contractor (based on the Supreme Court of Canada's
decision in 671122 Ontario Ltd v. Sagaz
Industries Canada Inc, 2001 SCC 59). The Court of
Appeal held that the builder was an independent contractor rather
than an employee of the original home owner, and as a result,
allowed the original owner's appeal from the trial judge's
determination of negligence, which had been based on a finding of
vicarious liability for the builder's actions.
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In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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