Documentation:Torts/Negligence Shoddy Goods Structures

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Negligent supply of shoddy goods or structures

Negligent supply of shoddy goods or structures is one of three categories of negligence actions for pure economic loss that have been recognized by Canadian courts (alongside negligent misrepresentation and negligence causing relational economic loss).[1] It remedies economic loss suffered by a plaintiff in restoring a dangerously defective product supplied by the defendant to a safe state.[2][3] This category of negligence arises when the shoddy good or structure causes the plaintiff pure economic loss, but has not (yet) caused physical harm to the plaintiff's person or property.[4][5]

The Supreme Court of Canada has held that the shoddy good must be dangerous for the plaintiff to succeed in a claim under this category of negligence.[6] If the good or structure is shoddy, but not dangerous, the plaintiff will be restricted to a claim under contract law or statute.[6][7]

Defining negligent supply of shoddy goods or structures

The Supreme Court of Canada in 1688782 Ontario Inc. v. Maple Leaf Foods Inc. affirmed negligent supply of shoddy goods or structures as a category of negligence.[1] As with any action in negligence, a defendant's liability is premised on whether they owed the plaintiff a duty of care, which hinges on a relationship of proximity, amongst other factors.[1] The Court held that the scope of recovery under this category is limited to redressing the costs to the plaintiff in discarding of the danger or restoring the dangerously defective item to a non-dangerous state.[3]

Differentiating between negligent supply of harmful products and negligent supply of shoddy goods or structures

Unlike product liability cases, which concern the negligent supply of products that cause injury to a person or property, the negligent supply of shoddy goods category is engaged when a plaintiff suffers only pure economic loss.[4][5] The Supreme Court of Canada distinguished between these two types of damage in Maple Leaf Foods., stating that:[4]

Pure economic loss is economic loss that is unconnected to a physical or mental injury to the plaintiff’s person, or to physical damage to property... It is distinct, therefore, from consequential economic loss, being economic loss that results from damage to the plaintiff’s rights, such as wage losses or costs of care incurred by someone physically or mentally injured, or the value of lost production caused by damage to machinery, or lost sales caused by damage to delivery vehicles.

Development of negligent supply of shoddy goods or structures in Canadian common law

Two high rise glass condominium buildings in the background with a short, tan Hampton Inn building in the forefront.
The Winnipeg Condominium judgment involved a condo building with defective cladding due to negligence by the defendant contractor which posed substantial danger to the inhabitants of the condo.[8]

Origins in Winnipeg Condominium

In the watershed case of Winnipeg Condominium Corp. No. 36 v. Bird Construction Co., the Supreme Court of Canada departed from the English common law by recognizing defendant liability under negligence for the supply of shoddy goods or structures beyond situations where the shoddy good/structure has caused injury to the plaintiff's property or person.[9] The Court clarified that recovery for pure economic loss is not dictated by the terms of the original contract between the defendant and the third party, but rather by basic standards of reasonable safety and principles of negligence.[10] In demarcating the scope of recovery for negligent supply of shoddy goods or structures, the La Forest J stated that:[10]

The duty in contract with respect to materials and workmanship flows from the terms of the contract between the contractor and home owner. By contrast, the duty in tort with respect to materials and workmanship flows from the contractor’s duty to ensure that the building meets a reasonable and safe standard of construction. For my part, I have little difficulty in accepting a distinction between these duties. The duty in tort extends only to reasonable standards of safe construction and the bounds of that duty are not defined by reference to the original contract. Certainly, for example, a contractor who enters into a contract with the original home owner for the use of high-grade materials or special ornamental features in the construction of the building will not be held liable to subsequent purchasers if the building does not meet these special contractual standards. However, such a contract cannot absolve the contractor from the duty in tort to subsequent owners to construct the building according to reasonable standards.

The Court went on to explain the logic and policy behind allowing plaintiffs to recover for the cost of repairing shoddy goods or structures to a non-dangerous state.[11] First, if a contractor can be held liable for situations where a dangerous structure or good causes damage to the plaintiff's person or property, it logically follows that they should be held liable in situations where such a defect is discovered and pre-emptively repaired to mitigate such danger and protect the plaintiff's bodily and proprietary interests.[12] Second, recognizing such a duty of care would have positive policy implications insofar as it would encourage plaintiffs to move quickly to mitigate the potential for the defective product/structure to cause injury.[13] Alternatively, failing to recognize a duty of care would encourage owners of the defective product to wait until it causes injury so that they would then be able to recover damages under law, rather than promoting socially responsible behaviour.[13]

The Court in Winnipeg Condominium did not address the question of whether a defendant can be held liable to the plaintiff for the cost of repairing non-dangerous defective products under negligence law.[14]

Clarification on the scope of recovery in Maple Leaf Foods

Non-dangerous defective goods vs dangerous defective goods
In the news
Maple Leaf Foods Listeria Outbreak
Franchisees of the sandwich chain, Mr. Sub, suffered financial losses after their supplier, Maple Leaf Foods, supplied the franchisees with potentially listeria-infected meats, which were discarded pursuant to a voluntary recall by Maple Leaf.[15][16] The Supreme Court of Canada stated that Maple Leaf did not owe the franchisees a duty of care, as they were not the ultimate consumers of the tainted meat, but a commercial intermediary who were not at risk of harm.[15][17]

Watch the video below for an apology issued by Maple Leaf Foods via a TV ad in response to the listeria outbreak.[18]


Over two decades later, the Supreme Court of Canada in 1688782 Ontario Inc. v. Maple Leaf Foods Inc. clarified the scope of recovery for negligent supply of shoddy goods or structures.[19] The Court narrowly interpreted the holding in Winnipeg Condominium, stating that compensation for the repair cost of a defective non-dangerous product only improves the quality of the product, not its safety, and therefore such a remedy is better limited to implied warranties within contract law.[6] The Court interpreted Winnipeg Condominium as only justifying recovery in tort for shoddy goods because dangerous structures/goods pose a real and substantial danger to the plaintiffs' rights in person or property.[20] In other words, dangerous products are treated as if they have interfered with the plaintiff's rights in person or property, even if the product is repaired before it could cause such harm, and therefore redress remains tangibly connected to the rights which tort law serves to protect.[21] The Court in Maple Leaf stated that, by contrast, non-dangerous defective products do not pose such a risk and therefore lack a tangible connection to the plaintiff's rights in person or property, leaving only rights to the quality of the product and the protection economic interests, which are not protected by tort law per se.[22]

Determining proximity with reference to the parties' contractual relationship

In addition to establishing that claims for negligent supply of shoddy good/structures will not be available in instances where the good is non-dangerous, the Supreme Court of Canada in Maple Leaf also set out important considerations for courts to make when determining proximity in such an action.[19] Specifically, the majority drew heavily on the extant contractual matrix between the parties in their proximity analysis.[23] The majority considered that the deliberate contractual choices made between the parties, or lack thereof, must inform a court's understanding of whether a relationship proximity existed.[24] On the facts of the case a duty of care was rejected.

The dissent, by contrast, did not view the contractual matrix as determinative of a lack of proximity, and would have recognized proximity between the parties.[25] The dissent justified a finding of proximity with reference to the one-sided relationship of vulnerability and dependence that arose from the contractual arrangements.[26]

Alternative remedies for non-dangerous, defective goods

As stated by the Ontario Court of Appeal in Arora v Whirlpool Canada LP, there are other remedies under statute or contract law for a plaintiff to recover for the diminution of value caused by a shoddy product that is not dangerous.[7] The Court stated that:[7]

Assuming ... that a prima facie duty of care is made out ... policy considerations negate recognizing a cause of action in negligence for diminution in value for a defective, non-dangerous consumer product. On the pleaded facts, I agree with the motion judge that the appellants should be left to their statutory and contractual remedies, including express, implied or statutory warranties, and "should not look to tort law to negotiate a better bargain for themselves".

As such, claimants seeking to recover for non-dangerous, defective goods may elect to pursue a claim for breach of warranty under contract law or statute where available. In addition to common law contractual remedies, various provincial and federal statutes provide for the protection of consumers. For example, British Columbia's Sale of Goods Act sets out various statutory remedies available to a plaintiff when a vendor breaches a warranty of sale.[27]

Legislation
Sale of Goods Act, RSBC 1996, c 410, s 56[27]
56. Remedy for breach of warranty
  1. If there is a breach of warranty by the seller, or if the buyer elects, or is compelled, to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not merely because of the breach of warranty entitled to reject the goods, but the buyer may
    1. (a) set up against the seller the breach of warranty in diminution or extinction of the price, or
    2. (b) maintain an action against the seller for damages for the breach of warranty.
  2. The measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty.
  3. In the case of breach of warranty of quality, the loss is, unless there is evidence to the contrary, the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty.
  4. The fact that the buyer has set up the breach of warranty in diminution or extinction of the price does not prevent the buyer from maintaining an action for the same breach of warranty if the buyer has suffered further damage.

A diverging perspective on negligent supply of shoddy goods within English common law

In D. & F. Estates Ltd. v. Church Commisioners for England, the House of Lords stated that the cost of repairing a defect in a building is not recoverable in tort by a successor in title against the contractor for want of a contractual relationship between the parties.[28] The House of Lords stated that any issues arising from the quality of the building must be limited to contract law because allowing recovery under negligence law would create a non-contractual warranty as to the fitness of the product.[29] The Court explained that contractors may only be allowed to recover under negligence law when the defect causes physical injury to the subsequent purchaser or their property, or if there was a special relationship of reliance between the subsequent purchaser and the contractor actionable in negligent misrepresentation.[30][31] Later, in Murphy v. Brentwood District Council, the House of Lords re-established a broad rule limiting recovery for pure economic loss in tort.[32] In Murphy, the House of Lords overruled the decision in Anns v. Merton London Borough Council, which laid out the general test for determining recovery in an action for negligence that is still followed in Canada.[32][33]

Discussion questions

  • Why was the damage arising from the defective building in Winnipeg Condominium economic loss and not property damage?[34]
  • How is the duty owed in tort under negligent supply of shoddy goods or structures distinct from the sorts of duties that arise from a contract? Does it make sense for tort duties to subsist alongside contractual duties?
  • How did the majority in Maple Leaf Foods[35] construe the ratio of Winnipeg Condominium[36]? Was this a narrowing reinterpretation of the precedent? How did the relationship of proximity in these two cases differ?
  • Is the dissent’s argument for recognising a novel duty of care in Maple Leaf Foods[19] compelling?


  1. ↑ Jump up to: 1.0 1.1 1.2 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at paras 21–23.
  2. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at para 43.
  3. ↑ Jump up to: 3.0 3.1 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at paras 47–49.
  4. ↑ Jump up to: 4.0 4.1 4.2 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at para 17.
  5. ↑ Jump up to: 5.0 5.1 Kairos Angaddol (19 July 2023). "Product liability in Canada: who is at fault?". Lexpert.
  6. ↑ Jump up to: 6.0 6.1 6.2 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at para 47, citing Hughes v. Sunbeam Corp. (Canada) Ltd., 2002 CanLII 45051 (ONCA) at para 36.
  7. ↑ Jump up to: 7.0 7.1 7.2 Arora v Whirlpool Canada LP, 2013 ONCA 657 at para 116.
  8. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at paras 3–5.
  9. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at paras 27–28.
  10. ↑ Jump up to: 10.0 10.1 Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at para 25.
  11. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at paras 35–38.
  12. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at para 36.
  13. ↑ Jump up to: 13.0 13.1 Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at para 37.
  14. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at para 41.
  15. ↑ Jump up to: 15.0 15.1 Stefanovich, Olivia (6 Nov 2020). "Supreme Court dismisses appeal against Maple Leaf Foods over tainted meat". CBC.
  16. ↑ 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at paras 1–14.
  17. ↑ 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at paras 57–58 & 95.
  18. ↑ Anthony Kalamut. (24 May 2021). "Maple Leaf Foods Canada - Apology Ad". YouTube.
  19. ↑ Jump up to: 19.0 19.1 19.2 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2).
  20. ↑ 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at paras 45–51, citing Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at paras 35–41.
  21. ↑ 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at paras 47–49, citing Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at paras 35–41.
  22. ↑ 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at paras 50–51.
  23. ↑ 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at paras 88–94.
  24. ↑ 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at paras 90–91.
  25. ↑ 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at para 151.
  26. ↑ 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at paras 152–155.
  27. ↑ Jump up to: 27.0 27.1 Sale of Goods Act, RSBC 1996, c 410, s 56.
  28. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at para 16, citing D. & F. Estates v. Church Comissioners for England, [1988] UKHL 4 (BAILII).
  29. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at para 18, citing D. & F. Estates v. Church Comissioners for England, [1988] UKHL 4 (BAILII) at 1007.
  30. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at para 19, citing D. & F. Estates v. Church Comissioners for England, [1988] UKHL 4 (BAILII) at 1014.
  31. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at para 19, citing Hedley Byrne. & Co. v. Heller & Partners Ltd., [1963] UKHL 4 (BAILII).
  32. ↑ Jump up to: 32.0 32.1 Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at para 18, citing Murphy v. Brentwood District Council, [1991] UKHL 2 (BAILII).
  33. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1) at para 18, citing Anns v. London Borough of Merton, [1977] UKHL 4 (BAILII).
  34. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1).
  35. ↑ 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 (§19.3.2.2) at paras 44–94.
  36. ↑ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 CanLII 146 (SCC) (§19.3.2.1).
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