Restitution Discussion Group Archives
| Sender: |
David Cheifetz |
| Date: |
Tue, 31 Oct 2006 20:45:24 -0500 |
| Re: |
Serhan v. Johnson & Johnson |
So the Ontario CA didn't want to touch the waiver of
tort issue in Serhan? That might be because the CA didn't want
to have to explain what it meant by what it said in 3COM
v Zorin, June 2/06, Ontario CA.
While 3COM was argued as if it was only tort (deceit)
case and as if the award was damages, and waiver of tort wasn't mentioned,
look at what actually went on. The tort was deceit. My understanding is
that there wasn't, in fact, any evidence that the goods could have been
sold at any higher price than what they were sold for, even to the bad
guys. That means there wasn't an actual loss, here, despite what the CA
said. While the award was called damages, the bad guys were effectively
forced to disgorge the difference between the price at which they purchased
and the price at which 3COM (supposedly) would have sold to them if the
truth had been told to 3COM: see para 56-57, specifically, the last few
sentences of para 57.
The fact that we are dealing here with a diminution
in profit rather than an actual loss matters not. If the appellants
had provided the respondents with the true customers and places of shipment,
the respondents would have been entitled to a higher price for their
goods or to refuse to sell their goods at the prices they did. The appellants
deprived the respondents of this choice and made a greater profit because
they did so. It was not necessary, in the circumstances of this case,
to introduce evidence of a specific alternative third party buyer. In
essence, the appellants’ first and second arguments amount to
a submission that the difference between the SPQ and what 3Com’s
pricing would have been should remain with the appellants. The appellants’
submission ignores the conceptual basis of tort law, which is restitutionary.
The difference between the contract price and the price at which the
appellants would otherwise have had to purchase the goods is a cost
properly borne by the appellants. Exactly what was it about the case that made it evidence
that an alternative buyer existed at the higher price. That it was a deceit
claim?
David Cheifetz
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The Ontario Court of Appeal has refused
leave to appeal the decision of the Divisional
Court (where the judges divided on the viability of a claim based
on waiver of tort).
Where this leaves us is not entirely
clear: although the merits of such a claim might conceivably be determined
in the Serhan class action, it is almost certain that the parties
will settle before an actual trial of the issues. Other products liability
claims have been drafted (or amended) to reflect Serhan, so
perhaps the status in Ontario of waiver of tort will be decided in one
of those.
Bennett Best Burn LLP
From: Neil Guthrie
Sent: October 31, 2006 1:35 PM
Subject: [RDG] Serhan v. Johnson & Johnson
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