The Overlap of Tort and Contract

Michael Bridge*

Synopsis

Introduction
I. The Evolution of the Categories of Civil Liability before the
Nineteenth Century
II. The Categories of Civil Liability in the Modern Law
A. Overlapping Contractual and Tortious Liability
B. The County Court Costs Cases
C. The Legacy of the County Court Costs Cases
III. Overlapping Liability and Practical Problems
A. Contributory Negligence and the Plaintiff's Power of Election
B. The Alignment of Contractualand Tortious Rules of Remote-
ness of Damage
Conclusion

Introduction
To a common law lawyer, Cr~peau's distinction between the
theoretical unity and technical duality of civil liability,' which points to
the difference for purposes of suit between contractual and extra-
contractual duties even as it affirms that both are components of the
umbrella category of legal obligation, is a nice paradox to tease the mind
but does not serve as a practical guide for the solution of problems. If the
common law lawyer, however, were to reply in the same vein, he might be
tempted to advert to the theoretical duality and technical unity of his own
system of civil liability. Indeed, such a response could claim to have some
rough-and-ready correspondence to the state of his law - a point I hope
to develop in the course of this paper.

*Of the Faculty of Law, McGill University.

'Cr~peau, Des regimes contractuelet d6lictuel de responsabilit6civile en droit civil
canadien (1962) 22 R. du B. 501.
19821 WABASSO

Common law lawyers are not accustomed to thinking in terms of a

compendious subject of civil liability or obligations, nor is there yet any
serious attempt by any treatise writer to that end. Putting aside statute, a
common law lawyer would fill out the rubric of civil liability with various
obligations culled from contract, tort, restitution, equity, bailment and the
common callings - and that is hardly a comprehensive list. Theoretical
unity is wholly absent, but it would be quite misleading to assert the
existence of categorical stability among the various groups mentioned
above, for they exhibit a dynamism which is quite at odds with any
attempt to fit them into separate, hermetically-sealed compartments. The
extent to which they interact with and overlap each other may yet compel
even the unscientific common law lawyer to give attention to their
location in the broad pattern of civil liability.
No discussion of the present position of the categories of civil
liability at common law is comprehensible without reference to their
historical evolution, which will be attempted in outline in the next section.
After all, a system of law without a code has no obvious starting point.
The categories of civil liability at common law have to be approached by
way of the forms of action, namely the original writs granting relief in the
King's courts, which, in Maitland's memorable phrase, though dead still
2
rule us from their graves.
I. The Evolution of the Categories of Civil Liability before the
Nineteenth Century3
If contract law is recognized as emerging when the law first enforces
mutual promises, it can be said that the common law of contract was born
in Norwood v. Read (1558)4 where the Court recognized that "every
contract executory is an assumpsit in itself".5 An understanding of the
significance of these words is dependent on a discussion of the prior
evolution of the forms of action in what we would now call contract cases.
Starting at the beginning of the fourteenth century, the available writs
in this area were account, covenant and debt. The first required the
2
"The forms of action we have buried, but they still rule us from their graves":
F. Maitland, The Forms of Action at Common Law [:] A Course of Lectures, 2d ed.
(1965), 2.
3
See F. Pollock & F. Maitland, History of English Law, 2d ed. (1898); W. Holds-
worth, History of English Law (1903-66), 16 vols; J. Ames, Lectures on Legal History
(1913), Lectures VIII, IX and XI; C. Fifoot, Histo' and Sources of the Common Law:
Tort and Contract(1949); T. Plucknett, A Concise History ofthe Common Law, 5th ed.
(1956); S. Milsom, Historical Foundations of the Common Law, 2d ed. (1981); A.
Simpson, A History of the Common Law of Contract (1975); J. Baker, An Introduction
to English Legal History, 2d ed. (1979).
4(1558) 1 Plow. 180, 75 E.R. 276 (K.B.).
51bid., 279.
 REVUE DE DROIT DE McGILL [Vol. 27

defendant to account to the plaintiff for a money sum but lay only in a
limited class of cases involving guardians, bailiffs and receivers. It was
unpromising stuff for the development of a general theory of contractual
liability in view of its material limitations and the time and expense taken
up by the proceedings it necessitated. Indeed, it was eventually
superseded by an equitable action of the same name: a court of equity was
the appropriate resort for a plaintiff who "felt the urge to scrape the
conscience of the defendant as closely and painfully as the law would
permit".6
More significant were the writs of debt and covenant. It would be
inaccurate to characterize the former as contractual since it was a real
rather than a personal action: its essence lay in the plaintiff's grant of a
quidpro quo, not in any promise to pay by the defendant. As a vehicle for
the expansion of a general law of contract, it was crippled by at least two
serious shortcomings: it lay only for the recovery of a liquidated sum and
it was subject to what has been called "a form of licensed perjury", 7
namely the defendant's right to wage his law. This was a process whereby
the defendant could plead the general issue and elect for trial by a process
of oaths. If he swore an oath of innocence and could produce the requisite
number of compurgators to swear that he was a credible person, this was
a conclusive defence to the action.
If contract is viewed as a mutual and consensual transaction,
covenant was no more contractual than debt. The writ lay at the behest of
a promisee in the case of a promise made under seal. Given the absence
of any need for the promisee to show that there had been a quidpro quo
for the promise, and in view of its immunity from the later development of
the general doctrine of consideration, 8 the non-contractual character of
covenant becomes evident. Covenant, in a word, was not consensual.
Furthermore, its formality and inability to adapt itself to circumstance
meant that it could never carry the burden of bringing the law into an
increasingly mercantile economy.
Curiously - indeed ironically, in view of twentieth century develop-
ments - the source of what later became our modem law of contract was
the law of tort, in particular the writ of trespass. For our purpose, it is not
necessary to decide whether trespass was the original source or whether
this was trespass on the case after its separation from trespass.9

6
Fifoot, supra, note 3, 275.
'Salmond, Observations on Trover and Conversion (1905) 21 L.Q.R. 43, 45.
sPromises under seal have always posed difficulties for those advocating an omnibus
theory of consideration, leading to attempts to argue that consideration reposes in the form
of the promise.
9See Milsom, supra, note 3, 305-13.
 19821 WABASSO

The Humber Ferryman's case (1348)10 is the earliest example of the

writ of trespass being used to support liability for the negligent breach of a
contractual undertaking. According to the plaintiff's complaint, the
defendant had undertaken to carry the plaintiff's mare safe and sound
across the River Humber, but the mare had perished because the
defendant had overloaded the ferry. Despite the defendant's plea that the
case properly sounded in covenant, the Court of King's Bench adjudged it
to lie in trespass. Liability for negligent undertakings was consolidated in
Waldon v. Marshall (1370)11 where the plaintiff alleged that the
defendant, a horse doctor, had undertaken to cure his horse but, owing to
the negligent performance of his task, the horse had died. Again, it was
argued that the case sounded in covenant since it was based on a promise
by the defendant, but the Court held that the action was properly laid in
trespass on the case. Thereafter, it could be said that an action on the
case would lie where an express undertaking had been breached by a
negligent act of commission. Except in the case of the common callings,
such as common carriers and innkeepers, who were charged upon the
common custom of the realm, it would be more than two hundred years
after Waldon v. Marshall before actions of a similar nature could be
2
brought where no express undertakings to act were given.1
The cases referred to above reveal more clearly today than they did
at the time of their decision that they stood at the junction of case and its
offshoot, assumpsit, which was on the point of striking a separate course.
It is worth noting too that negligent breaches of contractual undertakings
are central to the modem overlap of tort and contract. But the penetration
of trespass on the case into what we would now call contract went beyond
the modem overlap of contract and tort and into an area which in general
is purely contractual in modem terms, namely, liability for failure to
perform an undertaking at all, in other words, liability for an omission.
Liability in case for non-performance begins to appear in the fifteenth
century. The first decisions are based on the special form of action on the

10(1348) Lib. Ass. 22 Ed. III, pl. 41. See the discussion of the case in Plucknett,
supra, note 3, 470-1. See also Simpson, supra, note 3, 623-4.
1"(1370) Y.B. Mich. 43 Ed. III, f. 33, pl. 38. The case is translated in Fifoot, supra,
note 2 3, 81.
1 The line between nonfeasance and misfeasance seems a natural one to divide
trespass and covenant; to some extent, it separates contract and tort even today.
According to Milsom, supra, note 3, 317: "Covenant was about the enforcement of
promises in an almost literal sense: it was aimed at people who did not do what they had
promised to do. The ferryman had of course failed to carry the mare over the river. But he
was sued, not because it was left behind, but because it was dead. He was not naturally
liable in covenant, any more than the borrower who damaged what he had borrowed was
liable in detinue. The complaint was not failure to carry out the 'contractual' obligation,
but of damage actually caused."
 Mc GILL LAW JOURNAL [Vol. 27

case for deceit. In Somerton's case (1433), 3 Somerton had retained

Colles as counsel in the purchase of a manor from Botelor. Despite his
undertaking to act for Somerton, Colles "falsely and fraudulently"
procured the manor for Blunt. The judgment of Babington C.J. makes it
plain that a mere failure to perform the undertaking would not give
Somerton an action on the case: the appropriate form of action would be
covenant and this would require a seal. But it was different where the
lawyer "betrays his counsel and becomes of counsel for another" for here
deceit would lie. Likewise, Cottesmore J. asserts: "And I say that matter
which lies wholly in covenant can by malfeasance ex post facto be
converted into deceit. For if I warrant to purchase for you a manor,
notwithstanding that I fail to do this for you, no action will lie for these
bare words without a deed to this effect. ' 13a
A similar decision is Doige's case (1442), 4 in which Doige under-
took to enfeoff the plaintiff within fourteen days but instead enfeoffed a
third party. Again, the defendant demurred to the plaintiff's bill of deceit
on the ground that the action should have been in covenant but again the
verdict went in favour of the plaintiff. By enfeoffing the third party, Doige
had rendered himself liable in deceit.
Liability in case for a simple refusal to perform, uncompounded by
any act of disablement, had to wait until the sixteenth century. When
it did emerge, however, it was more obviously contractual in temper than
liability for misfeasance since "the idea of trespass or quasi-trespass was
no longer helpful". 5 As Plucknett also says, "the habit grows of discus-
sing these matters in terms of promises rather than deceits, of contract
rather than tort". 6 It was in this climate that the Court of King's Bench
was able to assert in Norwood v. Read (1558)17 that "every contract
executory is an assumpsit in itself",' 8 and hold the executors of Gray
liable in an action on the case for Gray's failure to supply a quantity of
wheat The plaintiff was held entitled to recover damages for non-
delivery, in which award a debt claim for the recovery of money paid in
advance was included.
The consequence of focussing attention on the undertaking rather than
on the injury was that the common law developed a doctrine of mutual

.3(1433) Y.B. Hil. 11 Hen. VI, f. 18, pl. 10: Pasch. pl. 1: Trin. pl. 26. The case is
translated in Fifoot, supra, note 3, 343-4.
13a Ibid.
14(1442) Y.B. Trin. 20 Hen. VI, f. 34, pl. 4. The case is translated in Fifoot, supra,
note 3, 347-9.
"Plucknett, supra, note 3, 639.
16Ibid., 643.
"Supra, note 4.
"Supra, note 5.
19821 WABASSO

promises which provided the foundation for a general theory of considera-

tion. This in turn led over a protracted period to the development of a
theoretical framework of remedies for breach of contract based on the
dependence or independence of contractual promises. At the same time
as the doctrine of consideration began to evolve, assumpsit, which by
now was an independent species of action on the case, produced an
offshoot, indebitatusassumpsit. This process led to the development of a
body of restitutionary actions within a developing law of contract - a not
altogether beneficial process whose effects are still being felt in the
twentieth century. It is worth examining the rise of indebitatusassumpsit
as it involved the supersession of the writ of debt.
About the middle of the sixteenth century it became established that,
if a party indebted to another subsequently promised to pay the amount
owing, the other party could recover this sum either in debt or in the
variant of the action on the case called indebitatus assumpsit.19 Laying
the action in indebitatus assumpsit freed the plaintiff of some of the
drawbacks of debt, including wager of law. What enabled indebitatus
assumpsit to outflank debt was the willingness of the Court of Queen's
Bench to dispense with the need to show an actual subsequent promise by
the debtor to pay; rather, this promise was treated as an untraversible
allegation. 20 Over a period of years this practice, which had the
consequence of breaking the monopoly possessed by the Court of
Common Pleas over debt actions, led to the reversal of Queen's Bench
decisions in a Court of Exchequer Chamber drawn from judges of the
Courts of Exchequer and Common Pleas. The matter finally received a
definitive ruling from a Court of Exchequer Chamber comprising judges
of the Courts of Exchequer, Queen's Bench and Common Pleas in
Slade's case (1602).21
Slade agreed to sell to Morley for £16 all the wheat and rye grown on
Slade's estate at Rack Park. Morley promised to pay on the feast of St
John the Baptist but failed to do so, and declined to pay when payment
was later sought by Slade. A jury found that only the original bargain
stood between the parties: there had been no subsequent promise by
Morley to pay. Despite this finding, the Court held that Slade had the
choice of suing either in debt or in an action on the case (indebitatus

"9Norwood v. Read, supra, note 4. The beginnings of this development can be seen in
Jordan's case (1528) Y.B. Mich. 19 Hen. VIII, f. 24, pl. 3, translated in Fifoot, supra,
note 3, 353-5. As to the distinction between an indebitatuscount and a special assumpsit
count, see Simpson, supra, note 3, 305-7.
2°See Fifoot, supra, note 3, 359.
21(1602) 4 Co. Rep. 91a, 76 E.R. 1072 (K.B.). See Licke, Slade's Case and the
Origin of the Common Counts (1965) 81 L.Q.R. 422, 539 and (1966) 82 L.Q.P. 81;
Baker, New Light on Slade's Case [1971] Cambridge L.J. 51, 213.
 REVUE DE DROIT DE McGILL [Vol. 27

assumpsit) at his election. Words similar to those used in Norwood v.

Read22 were repeated by the Court:
It was resolved, that every contract executory imports in itself an assumpsit, for when
one agrees to pay money, or to deliver any thing, thereby he assumes or promises to
pay, or deliver it, and therefore when one sells any goods to another, and agrees to
deliver them at a day to come, and the other in consideration thereof agrees to pay so
much money as [sic] such a day, in that case both parties may have an action of debt,
or an action on the case on assumpsit, for the mutual executory agreement of both
parties imports in itself reciprocal actions upon the case, as well as actions of
debt... *23

Moreover, the plaintiff's damages in indebitatusassumpsit could include

the debt itself as well as any special damage suffered.
Plucknett thought the decision in Slade's case was "indefensible, for
it obliterates the distinction between debt and deceit, between tort and
contract". 24 It is difficult, however, to see the force of this criticism: an
allegation of debt had already become aproforma averment in an action
on the case; deceit would have to wait nearly three hundred more years
before acquiring the tightness of definition we recognize today. 2
Furthermore, -given the evolution of assumpsit and its indebitatus
offshoot from the action on the case, it is hard to see any distinction
between contract and tort that Slade's case helped to obliterate. While
the writ of debt was effectively stultified by Slade's case, we have seen
that it did not possess a character that we would recognize today as
contractual. Indeed, nothing like a systematic distinction between
contract and tort emeiged until the nineteenth century.2 6
What Slade's case did, however, was to prevent the drawing of a
distinction between contractual and restitutionary actions. Since liability
in indebitatusassumpsit was posited on an antecedent debt, whose genesis
did not necessarily lie in any bargain, and the averment of a subsequent
promise to pay was an untraversible fiction, it followed that no sharp
distinction could be drawn between promises implied from the parties'
conduct and promises imputed to the parties by the dictates of justice.27
In the seventeenth century, actions developed for the recovery of money
(money had and received) and for reimbursement for goods supplied

22
Supra, note 4.
23Supra, note 21, 1077.
24Supra, note 3, 647.
21Derry v. Peek (1889) 14 App. Cas. 337 (H.L.).
26A flourishing forms of action system could not have nurtured the conceptualism
necessary for such a systematic distinction to be drawn.
27"If [indebitatusassumpsit] was to be used as a general alternative to debt, it must, of
necessity, accept the legacy of claims outside the limits of agreement": Fifoot, supra,note
3, 363.
1982] WABASSO

(quantum valebat) or services rendered (quantum meruit).2s It later

became common for plaintiffs not to plead the terms of the actual
agreement of the parties, but to terminate the contract and frame a claim
in one of the simplified forms of action known as the common counts,
which were offshoots of indebitatus assumpsit.29 It suffices here to say
that this tendency, which suppressed any distinction between implied and
imputed promises, has left its mark on the common law by slowing down
the emergence of a mature body of restitutionary principles.3 0
At this point, it becomes pertinent to step back in time and observe
the relationship of bailment to the emergent law of assumpsit. If one
defines bailment as a transaction whereby a bailor entrusts a bailee with
possession of goods on terms providing that the goods are to be
redelivered to the bailor after the expiry of a term or the occurrence of an
event, the transaction appears as a consensual entity with an evident
similarity to contract. Tracing the location of bailment in the old forms of
action is directly relevant to the placing of any boundary between
contract and tort in the twentieth century.
In the early days, a bailee could be called on to account for goods by
the writ of detinue, which showed a common ancestry with the writ of
debt. Gradually, the two writs separated so that debt concerned itself with
liquidated money claims while detinue dealt with the case where the
debtor had the plaintiff's goods.
Ames 3 asserts that detinue was founded on bailment and that it was
contractual in nature. The first assertion is countered by Milsom who
points to a number of cases where detinue lay otherwise than upon 33a
bailment.3 2 The second assertion is effectively demolished by Fifoot
whose view is more acceptable in the twentieth century than it would
have been in the nineteenth, when attempts were made to force bailment
into a contract mould:
Bailment, in truth, is sui generis - an elementary and unique transaction, the
practical necessity of which is self-explanatory, and if in later years it is most often,
though not invariably associated with a contract, this is not, and never has been, its

28 See Simpson, supra, note 3, 489-505.

29"One great benefit, which arises to suitors from the nature of this action, is, that the
plaintiff needs not state the special circumstances from which he concludes 'that ex aequo
& bono, the money received by the defendant, ought to be deemed as belonging to him:' he
may declare generally, 'that the money was received to his use;' and make out his case, at
the trial": Moses v. Macferlan (1760) 2 Burr. 1005, 97 E.R 676, 679 (K.B.) per Lord
Mansfield C.J.
30
See R. Goff & G. Jones, The Law of Restitution, 2d ed. (1978), 5-11.
3
32
Supra, note 3, Lecture VI.
Supra, note 3, 269-75.
"3Supra,note 3, 24-34.
 McGILL LAW JOURNAL [Vol. 27

essential characteristic. It was a familiar fact, as Detinue

4
and Debt were familiar
words, before contract was a generic conception.1

Detinue, like debt, permitted the defendent to wage his law and the
emergence in the fourteenth century of an action on the case against
parties undertaking to exercise due care had the effect of setting up an
alternative to the detinue action. Unlike debt, however, detinue was never
superseded by the action on the case and has retained a definite, if at
5
times exiguous, existence to this day.1
Until the seventeenth century, whenever an assumpsit action was
laid against bailees, it was necessary, just as for other assumpsit actions,
to show that the bailee who was negligent in looking after goods had
expressly undertaken to exercise care. This express undertaking,
however, was never required of bailees exercising the common callings,
such as common carriers and innkeepers, since they were charged, not on
the basis of any undertaking whether express or implied, but upon the
common custom of the realm. Subsequently, the rise of indebitatus
assumpsit and its triumph in Slade's case meant that implied under-
takings could be laid against all types of bailees. Furthermore, it became
clear in the early part of the seventeenth century that assumpsit also lay
in the case of gratuitous bailments.16 Bailment, in other words, thus
escaped the net of the general theory of consideration in the sense of this
element being necessary to the successful prosecution of an assumpsit as
opposed to a detinue suit. This development bears out the accuracy of
Fifoot's view that bailment should not be forced into a contract mould. It
also impresses us with the fact that the notion of an undertaking is by no
means a monopoly of the contract action.
Bailment resisted absorption into contract for two reasons: it was
never wholly immersed in the general theory of consideration and, unlike
debt, detinue was never wholly superseded by indebitatus assumpsit.
Even today, its precise location between tort and contract is not easy to
establish. 37 Essentially, bailment is a proprietary relationship governed
by a body of law, personal property law, in which title is relative and

34lbid., 24-5.
35Detinue has, however, disappeared in American jurisdictions and has recently been
legislated out of existence in England by the Torts (Interference with Goods) Act, 1977,
c. 32.
36
Section 2 (1) in full states: "Detinue is abolished."
Wheatley v. Low (1623) Cro. Jac. 668, 79 E.R. 578 (K.B.). See Ames, supra, note
3, Lecture XIII.
17The problem is posed in an acute form in the case of exception clauses and the

vicarious immunity of third parties. See Morris v. C. W. Martin & Sons, Ltd [1966] 1
Q.B. 716 (C.A.); New Zealand Shipping Co. v. A.M. Satterthwaite & Co. [1975] A.C.
154 (P.C.N.Z.); Port Jackson Stevedoring Pty Ltd v. Salmond and Spraggon Pty Ltd
119811 1 W.L.R. 138 (P.C. (Austl.)).
19821 WABASSO

which therefore never attained a significant degree of reification. Until

1854,38 there was no writ of specific delivery to compel a defendant in
detinue proceedings to surrender goods, and even today the remedy is
seldom granted, 39 though recovery of the goods can more frequently be
obtained by indirect and interlocutory proceedings in replevin. 40 These
exceptions apart, property interests in personalty are typically vindicated
in proceedings culminating in a damages liability on the part of the
defendant. Consequently, the property torts of trespass de bonis
asportatis, conversion, detinue and replevin are normally considered as
pertaining to the law of torts, though their migration in the law school
curriculum to and fro between torts and personal property is some
evidence of the difficulty lawyers have in classifying them. The
availability of the property torts and the readiness with which the
consensual relationship of bailment could be laid in assumpsit guaranteed
a future of overlapping contractual and tortious liability in bailment
cases.
The common callings, which frequently involved a bailment relation-
ship, also resisted assimilation with contract for the additional reason that
an express assumpsit was not necessary when defendants were charged
on the custom of the realm. As it involved the notion of imposed liability,
the subject matter of the common callings would find a natural niche in
tort law when that body of law emerged as an integrated entity. Never-
theless, as a result of developments set in train by indebitatusassumpsit,
common callings transactions could be readily rationalized in terms of
implied contract. Thus the stage was also set here for overlapping liability
in contract and tort.

I. The Categories of Civil Liability in the Modern Law

A legal system based on the forms of action could hardly draw a
doctrinal distinction between contract and tort, especially a legal system
in which these two bodies of law grew from a common writ, namely,
trespass on the case. Of course, such a system requires a plaintiff to
choose the right writ if he is to be successful, but this is a long way from
establishing a systematic distinction between different bodies of law.

"Common Law ProcedureAct, 1854, 17 & 18 Vict., c. 125, s. 78.

"Cohen v. Roche [19271 1 K.B. 169 (C.A.). This case involved a suit in detinue,
though the headnote is drafted in terms of specific performance of a contract of sale; the
principle appears to be applied the same way whether specific delivery or specific
performance
40
is sought.
Unlike English law, replevin is not confined in Canada to cases of unlawful seizure
or distress. See Ontario Law Reform Commission, Report on Sale of Goods (1979), 439-
40, where its advantages over detinue are stated.
 REVUE DE DROIT DE McGILL [Vol. 27

The boundary between contract and tort assumes shape with the
contemporaneous developments of the abolition of the forms of action4
and the emergence of a body of contract doctrine. This last event owes
much to the systematization and rationalization of contract law by
treatise writers in a movement starting with Powell's treatise in 1790.42
Doctrinal innovation was particularly influential in delineating an
integrated law of contract in the areas of formation, consideration and
privity. The introduction of offer and acceptance analysis43 in the
formation of contracts encouraged the belief that contract was an
integrated and separate entity springing into existence at a definite
moment and transfiguring the parties' relationship when acceptance
matched offer, rather than a legal inference drawn from a continuum and
making no absolute distinction between the legally relevant and
irrelevant.
Tightness in the definition of contract was also fostered by develop-
ments in consideration which, in the first half of the nineteenth century,
was delineated in doctrinal terms instead of merely as a catalogue of
instances in which the courts would enforce certain promises.4 4 Eastwood
v. Kenyon (1840) 45 spelt the end of the principle that the existence of a
moral obligation on a promisor is good consideration for a promise. The
doctrine acquired an economic shape with the assertion in the contem-
poraneous decision of Thomas v. Thomas (1842)46 that consideration
must be a thing of value. Pollock's famous definition of consideration as
the price which is paid to buy a promise4 7 may be seen as neatly
summarizing this doctrinal shift.
41In the case of the personal forms of action, abolition was a gradual process. See
Uniformity of Process Act, 1832, 2 & 3 Will. IV, c. 39; Common Law ProcedureAct,
1852, 15 & 16 Vict., c. 76, s. 3; Supreme Court ofJudicatureAct, 1873, 36 & 37 Vict.,
c. 66; ss. 23-4. Real and mixed actions were abolished by the Real PropertyLimitations
Act,42 1833, 3 & 4 Will. IV, c. 27, s. 36.
J. Powell, Essay upon the Law of Contracts and Agreements (1790). Subsequent
works included: J. Chitty, A Practical Treatise on the Law of Contracts (1826); C.
Addison, A Treatise on the Law of Contracts (1847); S. Leake, Principlesof the Law of
Contracts(1867); F. Pollock, Principlesof Contract (1875); W. Anson, Principlesofthe
English Law of Contract and of Agency in its Relation to Contract (1879).
43See Payne v. Cave (1789) 3 T.R. 148, 100 E.R 502 (K.B.) (contract concluded
interpraesentes); Kennedy v. Lee (1817) 3 Mer. 441, 36 E.R. 170 (Ch.) (exchange of
letters); and Adams v. Lindsell (1818) 1 B. & Aid. 681, 106 E.Rt 250 (K.B.).
44This produced a major parting of the ways with the civil law doctrine of cause. The
arguments of P. Atiyah, Considerationin Contracts:A FundamentalRestatement (1971)
in effect amount to an attempt to turn back the clock and reproduce the pre-bargain theo.ry
doctrine of consideration.
'5(1840) 11 Ad. & E. 438, 113 E.R. 482 (Q.B.).
46(1842) 2 Q.B. 851, 114 E.R. 330 (Q.B.).
47This definition was relied on by Lord Dunedin in Dunlop Pneumatic Tyre Co. v.
Selfridge and Co. [1915] A.C. 847, 855 (H.L.).
19821 WABASSO

Closely related to these innovations in contractual formation and

consideration was the introduction of the privity of contract rule 8 by
which only parties to a contract may sue or be sued on it. Privity gave an
exclusive definition of the parties to a contract while offer and acceptance
and consideration defined the material of which a contract was made.
These developments in formation, privity and consideration did more
than merely identify the material on which a general law of contract could
be brought to bear: they accentuated the distinction between contract and
tort, which at this stage lagged behind contract in terms of doctrinal
development and treatise-writing. 49 Two further consequences pertaining
to the contract and tort relationship also flowed from these doctrinal
innovations. First, problems were posed in classifying undertakings, not
all of which could be fitted into the new contractual mould; consequently,
no clear distinction between contract and tort was drawn along the line
separating assumed from imposed liability. This point can be illustrated
by reference to bailment law.
Coggs v. Bernard (1703),s 0 which prescribed the liability of various
classes of bailees, was an action on the case against a gratuitous bailee 5'
who had undertaken to carry goods from one cellar to another and had
damaged the goods in the course of so doing. The defendant pleaded in
arrest of judgment entered for the plaintiff that the plaintiff had failed to
aver that he, the defendant, was a common carrier, in which case he could
have been charged on the custom of the realm, or that he had received any
consideration for his undertaking. The Court of Queen's Bench never-
theless held that the plaintiff's declaration was good and a critical
distinction, so significant in the previous history of assumpsit, was taken
between failure to perform a gratuitous undertaking and a negligent
performance thereof. The reasons given by the Court for its decision are

48
Price v. Easton (1833) 4 B. & Ad. 433, 110 E.R. 518 (K.B.); Winterbottom v.
Wright (1842) 10 M. & W. 109, 152 E.R- 402 (Exch.); Tweddle v. Atkinson (1861) 1 B.
& S. 393, 121 E.R. 762 (Q.B.). The Price and Tweddle cases apply the rule that
consideration must move from the promisee. As to whether this rule is truly different from
the privity rule, see Coote, Considerationand the Joint Promisee [1978] Cambridge L.J.
301.49
"[T]he first real monograph on the English law of tort was written by Addison and
was published in 1860": P. Winfield, A Text-Book of the Law of Tort, 5th ed. (1950), 4.
50(1703) 2 Ld Raym. 909, 92 E.R. 107 (Q.B.).
"It is probably more accurate to say that the case went off on a pleading point since the
defendant moved to arrest judgment on the ground that the plaintiff failed to aver that the
defendant was a common carrier or had been paid for his services. The case therefore
squarely raised the question whether a gratuitous bailee who did not exercise one of the
common callings could be liable in an action on the case for damage done to goods: even
on this assumption, the Court was prepared to uphold the jury's verdict against the
defendant who had pleaded the general issue.
 McGILL LAW JOURNAL [Vol. 27

various though the Court was united in its conclusion that an undertaking
to exercise the appropriate degree of care was fairly to be implied from
the nature of the bailment. Gould J. seemed to think that the bailee could
be charged on his undertaking simpliciter, since the goods were entrusted
to him on the strength of that undertaking.12 Powell J. saw the bailee's
undertaking in terms of a warranty which could be sued on in the absence
of consideration provided the plaintiff reposed a trust in the
undertaking. 3 And Holt C.J. put the bailee's liability on two grounds,
namely, that the bailor had been deceived by the bailee's pretence of
care5 4 and that the mere entrustment of goods to the bailee's
5
possession
was sufficient consideration for the bailee's undertaking.
The consideration factor, weak in Coggs v. Bernard,was emphasized
more strongly in Bainbridge v. Firmstone (1838)6 where the bailor, at
the request of the bailee, had surrendered two boilers to the latter for
weighing. The bailee took the boilers apart and declined to return them
whereupon the bailor brought action against him on his undertaking to
surrender the boilers after weighing them. The report of the case tells us
little of the economic purpose of the bailment but any attempt to fit a
transaction of this kind into the economic bargain theory of consideration
launched by cases like Thomas v. Thomas5 7 and Eastwood v. Kenyon"
seems procrustean to say the least.
Some examples of liability based on undertakings outside bailment,
however, are next to impossible to fit within the nineteenth century
contract model. Wilkinson v. Coverdale (1793) 9 is such a case. The
defendant sold certain premises to the plaintiff and was alleged, on being
given the premium, to have undertaken to renew the existing fire
insurance policy with the Phoenix Fire office. The defendant's failure to
inform the fire office that the premises were being transferred to the
plaintiff and to secure the necessary endorsement on the policy
invalidated the insurance. The premises burned down and the plaintiff
brought an action against the defendant on his undertaking. Though
initially inclined to doubt the availability of an action on such a gratuitous
undertaking, Lord Kenyon allowed it to proceed whereupon the plaintiff

52
Supra, note 50, 107.
53
1bid., 108.
54
Ibid., 113.
551bid.
56(1838) 8 Ad. & E. 743, 112 E.R. 1019 (Q.B.).
57Supra, note 46.
"Supra, note 45.
59(1793) 1 Esp. 75, 170 E.R. 284 (Nisi Prius). The case is also reported at 53 tLR.
256, in the preface to which volume (v-vi) Pollock makes plain his disapproval of the
decision.
19821 WABASSO

was nonsuited for his failure to prove the undertaking. It is hard to see
how the plaintiff could be said to have provided consideration for the
defendant's alleged undertaking, unless one were prepared to go so far as
to say that mere reliance on the undertaking would be sufficient, which 60
admittedly is suggested by Lord Holt's judgment in Coggs v. Bernard.
In Wilkinson v. Coverdale, however, the plaintiff did not argue the point;
indeed, he admitted there was no consideration whatever for the
defendant's undertaking. Finally, it is worth noting that the tort of
negligent misstatement as defined in Hedley, Byrne & Co. v. Heller &
PartnersLtd (1964)61 is posited, inter alia, on an assumption of respon-
sibility by the defendant. 62 Lord Devlin saw this species of liability as
being equivalent to, though not identical with, contract. 63 He was of the
view that, with the emergence of tortious liability, the doctrine of
consideration would no longer need to be distorted to accommodate
liability in certain cases of negligent words and drew support from
Wilkinson v. Coverdale itself in establishing the principle of liability in
tort.
The second consequence of the nineteenth century innovations in
contract law was the inhibiting effect they had on the development of
tortious liability. Strengthening the walls of a legal category not only
serves to impress the contents with a unity of design but can also blight
external development. The decision of the Court of Exchequer in
Winterbottom v. Wright (1842)64 provides an illustration of this. The
plaintiff was a coachman who was crippled in consequence of defects in a
coach which the defendant was obliged to maintain in a fit and proper
state under his contract with the Postmaster-General for the carriage of
mails. In denying liability, the Court could simply have said that, outside
the common callings, where duties were imposed according to the custom
of the realm, duties of such a kind would rest on a party only if he
undertook them. But the Court went further and held that the plaintiff was
65
seeking to take the benefit of a contract to which he was not privy.

60
Supra, note 50.
61[19641 A.C. 465 (H.L.).
62
This is to be found, ibid., 486-7 and 492 per Lord Reid, 494-5 and 502-3 per Lord
Morris
63
of Borth-y-Gest, 514 per Lord Hodson and 528-9, 531, 533 per Lord Devlin.
Supra, note 61, 529-30.
64Supra, note 48.
6Ibid., 405 per Abinger C.B.: "The plaintiff in this case could not have brought an
action on the contract; if he could have done so, what would have been his situation,
supposing the Postmaster-General had released the defendant? It would, at all events,
have defeated his claim altogether. By permitting this action, we should be working this
injustice, that after the defendant had done everything to the satisfaction of his employer,
and after all matters between them had been adjusted, and all accounts settled on the
 REVUE DE DROIT DE Mc GILL [Vol. 27

Admittedly, the plaintiffs declaration was fulsome in its reliance on the

terms of the defendant's contract with the Postmaster-General to the
extent that he did not point to any alternative source of obligation, but the
decision turned out to have a baneful effect on the growth of a tort of
negligence centred on a general duty of care and it certainly impeded the
development of manufacturers' liability in negligence to the ultimate
consumers of their products."
One particular area where tortious liability made little headway in the
nineteenth century was economic loss, probably due at least in part to the
identification of economic loss liability with a resurgent law of contract.
Indeed, in the course of the century, economic loss liability in tort would
appear to have receded for it is not at all easy to see how the Wilkinson v.
Coverdale principle could have survived restrictive decisions such as
those in Cattle v. Stockton Waterworks (1875),67 andLe Lievre v. Gould
(1893).68 It was in fact the awareness that there were areas of loss which
it was unwise for tort law to penetrate that led to the demise of Brett
M.R.'s attempt to generalize a duty of care in Heaven v. Pender(1883)69
and delayed until quite recently the full acceptance of the principle of
liability laid out by Lord Atkin in Donoghue v. Stevenson (1932). 70 The
recent growth of negligence in the area of economic loss, 7 1 coupled with
the earlier abandonment of the so-called privity of contract fallacy, has

footing of their contract, we should subject them to be ripped open by this action of tort
being brought against him." Ibid., 405 per Alderson B.: "The contract in this case was
made with the Postmaster-General alone.... If we were to hold that the plaintiff could
sue in such a case, there is no point at which such actions would stop. The only safe rule is
to confine the right to recover to those who enter into the contract: if we go one step
beyond that, there is no reason why we should not go fifty."
66Apart from the dubious case of George v. Skivington (1869) L.R. 5 Ex. 1, which was
vindicated inDonoghue v. Stevenson [19321 A.C. 562 (H.L. (Sc.)), liability on the part of
the manufacturer would arise if the manufacturer were guilty of fraudulent misrepresent-
ation - Langridgev. Levy (1837) 2 M. & W. 519, 150 E.R. 863 (Exch.) - or, possibly,
had put into circulation an inherently dangerous chattel.
67(1875) L.R. 10 Q.B. 453.
68[1893] 1 Q.B. 491 (C.A.). The best discussion of these case law developments is still
to be found in Atiyah, Negligence and Economic Loss (1967) 83 L.Q.R. 248.
69(1883) 11 Q.B.D. 503, 509.
70
Supra, note 66.
7
The case law is much too prolific to recount in full here. The following examples,
however, may usefully be consulted: Hedley Byrne, supra, note 61; Seaway Hotels Ltd v.
Consumer Gas Co. [1959] O.R. 177 (H.C.), affid [1959] O.R. 581 (C.A.); Rivtow
Marine Ltd v. Washington Iron Works [1974] S.C.R. 1189; Spartan Steel & Alloys Ltd
v. Martin & Co. (Contractors) Ltd [1973] 1 Q.B. 27 (C.A.); Anns v. Merton London
Borough Council [19781 A.C. 728 (H.L.) (elastic characterization of loss as physical);
and Caltex Oil (Australia)Pty Ltd v. The Dredge "Willemstad" (1976) 136 C.L.R. 529
(H.C. Austl.).
19821 WABASSO

been responsible for the growth of a substantial overlap of contractual

and tortious liability. The judicial response to this phenomenon is
grounded mainly on nineteenth century authorities decided when overlap
was a less extensive phenomenon than it is today.

A. Overlapping Contractual and Tortious Liability

The potential for overlapping contractual and tortious liability was
always present in a system of law where the tradition of indebitatus
assumpsit encouraged actions on implied undertakings: the line between
implied and imposed liability is never an easy one to draw. Common
callings liability illustrates this particularly well even though, based as it
is on the custom of the realm, it might at first sight seem to be readily and
exclusively assimilable by tort law, which is still seen, though in an
overgeneralized way, as a species of imposed liability. Indeed, liability in
certain cases where the services of the common calling are refused cannot
repose in contract and, moreover, is not easily classified in the internal
categories of tortious liability. Thus, in Constantine v. Imperial Hotels
Ltd (1944),72 the defendants were held liable for their failure to provide
accommodation, which as innkeepers they were obliged to do at common
law, to the plaintiff, a West Indian cricketer. If a tortious label has to be
pinned on the decision, it could be described as a species of the action on
the case which resisted assimilation by the all-conquering tort of
negligence; it is impossible to see how a refusal to contract could import
contractual liability.
Certain instances of liability stemming from the common callings,
however, appear to have migrated to contract law. This seems
particularly true in cases where economic loss has been caused. Hadley
v. Baxendale (1854),73 which established the modern rule of remoteness
of damage in contract, concerned a common carrier. The plaintiff failed in
his efforts to prove a special assumpsit by the carrier7 4 and rested his case
on the carrier's imposed obligation to carry the goods with reasonable
dispatch. The treatment of the case as a contract authority is never-
theless understandable in the light of the ready implication of contracts
encouraged by indebitatusassumpsit.5 A further reason why Hadley v.

72[1944] K.B. 693.

71(1854) 9 Ex. 341, 156 E.R. 145 (Exch.). See Danzig, Hadley v. Baxendale: A
Study in the Industrializationof the Law (1975) 4 J. of Leg. Stud. 249.
U4 The plaintiff's first count declared a special assumpsit, to which the defendant
pleaded non assumpserunt;the plaintiff then entered a nolleprosequias to the first count:
ibid., 146-7.
"It seems accurate to say that much of the difficulty experienced in setting the test for
implied terms, sometimes imposed on the agreement and sometimes genuinely to be
inferred therefrom, is the legacy of this development.
 Mc GILL LAW JOURNAL [Vol. 27

Baxendale has readily been seen as a contract authority may well be that
it concerned a claim for economic loss which effectively
76
became the
preserve of contract law in the nineteenth century.
Apart from these exceptions, common callings liability was ripe for
classification in both contract and tort. A number of early nineteenth
century authorities raise the question whether an action on the case can
be brought when a contract exists between the parties. On close examina-
tion, however, most of them reveal that this is not a contentious matter at
all. It is taken for granted or stated with certainty that, if overlapping
liability does exist, the plaintiff can choose his writ. What is contentious,
nevertheless, is whether an action on the case exists at all, a logically
separate question from and anterior to the one dealing with the plaintiffs
ability to elect between overlapping liabilities. The sequence starts with
Govett v. Radnidge (1802), 77 where an action was brought against
common carriers for negligence in the loading of a hogshead of treacle.
The action was laid in case against three defendants who pleaded the
general issue; the jury acquitted two of them and found the third guilty.
The convicted defendant then sought a motion for a new trial on the
ground that a joint contract existed with all three defendants so that all
were answerable or none at all; a separate verdict, in other words, could
not be entered against him. The Court held that, since he was a common
carrier, an action properly lay against him in case and the judgment of
Lord Ellenborough C.J. leaves no doubt at all that on these facts the
plaintiff could have declared either in case or in assumpsit.78 It is interest-
ing to note that the Court's tolerance of an implied contract in the absence
of an express assumpsit illustrates the slide from an imposed customary
obligation to an implied actual obligation, the primary source of over-
lapping contractual and tortious liability before the rise of the duty of care
in negligence in the twentieth century.

76It should, however, be noted that in Brown v. Boorman (1844) 11 Cl. & Fin. 1, 8
E.1, 1003 (H.L.), where the plaintiff brought an action on the case against a broker for
ignoring his instructions not to part with goods before receiving cash payment from the
customer, it seems not to have occurred to court or counsel that there might be difficulties
in framing an action in case for what was in truth economic loss. Nevertheless, Brown is a
dangerous authority to rely on since it represents a path the law did not later follow to the
extent that it proposes that breaches of contract are automatically torts.
77(1802) 3 East 62, 102 E.R. 520 (K.B.).
78Ibid., 523: "What inconvenience is there in suffering the party to allege his
gravamen, if he please, as consisting in a breach of duty arising out of an employment for
hire, and to consider that breach of duty as tortious negligence, instead of considering the
same circumstances as forming a breach of promise implied from the same consideration
of hire. By allowing it to be considered in either way, according as the neglect of duty or
the breach of promise is relied upon as the injury, a multiplicity of actions is avoided ... ."
19821 WABASSO

Like Govett v. Radnidge, Bretherton v. Wood (1821) 79 raised an

issue of joinder of parties. Again, it concerned a common carrier and his
duty imposed by the custom of the realm which, in the Court's view,
needed no contract to support it. Whether an action could also have been
maintained in assumpsit was said to be immaterial, the Court expressing
no opinion on the availability of such an action though observing that the
80
practice of pleading such cases in assumpsit was relatively modern.
The same approach is evident in cases not dealing with joinder of
parties. In Marshall v. The York, Newcastle and Berwick Railway Co.
(1851 ),81 a valet was held entitled to recover in case against the defendant
common carrier for the loss of his portmanteau, notwithstanding that the
tickets for the journey had been purchased by his employer. Privity of
contract was no defence for the railway company when the duty laid on it
was also imposed by the custom
2
of the realm, a point conceded also by
Winterbottom v. Wright.1
The plaintiffs freedom of choice, asserted in Govett v. Radnidge,
was not confined to common callings cases. Brown v. Boorman (1844),83
which reveals the primitive state of the law in respect of any general
principle uniting actions on the case, concerned an action on the case
against a broker for negligently contravening his instructions. The
defendant pleaded that the action should have been laid in assumpsit and
brought proceedings in error to arrest the jury's verdict in favour of the
plaintiff on the ground that the declaration contained insufficient
averments of the contract and its breach. The actual decision went in
favour of the plaintiff on the ground that enough of the contract was set
out in the declaration and that it did not matter that the action was
nominally in case. As for whether any duty at all could be laid against the
defendant in case, Lord Brougham expressed no opinion while Lord
Cottenham and Lord Campbell were prepared to go so far as to say that
case would lie where there was a breach of duty arising under an express
contract.8 4 This extraordinary proposition, that a breach of contract is

79(1821) 3 Brod. & B. 54, 129 E.R. 1203 (C.P.).

8
Ibid., 1206per Dallas C.J. See also Pozzi v. Shipton (1838) 9 Ad. & E. 963, 112
E.R 1106 (Q.B.).
8-(1851)
82
11 C.B. 655, 138 E.R. 632 (C.P.).
Supra, note 48.
83
Supra, note 76.
84
Lord Campbell is very explicit on this point, ibid., 1018-9: "But wherever there is a
contract, and something to be done in the course of the employment which is the subject of
that contract, if there is a breach of a duty in the course of that employment, the plaintiff
may either recover in tort or in contract." Lord Cottenham is not quite so clear, ibid.,
1018: "The contract was specially made; and.., the broker's duty must depend upon the
contract expressed or implied into which he entered... . It is said that the proper form of
 REVUE DE DROIT DE McGILL [Vol. 27

tantamount to a tort, is far from being the law even today 5 though it
might be said to foreshadow the rise of the duty of care in negligence.
Apart from Brown v. Boorman, the cases in the first half of the
nineteenth century reveal no trace of a tortious duty of care arising in a
contractual context and outside the common callings. Decisions later in
the century, however, begin to point the way. Thus in Foulkes v. The
Metropolitan Railway Co. (1879),86 the plaintiff, having purchased his
ticket from another railway company, was injured in descending from the
defendant company's train. The defendant was negligent in employing
unsuitable rolling stock which necessitated too great a descent onto the
platform. The plaintiff brought an action in negligence against the
defendant which denied any contractual link with the plaintiff and
pleaded that its failure to replace the unsuitable rolling stock was in the
nature of an omission for which it could be impleaded only in contract.
No mention is made in the case of any status possessed by the defendant
as a common carrier. This can be attributed to the ease with which a case
of common callings liability could be dressed up as implied contract and
to the concomitant practice of dropping particulars of the defendant's
status from the plaintiff's declaration. 87 Hence the decision, like the
pleadings in cases similar to this, is studiously vague as to the nature of
the plaintiff's action. The majority of the Court, however, seems to have
regarded the defendant's duty as arising from an implied contract to
exercise care when the defendant accepted the plaintiff on its train, 8
though it was quite prepared to tolerate the laying of the action in
negligence. But Bramwell L.J. found the defendant liable on the basis of
"that duty which the law imposes on all, namely, to do no act to injure
another"8 9 - an obvious straw in the wind.
The same inkling of a general tortious duty of care is presented by the
judgment of Blackburn J. in Austin v. The Great Western Railway Co.90
(1867), where an infant, whose carriage should have been paid for by its

proceeding is by an action of assumpsit, and not an action on the case. The cases...
disprove that proposition altogether, and.., this is a proper remedy where there are duties
imposed upon the party, though they are imposed by an express contract, and are not what
are called the ordinary duties imposed on brokers as such."
'8Pererav. Vandiyar [1953] 1 W.L.R. 672 (C.A.); Chapman v. Honig [19631 2 Q.B.
502 (C.A.). The tort of intimidation in its two-party form could well undermine the
position taken by these cases. See Central Canada Potash Co. v. The Government of
Saskatchewan [1979] 1 S.C.R. 42.
86(1879) L.R. 4 C.P.D. 267 (Div. Ct), affd (1880) L.R. 5 C.P.D. 157 (C.A.).
87
See, e.g., Pozzi v. Shipton, supra, note 80.
"The consideration problem presents difficulties for this line of analysis.
89
Supra, note 86, 159 (C.A.).
9(1867) L.R. 2 Q.B. 442.
19821 WABASSO

mother, was injured by the defendant's negligence. While the majority

was prepared to allow the infant to recover under the defendant's contract
with its mother, Blackburn J. ruled in favour of liability on the different
ground that "the right which a passenger by railway has to be carried
safely, does not depend on his having made a contract, but that the fact of
his being a passenger casts a duty on the company to carry him safely". 91
This case again makes no mention of the defendant's status, perhaps for
the additional reason that a common carrier's liability arises when
carriage takes place for reward, a problem in the instant case where no
fare had been paid for the child. But Austin, like Foulkes,92 points to the
evolution of a duty of care which is no longer confined to the old
categories of the common callings. This in turn heralds an increasing
degree of contract and tort overlap, a phenomenon viewed with tolerance
by the cases so far reviewed.

B. The County Court Costs Cases

The existence of overlapping regimes of liability, established in the
cases surveyed above, was already under a remote threat from a develop-
ment starting some years before the decisions in Austin and Foulkes. It
began with the Small Debts Act, 184693 which, together with its
successor legislation, required English courts for more than a hundred
years afterwards to decide whether actions pursued in superior courts
were founded on contract or founded on tort. 94 If the damages fell below a
certain level, the plaintiff would either lose all entitlement to costs 95 or
have his costs assessed on the lower county court scale.9 6 Had the
legislature seen fit to enact the same minimum damages figure for both
contract and tort, the common law would have been spared much
fascinating case law: unfortunately, it enacted a lower figure for tort than
for contract so that it paid plaintiffs recovering damages between the tort
and contract minima to claim they were suing in tort.

91
92
Ibid.,
445-6.
Supra, note 86.
939 & 10 Vict., c. 95.
94
Section 129; County Court Extension Act, 1850, 13 & 14 Vict., c. 61, s. 11
(distinction between (a) covenant, debt, detinue and assumpsit; and (b) trespass, trover
and case); County Courts Act Amendment Act, 1867, 30 & 31 Vict., c. 142, s. 5 (actions
founded on contract and on tort); County CourtsAct, 1888, 51 & 52 Vict., c. 43, s. 116;
County Courts Act, 1919, 9 & 10 Geo. V, c. 73, s. 11; County Courts Act, 1934, 24 & 25
Geo. V, c. 53, s. 47. The costs rules for contract and tort actions were merged by the
County Courts Act, 1959, 7 & 8 Eliz. II, c. 22, s. 47.
"This was the case for the pre-1888 statutes, ibid.
96Both possibilities were available under the 1888 and successor statutes, supra, note
94, depending on the damages actually recovered.
 Mc GILL LAW JOURNAL [Vol. 27

This legislation encouraged the belief, at least in this context of

county court costs, that a cause of action could be classified as one thing
or the other - contractual or tortious. 97 The earlier cases in particular,
however, clearly recognized that there were two separate questions: first,
whether the existence of a contract between the parties precluded the
existence of a duty which could be vindicated in an action on the case or
in tort, in other words, whether the plaintiff could choose between
overlapping liabilities; and secondly, according to which of the two extant
forms of liability should the cause of action be characterized for the
purpose of the legislation. As will be shown, there is no real disagreement
in the county court costs cases on the first question: the plaintiff was in
principle free to elect to frame his action either in contract or in tort. On
the second question, however, the cases divide with the majority taking
the view that the cause of action is founded on tort if a duty exists in tort
as well as in contract.
The reasoning in these cases is disappointing: the courts are united in
holding that a cause of action is founded on tort or on contract as the case
may be if in substance it possesses that character. What this test of
substance means is not easily to be gleaned from the cases. Nor is there
any analysis in either line of cases as to why the plaintiff or the defendant
should be favoured in the application of the costs rule. The majority of the
cases simply assume without argument that if a tortious action is
available, the action is in substance tortious, perhaps thereby reflecting
inarticulately the sentiment that in some cases contract is a relationship
grafted on to a residual base of tortious liability.9"
In Legge v. Tucker (185 6), 99 the plaintiff recovered damages against
a livery stable keeper for his failure to take proper care of the plaintiffs
horse which was kicked by other animals. The Court of Exchequer held
that the plaintiffs action lay in assumpsit so as to deny him the costs of
his action. It should, however, be noted that the defendant was not
exercising one of the common callings and that the Court clearly believed
that no action lay at all in case. 100 The plaintiff was therefore unable to
overcome the first hurdle requiring him to establish the existence of

97
In Taylor v. The Manchester, Sheffield and Lincolnshire Railway Co. [1895] 1
Q.B. 134, 138 (C.A.), Lindley L.J. recognized the artificiality of this choice: "Very often
a cause of action may be treated either as a breach of contract or as a tort. But here we are
compelled to draw the line hard and fast and put every one of the actions into one class or
the other."
98
See, e.g., Burnett v. Lynch (1826) 5 B. & C. 589, 108 E.R. 220, 227 (K.B.) per
Littledale J.
99(1856) 1 H. & N. 500, 156 E.R. 1298 (Exch.).
'"0 The case dates the immaturity of any general attempt to posit negligence liability
outside the common callings.
19821 WABASSO

tortious liability; consequently, the Court was spared the task of

classifying the action as contractual or tortious under the legislation.
According to Pollock C.B.: "Where the foundation of the action is a
contract, in whatever way the declaration is framed, it is an action of
assumpsit; but where there is a duty ultra the contract, the plaintiff may
declare in case." 10' 1 Alderson B. stated: "The right of the plaintiff
to sue at all depends on a contract, and consequently it is an action of
contract."'10 2 Watson B.'s judgment is to the same effect: "Here a
contract is stated by way of inducement, and the true question is,
whether, if that were struck out, any ground of action would remain:
Williamson v. Allison' 3 .... There is no duty independently of the
'0 4
contract, and therefore it is an action of assumpsit.'
Legge v. Tucker, the first reported case on the county court
provision, is therefore no authority on the characterization of a cause
of action as contractual or tortious where there is overlapping liability.
There was no duty at all established in tort: this is the significance of
Watson B.'s reference to a duty arising "independently" of a contract, a
point which should be noted with care in view of the later difficulties
caused, particularly in Canada, by the notion of "independent" torts. 05
Another factor to be borne in mind in considering Watson B.'s choice of
language is that it can be regarded as a calculated attempt to scotch the
proposition put forward in Brown v. Boorman10 6 and referred to above,
that a breach of contract was per se a tort.
Tattan v. The Great Western Railway Co. (1860)107 concerned the
liability of a common carrier who lost a bale of canvas. The Court
observed that a duty was imposed on the carrier independently of the
contract by the custom of the realm. Furthermore, the plaintiff had
elected to frame his action in tort, thereby securing his costs. The matter
was taken further in Taylor v. The Manchester, Sheffield and
Lincolnshire Railway Co. (1895)10 where the plaintiff s thumb was
crushed when a servant of the defendant negligently closed the carriage
door. Though the Court made no reference to the status of the defendant,

'0 1Supra, note 99, 1299.

1lIbid.
10(1802) 2 East 446, 102 E.R. 439 (K.B.). The case concerned an allegation of
scienter in a warranty action about the unfitness of a quantity of wine. Knowledge of the
unfitness was held to be unnecessary to establish liability, whether the action were based
on case
04
or assumpsit, but if averred in case it would have to be proved.
1 Supra, note 99, 1299.
05
' 1nfra, note 161 and accompanying text, et seq.
1°6Supra, note 76; see also, supra, note 85 and accompanying text.
107(1860) 2 E. & E. 844, 121 E.R. 315 (Q.B.).
0
"8 Supra, note 97.
 REVUE DE DROIT DE McGILL [Vol. 27

it found that there had been a misfeasance which could be sued on in the
absence of a contract. A.L. Smith L.J. made it very clear that the plaintiff
had the option of declaring either in contract or in tort 0 9 but that, for the
purpose of the legislation, the substance of the action had to be
considered. Accordingly, the defendant's major argument that the
plaintiff's statement of claim was contractual in form fell down, though
this decision, like so many others, fails to clarify the meaning of the
substance theory. One is, however, left with the suspicion that a cause of
action is substantially tortious if the plaintiff says it is, though he is not
estopped by the state of his pleadings in making this assertion.
Kelly v. The Metropolitan Railway Co. (1895)110 concerned a
passenger injured when his train ran into a station wall. Again, the Court
assumed that the existence of a separate duty which needed no contract to
support it made the action in substance tortious. Emphasis is again laid
on the plaintiffs free election and on the prevalence of substance over
form. Thus, Lord Esher M.R. said: "At the present time a plaintiff may
frame his claim in either way, but he is not bound by the pleadings, and if
he puts his claim on one ground and pursues it on another, he is not now
embarrassed by any rules as to departure.""' Kelly is also significant for
rejecting the argument that, if the defendant's negligence consisted of an
omission, a nonfeasance instead of a misfeasance, it was to be considered
as founded on contract It was the defendant's contention that the driver's
negligence lay in his omission to turn off the steam. A.L. Smith L.J.
stressed that, regardless of how the negligence was characterized, if a
duty apart from the contract existed, the action was in tort for the purpose
2
of the legislation.'
Later cases like Turner v. Stallibrass(1898),'" which concerned the
bailment of a horse for agistment, and Sachs v. Henderson (1902), 4
where a landlord wrongfully removed fixtures before a tenant took up
occupancy under a lease, are in line with Taylor and Kelly. Both held the
action to lie in tort. The determination in these cases to give the plaintiff
his costs is particularly marked in Sachs since it is not at all easy to see
the source of the landlord's tortious liability. But what is apparent about
later cases in the series is that, by virtue of their elliptical reasoning, they
fostered the attitude that if a cause of action was located in tort it could
not also be contractual and vice versa. The failure of this whole line of

109 Ibid., 139-40.

'0[1895] 1 Q.B. 944 (C.A.).
'Ibid., 946.
"'Ibid., 947.
"3[18981 1 Q.B. 56 (C.A.)
"4[1902] 1 K.B. 612 (C.A.)
19821 WABASSO

cases to give meaning to the substance test encouraged the tendency to

believe simply that a cause of action was tortious because it was not
contractual. Even the substance test itself could be explained away as
saying nothing more than that the mere form of the pleadings was not
determinative.
Jarvis v. Moy, Davies, Smith, Vandervell and Co. (1936)115 is one
of the most important twentieth century cases on the distinction between
tort and contract. The plaintiff suffered financial loss in consequence of
his stockbroker's failure to abide by instructions as to the purchase of
certain shares. On this occasion, the Court concluded that the action was
founded on contract but the decision is not at all difficult to reconcile with
earlier decisions in this sequence of county court costs cases: the facts,
particularly the plaintiff's financial loss, were most unpromising for the
inference of any tortious duty. Thus, according to Greer L.J.: "[I]t is only
by proving that a term of the contract was broken that any cause of action
can be established. ' 116 The following oft-quoted dictum by the same
1
judge is quite in line with decisions going back to Legge v. Tucker:" 7
"[W]here the breach of duty alleged arises out of a liability independent-
ly of the personal obligation undertaken by contract, it is tort, and it may
be tort even though there may happen to be a contract between the
parties, if the duty in fact arises independently of that contract""' 8
Jarvis, therefore, is no authority denying the existence of overlapping
liability since the plaintiff never succeeded in making out a cause of
action in tort, nor does it lend support to the paramountcy of contract
over tort. Indeed, Greer L.J.'s latter dictum appears to be the product of
the elliptical reasoning in the nineteenth century cases in so far as it
would deny any contractual liability where tortious liability existed.
Jarvis also fails to yield support for anything like a merger principle
whereby tortious duties automatically merge in a contract as soon as it is
concluded. One of the plaintiffs arguments, discussed in the case, is
worthy of note: he sought to establish that a stockbroker could be
regarded, like the ferryman and innkeeper of old, as exercising a common
calling. The object of the argument was to establish a duty imposed by
law. The Court, however, declined to add stockbrokers to the list of
common callings, but could just as easily have said that any attempt to
apply or extend common callings liability to cases of pure economic loss
could not have survived a number of decisions in the last quarter of the
nineteenth century" 9 imposing severe restrictions on recovery in tort for
.5[1936] 1 K.B. 399 (C.A.).
1161bid., 405.
"'7Supra, note 99.
"Supra, note 115, 405.
119Supra, note 67 et seq. and accompanying text.
 Mc GILL LAW JOURNAL [Vol. 27

such loss. It would, moreover, be tantamount to turning the clock back to

the period before Hadley v. Baxendale120 when it had not become the
practice to plead such losses in implied contract.
Jackson v. Mayfair Window Cleaning Co. (1952)121 applied both
Greer L.J.'s independent tort dictum and the substance test set out in
cases like Turner v. Stallibrass.122 Barry J. held an action for damages
was founded on tort where it concerned a firm of cleaners through whose
negligence a chandelier fell to the ground some months after a cleaning
operation. The significance of the case lies in the defendant's unsuccess-
ful attempts to persuade the Court that a tortious duty independent of
contract could not exist outside the common callings. The following
dictum of Barry J., it is submitted, faithfully recounts the developments in
the cases discussed above:
The facts in Steljes' case and Jarvis's case were quite different from the present one.
In the absence of a contract, the architect, in the one, was under no duty to supervise
the erection of the house, nor was the stockbroker, in the other, to buy or sell shares
on any particular date or at all. The complaint in each case arose from the breach of a
positive obligation imposed by contract and by contract only. Very different
considerations would have arisen in the latter case if, for example, the stockbroker
23
had negligently burned some valuable document belonging to the plaintiff.
Canadian cases on the contract and tort distinction were few in
number until recent years. There are, however, at least two significant
decisions in areas similar to those under discussion in the English county
court costs cases. In Tetef v. Riman (1926),124 an action was brought by
a guest against a boarding-house keeper for the loss of certain valuables
entrusted to the latter. One of the issues was whether the successful
plaintiff was entitled to his costs on the county court scale or on the lower
division court scale 25 and this in turn depended on whether the action
was to be regarded as contractual or tortious. In the end, the Ontario
Appeal Division followed the English cases dealt with above, though
Riddell J.A. expressed a degree of dissatisfaction 26 with their reasoning
and Middleton J.A. stated that, had the question been one of first
impression, he would have held the action to be in contract so as to dis-
courage the bringing
27
of an action in the superior of the two courts with its
heavier costs.'
20
Supra, note 73.
-2[1952] 1 All E.R. 215 (K.B.).
122 Supra, note 113. See also Edwards v. Mallan [1908] 1 K.B. 1002 (C.A.).
123 Supra, note 121, 218.
.'(1926) 58 O.L.R. 639 (App. Div.)
'2The County Courts Act, R.S.O. 1914, c. 59, s. 40 (d); The Division Courts Act,
R.S.O.
26
1914, c. 63, s. 61.
1 Supra, note 124, 647.
127Ibid., 642.
19821 WABASSO

Williams v. Fox Johnson and Co. (1942)128 was concerned with the
jurisdictional limits of a division court. The upper limit was higher in the
case of contract than in tort129 so it paid the plaintiff to argue that the
action was contractual in nature, a reversal of the position taken by
plaintiffs in all the other cases of this type. Without pausing to reflect on
the difference between this case and the costs cases or to consider
whether their dominant philosophy was to give the plaintiff his choice,
Henderson J.A. mechanically applied a dictum of Middleton J.A. in
Tetefv. Riman 3 ° and held the action to be a tortious one. The plaintiff in
this bailment case, having elected to bring his action in. a division court,
was therefore confined to the lower level of recovery appropriate in tort
cases.
As mentioned above, there is a minority line of county court costs
cases that does not fit in with the rationalization of the majority cases
given above. Thus, in Baylis v. Lintott (1873),131 an action against a
hackney carriage owner for insecurely fastening luggage which was lost,
the Court held that the action was contractual. All three judges found for
the defendant on the formalistic ground that the case was pleaded in
contract: there is nothing apart from this in the decision suggestive of the
Court's preference for contract over tort. Fleming v. The Manchester,
Sheffield, and LincolnshireRailway Co. (1878)132 concerned the loss of
a parcel of goods. Again, the decision went in favour of the defendant on
the ground that the action was pleaded in contract, though the portions of
the statement of claim reproduced in the report hardly point to this
conclusion.
Baylis and Fleming seem to imply the existence of overlapping
regimes of liability in so far as the plaintiff loses because of the state of
his pleadings, but they give no reason for the paramountcy of contract if
one reads them as using a formalistic ground as a pretext for reaching a
result they desired anyway. Even though it is difficult to locate the logic
inspiring them, these two cases remind us that the majority decisions in
this area appear to be motivated, albeit mutely, by the conviction that a
successful plaintiff should not be denied his costs just because there also
happens to be a contract between the parties.
Another lesson that can be drawn from Baylis and Fleming is that it
is dangerous to transplant cases dealing with a specific problem into the

128[19421 O.W.N. 527 (C.A.).

'"The Division Courts Act, R.S.O. 1937, c. 107, s. 54.
"'Supra,note 124.
131(1873) L.R. 8 C.P. 345.
32(1878) 4 Q.B.D. 81 (C.A.).
 REVUE DE DR OIT DE Mc GILL [Vol. 27

treatment of radically different issues: a court's attitude to the contract

and tort division is likely to be coloured by the particular issue before it.
The authorities relied on in these cases were Morgan v. Ravey (1861)133
and Alton v. The MidlandRailway Co. (1865).134 Morgan concerned an
action against the estate of a deceased innkeeper for loss caused when
goods were stolen owing to his negligence. If the action were contractual,
it could be laid against his executors; if tortious, the action died with the
innkeeper. Unlike the county court costs plaintiffs, the plaintiff here
argued that the action was contractual. The Court simply stated that the
action could be prosecuted in contract: it did not say that the innkeeper, if
alive, could not have been sued in tort on the custom of the realm. Like
the county court costs cases, Morgan gives the plaintiff his choice.
Alton is an even clearer example of the perils of transplantation. It
concerned an action by a brewery against a carrier for the loss of the
services of an employee injured by the carrier's negligence. It was
assumed by the Court that the plaintiff's atctio per quod servitium amisit
could only be asserted if the employee could have laid a claim against the
carrier in tort. The Court found in favour of the carrier and was heavily
influenced by Winterbottom v. Wright'3 5 in its belief that the plaintiff was
seeking to take the benefit of the carriage contract to which he was not
privy. 13 6 Indeed, the case is best read as something of an over-exuberant
response to the earlier decision and perhaps also as reflecting a certain
resistance to the extension of the actio per quod from domestic to
commercial employees. 137 Alton also contains a number of observations
somewhat out of line with the mainstream of authorities on the contract
and tort division. Thus Willes J. states that the plaintiff's power to elect
between contract and tort is a fiction, 3 " though he does hedge this
somewhat by saying that it is not for the employer to exercise the
employee's power of election. 39 Erie C.J. also articulates the view that
an action is in substance contractual if a contract is part of the history of

133(1861) 6 H. & N. 265, 158 E.R. 109 (Exch.).

134(1865) 19 C.B. (N.S.) 213, 144 E.R. 768 (C.P.).
"'5Supra, note 48.
136According to Erle C.J., supra, note 134, 779: "The liabilities of parties by reason of
their contracts can be foreseen. As a general rule, they are under their own control. The
liabilities arising out of them are bounded by the considerations affecting the two
contracting parties. Upon that general view I found my opinion that for the consequential
damages claimed on the present occasion the plaintiffs cannot sue."
13"For English law, the point was authoritatively settled much later in L.A. C. v.
Hambrook [1956] 2 Q.B. 641 (C.A.). But Hambrook was not followed inNykorak v. A.-
G. Canada [1962] S.C.R. 331 (loss of soldier's services).
1"'Supra, note 134, 779.
139Ibid.
19821 WABASSO

the action. 140 In other words, if a contract is circumstantially, as opposed

to legally, necessary to maintain the action, the action is in substance
contractual. Like Willes J., Erie C.J. was therefore able to dismiss the
argument that the defendant was a common carrier and thus incurred
tortious liability to the employee. Erie C.J.'s argument, however, is quite
4 142
inconsistent with the reasoning in decisions like Taylor' 1 and Kelly
and should be read within its particular context. As will be seen, the
argument is at the root of the difficulties experienced in this century,
particularly in Canada, in locating the division between contract and tort.
1 43
C. The Legacy of the County Court Costs Cases
A case holding that an action is founded on contract because there is
no extant duty of care - Legge v. Tucker144 for example - is open to
misinterpretation. The subject of solicitors' liability provides an excellent
illustration of this. In Bean v. Wade (18 85),14' a large sum of money was
lost to a trust fund by the professional negligence of solicitors. Dealing
with a limitation of actions problem, the Court held that the right of action
was contractual. Given the limits on tortious liability for economic loss,
any other result would have been surprising. When Bean v. Wade
surfaced in Groom v. Crocker (1939),146 it was taken as support for the
blanket proposition that the liability of solicitors is invariably contractual.
It is one thing to assert this when there is no or little prospect of a tortious
action at all: it is quite another to deny the plaintiff any election at all on
the ground that, as a matter of status, solicitors can only be sued in
contract. The Court in Groom v. Crocker ignored a dictum of Tindal C.J.
in Boorman v. Brown147 and the decision of the House of Lords in

140Supra, note 134, 778.

14'Supra, note 97.
142Supra, note 110.
"4Attributable to county court legislation is the tendency to believe that contract and
tort are alternative, rather than frequently cumulative or overlapping, sources of liability.
Chesworth v. Farrar[1967] 1 Q.B. 407, a case dealing with bailment in the context of
survival of actions and limitations, shows some evidence of this tendency.
144Supra, note 99.
.45(1885) 2 T.L.R. 157 (C.A.).
146[1939] 1 K.B. 194 (C.A.).
.41(1842) 3 Q.B. 511, 114 E.R. 603, 608: "That there is a large class of cases in which
the foundation of the action springs out of privity of contract between the parties, but in
which, nevertheless, the remedy for the breach, or non-performance, is indifferently either
assumpsit or case upon tort, is not disputed. Such are actions against attorneys, surgeons,
and other professional men, for want of competent skill or proper care in the service they
undertake to render. actions against common carriers, against ship owners on bills of
lading, against bailees of different descriptions: and numerous other instances occur in
which the action is brought in tort or contract at the election of the plaintiff."
 Mc GILL LAW JOURNAL [Vol. 27

Nocton v. Ashburton148 in propounding the curious and inverted

anachronism that solicitors, unlike innkeepers, can be sued only in
contract.
Bold rules inspire confidence and Groom v. Crocker was followed in
a number of later English cases, two of which blunted the impact of the
case by extending the scope of damages recovery in contract to something
like the tortious range. 149 Groom v. Crocker was also followed by the
Ontario Court of Appeal in Schwebel v. Telekes (1967),15o which
concerned limitation of actions and a solicitor's professional negligence.
The judgment of the Court, delivered by Laskin J.A. (as he then was),
distinguishes the Hedley Byrne15 ' decision and lays emphasis on the fact
that, circumstantially, only a contract could produce a duty owed by the
defendant to the plaintiff, which was the argument put forward by Erle
C.J. in Alton:' 52 "The only circumstance that could bring any duty of the
defendant to the plaintiff herein into operation was her contracting for the
defendant's assistance." ' 153 In the end, the classification of the action was
not decisive since the limitations problem would have been disposed of in
the same way whether the action was labelled as contractual or tortious.
The general question of a solicitor's liability was not canvassed by the
Supreme Court of Canada in the later case of Smith v. McInnis
(1978),154 though Pigeon J., dissenting on the issue of whether insurance
counsel had actually been negligent, stated his belief that solicitors could
be sued only in contract.'55
Meanwhile, tortious developments in the area of economic loss and
negligent misstatement were giving the lie to the forgotten premise on
which the Groom v. Crocker rule was based, namely, that given the
circumstances in which solicitors are negligent and the type of loss they
cause, solicitors exercising their office are not promising tortious
defendants. This point seems to have been missed completely by Diplock
L.J. (as he then was) in Bagot v. Stevens, Scanlan & Co. (1966),56
which concerned limitation of actions and the liability of architects who
were negligent in supervising the laying of drains. Though the actual

148[19141 A.C. 932 (H.L).

149 Clark v. Kirby-Smith [1964] Ch. 506; Cook v. Swinfen [1967] 1 W.L.R. 457
(C.A.); Heywood v. Wellers [1976] Q.B. 446 (C.A.).
15[1967] 1 O.R. 541 (C.A.).
"'Supra, note 61.
"'2Supra, note 134.
"'Supra, note 150, 543.
15411978] 2 S.C.R. 1357.
1551bid., 1377.
15611966] 1 Q.B. 197.
1982] WABASSO

decision did not turn on whether the action lay in tort or in contract,
Diplock L.J. stated his opinion that the architects' liability was contrac-
tual on the ground that they were sued for failing to do what they agreed
to do. On the subject of independent torts, he had this to say:
I accept that there may be cases where a similar duty is owed both under a contract
and independently of contract. I think that upon examination all those will turn out to
be cases where the law in the old days recognised either something in the nature of a
status like a public calling (such as common carrier, common innkeeper, or a bailor
and bailee) or the status of master and servant.... I do not think that that principle
applies to professional relationships of the kind with which I am concerned here,
where someone undertakes to exercise by contract his professional skill.... -17
This represents a clear attempt to fix the twentieth century division
between contract and tort by reference to the nineteenth century
boundaries of tortious liability and is a perfect example of the fallacious
use of the historical method. Besides lumping together a number of
relationships which do not have a great deal in common, this dictum
ignores altogether the rise in modem times of the tort of negligence and
compares unfavourably with Jackson v. Mayfair Window Cleaning
Co.,"" discussed above.
With the wisdom of hindsight it is possible to say that developments
in negligent misstatement, which exposed certain professionals to tortious
liability for the first time, would inevitably demolish the proposition
forwarded by cases like Bagot that, apart from certain anachronistic
categories, a contractual relationship between parties excludes the
possibility of a tortious duty. This proposition was swept aside, or more
accurately totally ignored, in Esso Petroleum Co. v. Mardon (1976),1 51 a
case dealing with a negligent misstatement concerning the expected
volume of business of a service station, where the Court held the
appellants liable both in tort and in contract for breach of a warranty that
care had been taken in formulating the prediction. The relationship
between the parties of oil company and station tenant did not fit any of
the anachronistic categories mentioned by Diplock L.J. in Bagot. Esso
Petroleum was later followed in Batty v. MetropolitanProperty Realisa-
tions Ltd (1 978),160 where the plaintiff acquired a defective property on a
long lease from the defendant company. Liability on the part of the
defendant existed both in tort and in contract and the plaintiff was not
even put to his election, being permitted to have judgment entered in both
categories of liability.

15Ibid., 204-5.
'"8Supra, note 121.
159[1976] Q.B. 801 (C.A.).
160[ 1978]Q.B. 554 (C.A.).
 REVUE DE DROIT DE McGILL [Vol. 27

The development set in train by Esso Petroleum has recently been

rationalized by the monumental judgment of Oliver J. in Midland Bank
Trust Co. v. Hett, Stubbs & Kemp (1978),161 which marks a return to
first principles by treating as an independent tort one that is legally, not
circumstantially, capable of arising in the absence of a contract. It also
underlines the plaintiff's freedom to elect between tort and contract and
explores the flawed logic of the rule that solicitors can be sued only in
contract. The case concerned a solicitor's negligence in failing to register
as a land charge an option to buy a farm which was alienated to a third
party before the option could be exercised. A limitations problem arose
but Oliver J. (as he then was) took the view that the action was not
statute-barred, whether the solicitors were sued in contract or in tort. The
case is particularly significant in Canada for the way Oliver J. refuted the
argument that the existence of a contract between the parties necessarily
disposes of tortious liability. Referring to the Hedley Byrne1 62 principle of
liability for negligent misstatement, the learned judge stated:
The principle was stated by Lord Morris of Borth-y-Gest as a perfectly general one
and it is difficult to see why it should be excluded by the fact that the relationship of
dependence and reliance between the parties is a contractual one rather than one
gratuitously assumed, in the absence, of course, of contractual terms excluding or
restricting the general duties which the law implies. Logically, as it seems to me, this
could be so only if there is read into every contract not only an implied term to
employ reasonable care and skill in the performance of the contract, but a further
term to the effect that the contract shall be the conclusive and exclusive source of all
duties owed by one party to the other to the exclusion of any further or more extensive
6
duties which the general law would otherwise impose.' '
This dictum is particularly apposite when the decision of the Supreme
Court of Canada in J. Nunes Diamonds Ltd v. Dominion Electric
Protection Co. (1972)164 is considered.
The plaintiff was a diamond merchant whose safe was protected by
the defendant's alarm system. The contract between the parties contained
a limitation clause whereby liability was fixed at fifty dollars for any case
of failure to perform the protection service. The contract also provided:
"No conditions, warranties and representations have been made by
Dominion Company, its officers, servants or agents other than those
endorsed hereon in writing." The plaintiff's safe was broken into and a
number of diamonds stolen. All three courts involved in the litigation
agreed that there had been no breach of contract: the system had
functioned properly but had been expertly bypassed by the burglars and

161[1979] Ch. 384.

162Supra, note 61.
163Supra, note 161, 411.
164[1972] S.C.R. 769.
19821 WABASSO

the contract did not guarantee that the system was burglar-proof. But the
plaintiff argued that certain post-contractual statements engaged the
defendant in tortious liability for negligent misstatement. On the facts,
however, his case was weak. One oral representation was given by an
unidentified representative of the defendant that "[e]ven our own
engineers could not go through the system without setting an alarm". The
second representation was contained in a letter addressed to a third party,
a copy of which was sent to the plaintiff, to the effect that, on the occasion
of an earlier robbery at another jeweller's, "[t]he system performed its
functions properly".
For the majority,16 s Pigeon J. gave judgment in favour of the de-
fendant. The defendant had not assumed any responsibility for its state-
ments. Moreover - and here Pigeon J.relied on the restrictive statement
of liability for negligent misstatement made by the Privy Council in
Mutual Life & Citizens' Assurance Co. v. Evatt (1971)166 - the
defendant company was not in the business of giving advice. But the
learned judge also took objection to what he regarded as an attempt to
exploit tortious liability so as to subvert an agreed risk allocation under
the contract and continued:
Furthermore, the basis of tort liability considered in Hedley Byrne is inapplicable to
any case where the relationship between the parties is governed by a contract, unless
the negligence relied on can properly be considered as 'an independent tort'
unconnected with the performance of that contract.... This is specially important
in the present case on account of the provisions of the contract with respect to the
assumed and the practical exclusion of responsibility for
nature of the obligations 67
failure to perform them.'
Going back to the words of Oliver J. quoted above, Nunes Diamonds
could quite easily have been decided on the ground that the contract
intentionally limited the tortious liability of the defendant that would
have been sufficient. But in going beyond that and articulating his
independent tort test, Pigeon J., like Laskin J.A. in Schwebel,168 and
unlike decisions such as Taylor 169 and Kelly, 170 was thinking in terms of
circumstantial, rather than legal, independence. Thus he said:

l65For the minority, Spence J., ibid., 781, simply declined to accept the argument that
a pre-existing contractual relationship couldperse foreclose tortious liability. Moreover,
in his view, the contract on its construction did not exclude or limit tortious liability.
166[1971] A.C. 793 (P.C. (Austl.)). It seems fair to say that, apart from Nunes
Diamonds, the Evatt case has received a very frosty reception in Canada. It was
interpreted out of existence, for example, by the Supreme Court of Canada in Haig v.
Bamford [1977] 1 S.C.R. 466, 480 per Dickson J.
'67Supra, note 164, 777-8.
"'Supra, note 150.
169Supra, note 97.
170Supra, note 110.
 McGILL LAW JOURNAL [Vol. 27

In my view, the representations relied on by appellant cannot be considered as acts

independent of the contractual relationship between the parties. This can be readily
verified by asking the question: Would these representations have been made if the
parties had not been in the contractual relationship in which they stood? Therefore,
the question of liability arising out of those representations should not be approached
171
as if the parties had been strangers, but on the basis of the contract between them.
Pigeon J. relied on only one case, 172 which was irrelevant, in formulating
his independent tort principle. In view of the authorities discussed above,
it is submitted that the principle is a heterodoxical one which was quite
73
unnecessary to the disposal of the issue at hand.1
Nunes Diamonds was distinguished by McKay J. in Sealand of the
Pacific Ltd v. Ocean Cement Ltd (1973),74 which concerned the
negligent misstatement of a supplier of cement, on the briefly stated
ground that the misrepresentation in question occurred some months
before the formation of the contract. This is certainly a convincing
argument against the circumstantial independence test formulated by
Pigeon J., though it would not meet the argument, criticized in Midland
Bank 175 but apparently not relied on in Nunes Diamonds, that tortious
rights automatically merge in any contract made between the same
parties. When the Sealand case was appealed to the British Columbia
Court of Appeal under the name of Sealand of the Pacific Ltd v. Robert
C. McHaffie Ltd (1974),176 the cement supplier's appeal was dismissed
and judgment was also entered for the first time against a firm of naval
architects for its negligent failure to make certain inquiries about the
cement. The judgment of the Court plainly rests the architects' liability in
contract: indeed, it is hard to see how a failure to make inquiries could be
the subject of Hedley Byrne liability. Seaton J.A., delivering the
judgment of the Court, followed Pigeon J.'s judgment in Nunes
Diamonds in concluding that the architects' liability was contractual and
pointed to the danger of changing the bargain made between the parties
by any finding of additional rights and duties. 177 One response to this
argument is to concede that tortious rights can be truly excluded or
limited by the contract but to deny that this automatically occurs

17'Supra, note 164, 778.

172Elder,Dempster& Co. v. Paterson,Zochonis & Co. [1924] A.C. 522 (H.L.) which
concerned the question whether shipowners were entitled to the protection of an exception
clause in bills of lading issued under a contract of carriage to which they were not privy.
17See the discussion of Pigeon J.'s judgment in Schwartz, Hedley Byrne and Pre-
ContractualMisrepresentations:Tort Law to the Aid of Contract?(1978) 10 Ottawa L.
Rev. 581, 587-92.
'74(1973) 53 D.L.R. (3d) 625 (B.C.S.C.).
175Supra, note 161.
.76(1974) 51 D.L.R. (3d) 702 (B.C.C.A.).
177Ibid., 705.
19821 WABASSO

whenever the parties are contractually bound. Another response is to

point out that there was no question on the facts of trying to establish a
tortious liability different from contractual liability, and consequently no
need to invoke any theory of circumstantially independent tort to deny the
existence of overlapping liability.
The Sealand litigation can therefore be regarded as giving only a
heavily qualified support to Nunes Diamonds since the trial judge's
distinction was not directly challenged by the Court of Appeal.
Subsequent decisions, however, would appear to spell the demise of
Pigeon J.'s independent tort principle. 178 Perhaps the most significant of
these cases is the decision of the Alberta Court of Appeal in Canadian
17
Western Natural Gas Co. v. Pathfinder Surveys Ltd (1980). 1
The case dealt with the negligent survey of a pipeline route and raises
the issue of the plaintiff's own contributory negligence in failing to realize
that the line was incorrectly plotted. The Court openly admitted the
existence of overlapping liabilities in contract and tort outside the
common callings and, following Oliver . in Midland Bank, it deftly
relied on the recent dictum of Lord Wilberforce in Anns v. Merton
London Borough Council (1977)180 that foreseeability of harm creates a
duty of care in negligence unless circumstances exist to justify negativing
or limiting that duty. Concluding that no such circumstances existed, the
Court held that the defendant surveyor owed the plaintiff a duty of care
despite the existence of a contract between them. The following extract
from the majority judgment of Prowse J.A. shows clearly how this was
done:
The Esso case and the statement of Lord Wilberforce in the Anns case demonstrate
the extension by the courts of the common law duty of care set out in Donoghue v.
Stevenson. We have the courts recognizing that such duty is not dependent upon
contract, although its consequences may be so limited, but is an independent duty
imposed by law in circumstances where there is a sufficient relationship of'proximity
and neighbourhood' between the wrongdoer and the person suffering damages.1"'
There could be no clearer adoption of a principle of legally, as opposed to
circumstantially, independent torts than this. Though hard to reconcile
with the words of Pigeon . in Nunes Diamonds, the judgment of Prowse

' 78The dictum has come under a great deal of pressure from cases like Walter Cabott
ConstructionLtd v. The Queen (1974) 44 D.L.R. (3d) 82 (F.C.T.D.); Dominion Chain
Co. v. Eastern Construction Co. (1976) 12 O.R. (2d) 201 (C.A.); Sodd Corp. v. Tessis
(1977) 79 D.L.R. (3d) 632 (Ont. C.A.); H.B. Nickerson & Sons Ltd v. Wooldridge
(1981) 115 D.L.R. (3d) 97 (N.S.S.C., App. Div.); Canadian Western Natural Gas Co.
v. Pathfinder Surveys Ltd (1980) 12 Alta L.R. (2d) 135 (C.A.).
179Ibid.
"'Supra, note 71, 751-2.
8
8'Canadian Western Natural Gas Co., supra, note 178, 145.
 REVUE DE DROIT DE McGILL [Vol. 27

J.A. gives due recognition to the expansion of the duty of care evident
since Donoghue v. Stevenson and returns the law on overlapping liability
in Canada to first principles. If the judgment does secure the future trend,
and if Pigeon J.'s aberrant judgment is treated reverently but
unanalytically as the source of a legally independent tort doctrine, then
Canadian and English law are aligned on the subject of overlapping
liability.

III. Overlapping Liability and Practical Problems

Overlapping liability emerges as an issue in a number of different
contexts.1 2 It has been demonstrated that the common law, for the most
part, has been tolerant of overlapping regimes of liability though the
suggestion has been made that the attitude of the courts to overlap is
influenced by the particular issue under consideration. Thus the county
court costs cases may be read as reflecting the view that, if the plaintiff
can base his claim on an action that will give him his costs, he should not
be denied them simply because his claim could have been asserted on a
different basis. The Alton' 8' case, on the other hand, which appears
inimical to overlap, is indicative of the courts' firm adherence to the
privity of contract principle and of their determination to prevent third
parties from obtaining contractual benefits.
In this section, overlapping liability will be reviewed in its practical
setting. The examples chosen will be limited in number. First of all, the
principle that the plaintiff has the untrammelled right to choose his action
will be scrutinized in the context of the defence of contributory negli-
gence. Secondly, it will be shown that a tendency exists in the common
law to reduce the significance of such choice by aligning contractual and
tortious rules. The example chosen to illustrate this will be remoteness of
damage.

A Contributory Negligence and the Plaintiff's Power of Election

This writer has argued elsewhere that a case can be made for
abridging the plaintiffs freedom of choice in the case of contributory
negligence: 8 4 the arguments in favour of this will not be rehearsed at

182
See Poulton, Tort or Contract (1966) 84 L.Q.R. 346; Guest, Tort or Contract?
(1961) 3 U. of Malaya L. Rev. 191. Other articles that can usefully be consulted on
overlapping liability are Morgan, The Negligent Contract-Breaker(1980) 58 Can. Bar
Rev. 299 and Fridman, The Interactionof Tort and Contract(1977) 93 L.Q.R. 422. See
also P. Winfield, The Province of the Law of Tort (1931).
183 Supra, note 134.
"84Bridge, Defective Products, Contributory Negligence, Apportionment of Loss and
the Distribution Chain: Lambert v. Lewis (1982) 6 Can. Bus. L.J. 184.
19821 WABASSO

length here. Winfield once wrote that the plaintiff's power to elect
between contract and tort should be unfettered except where this would
be inconsistent with a "substantive rule of the law" or "independent legal
rules". 185 Though no such rules have yet been formulated for contributory
negligence, it is submitted that there is a need for them.
The old rule in tort was that a plaintiff's contributory negligence was
a complete defence to an action based on the defendant's negligence:
without the plaintiff's own fault, the accident would not have happened. 186
Where the defendant's negligence was greater than the plaintiff's, this
rule produced injustice and was modified in the plaintiff's favour, first, by
the last opportunity rule and secondly, by a sophisticated offshoot of the
last opportunity rule referred to as the contructive last opportunity rule.
Accordingly, a negligent plaintiff could still recover in full if the
defendant had the last clear chance (last opportunity) of averting the
accident 87 or would have had that chance (constructive last opportuni-
ty) 8' but for the defendant's antecedent negligence.
Even in its mitigated form, the contributory negligence rule
compelled an all-or-nothing solution and was widely regarded as
unsatisfactory. English 9 and Canadian jurisdictions'"0 now have
legislation permitting the courts to apportion loss in the event of a
plaintiff's contributory negligence. This legislation has generally worked
well and is greatly to be preferred to the clumsy and absolutist common
law rule.
Unlike tort, contract law has never permitted the defence of contri-
butory negligence. Indeed, the basic rule runs quite counter to the old

18'Winfield, supra, note 182.

'Butterfield v. Forrester(1809) 11 East 60, 103 E.R. 926, 927 (K.B.)per Bayley J.:
"The plaintiff was proved to be riding as fast as his horse could go... through the streets of
Derby. If he had used ordinary care he would have seen the obstruction; so that the
accident appeared to happen entirely from his own fault."
87Davies v. Mann (1842) 10 M. & W. 546, 152 E.R. 588 (Exch.) (defendant driving
negligently down the highway could have avoided the plaintiff's donkey which had
previously been negligently tethered in the highway).
8"British Columbia Electric Railway Co. v. Loach [1916] 1 A.C. 719 (P.C.)
(defendant could have applied brakes to avoid wagon on railway crossing but for negligent
maintenance of brakes).
'89Law Reform (Contributory Negligence) Act, 1945, 8 & 9 Geo. VI, c. 28.
"'9ContributoryNegligence Act, R.S.A. 1980, c. C-23; Negligence Act, R.S.B.C.
1979, c. 298; The Tortfeasors and Contributory Negligence Act, R.S.M. c. T-90;
ContributoryNegligence Act, R.S.N.B. 1973, c. C-19; The ContributoryNegligence Act,
R.S. Nfld 1970, c. 61; Contributory Negligence Act, R.S.N.S. 1967, c. 54; Negligence
Act, R.S.O. 1980, c. 315; Contributory Negligence Act, R.S.P.E.I. 1974, c. C-19; The
Contributory Negligence Act, R.S.S. c. C-31; Contributory Negligence Ordinance,
R.O.N.W.T. 1974, c. 16; Contributory Negligence Ordinance, R.O.Y.T. 1958, c. 21.
 Mc GILL LAW JOURNAL [Vol. 27

tortious defence in that a plaintiff is entitled to recover whenever he can

establish that the defendant's breach of contract was a cause of the injury
he suffered. 191 Nevertheless, a number of contractual doctrines can be
applied so as to scale down or eliminate a plaintiff's entitlement to
recover damages for breach of contract.
The doctrine of factual causation, frequently applied in tandem with
the remoteness of damage rule, can be invoked to deny recovery to a
plaintiff whose fault contributes to his injury. Mowbray v. Merryweather
(1895)192 was for a long time the leading authority. In that case, the
plaintiff's failure to discover the defect in a chain supplied by the
defendant in breach of warranty was held not to debar him from
recovering damages: the accident caused by the chain was still a natural
consequence of the breach of warranty and within the contemplation of
the parties as a consequence of breach at the time of the contract. In
Lambert v. Lewis (1981),1 93 a farmer was involved in an accident when
his trailer came adrift from his vehicle. The towing-hitch had failed but
proper maintenance would have revealed its defective state to the farmer.
Though the English Court of Appeal held that the chain of causation
between the breach of warranty and the accident had not been broken so
that the seller remained liable, 19 its decision was reversed by the House
of Lords. 195 The primary reason given was that there had been no breach
of warranty by the seller1 96 but a secondary reason was that any breach of
warranty by the seller could no longer be said to be causally relevant in
view of the farmer's subsequent negligence. 197
Another example of contract law taking account of the plaintiff's fault
is the doctrine of mitigation of damages which requires plaintiffs to take
reasonable steps to limit the loss caused by a breach of contract and
denies damages attributable to a failure to mitigate. Sometimes the
doctrine will operate so as to scale down recovery in such a way as to
bring about a result akin to apportionment. When, for example, a seller
fails to deliver goods on a rising market and the buyer delays entering the
market to purchase substitute goods, the buyer will be entitled only to the
difference between the contract price and the market price prevailing at

19'Lambert v. Lewis [1980] 2 W.L.R. 299, 323 (C.A.)per Lawton L.J., rev'd, semble
on a different assessment of the facts, [1981] 1 All E.R. 1185 (H.L.); A.S. James Pty Ltd
v. Duncan [1970] V.R. 705, 723 (S.C.) per McInerney J.; Simonius Vischer & Co. v.
Holt & Thompson, [1979] 2 N.S.W.L.R. 322, 340 (C.A.) per Samuels J.A.
192[1895] 2 Q.B. 640 (C.A.).
193Supra, note 191.
194
1bid.
1951bid.
196Supra, note 191, 1191 per Lord Diplock.
"971bid. See the criticism of this decision in Bridge, supra, note 184.
19821 WABASSO

the date of breach: he will not be entitled to the additional market loss
caused by his own delay. 198 More frequently, mitigation of damages will
produce an all-or-nothing solution. A recent example is the wretched
decision of the New Brunswick Appeal Division in Caines v. Bank of
Nova Scotia (1979)199 where the Bank, which had negligently and in
breach of contract failed to pay a fire insurance premium, was held liable
to pay only nominal damages when the plaintiff's uninsured house burned
down. The impoverished plaintiff, though making ineffectual inquiries of
the Bank as to the payment of the premium, had failed to follow the
Court's counsel of perfection by securing additional insurance on his own
behalf: he had therefore failed to mitigate the effects of the Bank's breach
of contract.
Sometimes the courts in contract cases will take account of a
plaintiff's fault in more indirect ways. One method is to manipulate a
warranty, usually an implied one, so as to hold that it was not breached in
a particular case. For instance, in Yachetti v. John Duff & Sons Ltd
(1942),200 the plaintiff bought pork sausages infected with trichinae
parasites and herself contracted trichinosis when she consumed the
sausages. From the evidence, the Court inferred that the plaintiff had not
cooked the sausages properly, for this would have killed the parasites.
Consequently, there was no breach of the implied condition in s. 15 (1) of
the Sale of Goods Act 20 ' that the goods should be reasonably fit for their
purpose: the plaintiff had failed to inform the seller of her intention to use
the sausages in an abnormal way, namely, by cooking them improperly.
A case involving the same implied term is Ingham v. Emes (195 5)202
where the plaintiff suffered acute dermatitis after using a particular hair
dye. She failed to inform the hairdresser who sold and applied the dye of
a previous incident when she had reacted adversely to the dye and,
despite the fact that the manufacturer's test carried out on the instant
occasion failed to reveal her sensitivity, she was denied recovery against
the hairdresser on the ground that the latter was not informed that the
purpose of the dye was its use by a person who was allergic to it.
In recent years, the question whether contributory negligence legis-
lation with its apportionment provisions can be applied to contract
actions has become a contentious matter. 20 3 Though the statutes are

198 Sale of Goods Act, RS.O. 1980, e. 462, s. 49 (3).

199(1978) 90 D.L.R. (3d) 271 (N.B.S.C., App. Div.).
200[19421 O.R. 682 (H.C.).
201
R.S.O. 1980, c. 462.
202[1955] 2 Q.B. 366 (C.A.).
203
Compare G. Williams, Joint Torts and Contributory Negligence (1951), 328-32,
with Palmer & Davis, Contributory Negligence and Breach of Contract- English and
 REVUE DE DROIT DE McGILL [Vol. 27

literally capable of application to contract actions, no such intention is

apparent from their legislative history. Nevertheless, the existence of
overlapping contractual and tortious liability raises the question whether
plaintiffs should have the right to seek full recovery in a contract action
when the loss in question would be apportioned in tort proceedings.
Wher6 the tort and contract duties both consist of an obligation to take
care, a number of recent Canadian0 4 and English 205 authorities support
the application of apportionment legislation even though the action may
be in form contractual. The reasoning in these cases is not strong and,
with one exception, no rationalization is given for restricting the
plaintiff's power to elect between tort and contract. That exception is
Canadian Western Natural Gas,20 6 where Prowse J.A. justified the
application of the legislation by stating that "the real question that arises
is whether an injustice will be done if [the plaintiffJ is given the real
remedy which the facts justify". 207 This suggests the existence of
"independent legal rules", referred to above, limiting the plaintiff's
choice, and in so far as it expresses a preference for the sensitive
apportionment rule over the all-or-nothing solutions generally favoured
by contract law, it is submitted that it should be applauded.
With few exceptions, 20 8 this apportionment development is confined
to cases where the duties arising in contract and tort are of the same
degree of intensity in that both consist of a duty to take care. Where,
however, the defendant is both negligent and in breach of a strict warranty
obligation, a case can also be made for apportionment in limited circums-
tances. That case has been argued elsewhere20 9 and will not be pursued
further here. It is sufficient to state that developments in the contributory
negligence area have limited the plaintiff's freedom to elect between tort

Australasian Attitudes Compared (1980) 29 I.C.L.Q. 415, 416-8, and Swanton,

Contributory Negligence as a Defence to Actions for Breach of Contract (1981) 55
A.L.J.4 278. See also Bridge, supra, note 184.
2° E.g., Emil Anderson Construction Co. v. Kaiser Coal Ltd (1972), unreported but
noted in Truman v. Sparling Real EstateLtd (1977) 3 C.C.L.T. 205, 205-8 (B.C.S.C.)
per Berger J.; Husky Oil OperationLtd v. Osler (1978) 87 D.L.R. (3d) 86 (Sask. Q.B.);
Canadian
205
Western Natural Gas Co. v. Pathfinder Surveys Ltd, supra, note 178.
See, e.g., Quinn v. Burch Bros (Builders) Ltd [1966] 2 W.L.R. 430, 438 (QB.)
per Paull J., affd on different grounds [19661 2 Q.B. 370 (C.A.); Sole v. W.J Hallt Ltd
[1973] Q.B. 574; Artingstoll v. Hewen's Garages Ltd [1973] R.T.R. 197 (Q.B.); De
Meza v. Apple, van Straten, Shena and Stone [1974] 1 Lloyd's Rep. 508 (Q.B.). In the
last case, the point was explicitly left open by all three appeal judges: [1975] 1 Lloyd's
Rep.206498 (C.A.).
Supra, note 178.
207
1bid., 154.
08
2 Smith v. Buckley [1965] Tas. S.R. 210 (S.C.); Carmichael v. Mayo Lumber Co.
(1978) 85 D.L.R. (3d) 538 (B.C.S.C.).
209 Bridge, supra, note 184.
19821 WABASSO

and contract and have reduced the significance of the distinction between
the two categories of civil liability.

B. The Alignment of Contractual and Tortious Rules of Remoteness

of Damage
Though the matter has not always been free from doubt, the orthodox
view is that the tortious and contractual rules of remoteness are not
identical. 1 0 In contract, the defendant is liable for those losses which in
the reasonable contemplation of the parties at the date of the contract
were liable, or not unlikely, to result from a breach. 21 ' The tort rule, on
the other hand, is that the defendant is obliged to answer for the
reasonably foreseeable consequences of his actions. 212 Though the tort
rule is couched in terms of a lesser degree of probability than the contract
rule, there is no reason to suppose that the laws of probability when
applied by a court are any more value-neutral than the laws of factual
causation. Indeed, it has been said that the difference between the
formulae may well be more semantic than substantial. 213 This point was
repeated very recently by the Ontario Court of Appeal in Kienzle v.
Stringer (1981).214
In that case, the plaintiff and his two sisters were the children of a
deceased farmer. Letters of administration were issued to one of the
plaintiff's sisters and she agreed to sell him the farm in her capacity of
administratrix of her father's estate. However, at the time of the
conveyance prepared by the defendant solicitor, who had been retained
by the brother, the farm had vested in all three children of the deceased
farmer; consequently, the conveyance signed only by the one sister qua
administratrix was ineffectual. When the plaintiff later sought to sell the
farm, he found he did not have a marketable title and, when the other
sister refused to convey her interest to him, he suffered various forms of
economic loss. The majority judgment, delivered by Zuber J.A., took its
cue from H. Parsons(Livestock) Ltd v. Uttley, Ingham & Co. (1978)211
in holding that there was no real difference between the tort and the
contract rules, 21 6 and the test of reasonable foreseeability was applied to

210
McGregor on Damages, 14th ed. (1980), § § 572-80.
211C. Czarnikow Ltd v. Koufos [1969] 1 A.C. 350 (H.L.).
212
Overseas Tankship (U.K.) Ltd v. Morts Dock & Engineering Co. (The Wagon
Mound) [1961] A.C. 388 (P.C. (Austl.)).
213. Parsons(Livestock) Ltd v. Uttley Ingham & Co. [1978] Q.B. 791, 807 (C.A.)
per Scarman L.J. (as he then was). A similar point is made by Lord Denning M.R. at
p. 802.
214(1981) 35 O.R. (2d) 85 (C.A.).
21
Supra, note 213.
216
Supra, note 214, 89.
 McGILL LAW JOURNAL [Vol. 27

each item of loss claimed by the plaintiff. Consequently, it was

unnecessary to decide whether solicitors could be sued only in contract
by their clients.
Additional support for the view that the two remoteness rules are in
the process of aligning themselves is to be found, first, in the attempt
made by Lord Denning M.R. in the Parsons217 case to alter the axis of the
two rules by substituting a distinction drawn from the nature of the
plaintiffs interest invaded by the defendant for a distinction drawn from
the formal category (contractual or tortious) of liability; and secondly, in
the expanded range of interests protected by contractual damages and the
correlative expansion of tort law in recent years in the area of economic
loss.
In the Parsons case, a seller supplied and installed a hopper for the
storage of pig nuts. The cowl on the ventilator shaft was inadvertently left
in the closed position with the result that the nuts became mouldy. When
fed to a herd of pedigree pigs, these mouldy nuts caused an outbreak of E.
coli with devastating consequences. The buyer's own behaviour in
feeding manifestly off-colour nuts to his pigs did not surface directly as a
causation or contributory negligence issue2 18 though it posed problems for
the Court in applying the remoteness rule. While the majority held that
the losses caused to the herd fell within the reasonable contemplation rule
of contract, it did so only at the price of introducing a measure of
jesuitical subtlety into the decision. First of all, the difference between the
219
tort and contract rules was said to be more semantic than substantial,
and secondly, the issue of the buyer's behaviour was finessed by asking,
not whether the seller should have known that mouldy nuts when fed to
pigs would cause illness, but rather whether the supply of an unfit hopper
220
would injure the herd.
In a separate judgment, Lord Denning M.R. confessed his impatience
with the semantics of the remoteness rule221 but nevertheless proposed
that the contract rule should henceforth be reserved for cases of economic
loss, whether tortiously or contractually inflicted, while the tort rule
would apply to cases of personal injury and property damage. 222 It is too
early yet to say whether this represents the future path of the law: it may
well be that Lord Denning's less constructive 223 remarks about the

217
Supra, note 213, 802-4.
218
1bid., 809-10 per Scarman L.J.
21lbid., 806 per Scarman L.J.
22
Ibid., 807 per Scarman L.J.
221
1bid., 802.
222
1bid.
223
1bid.
19821 WABASSO

absence of any difference between the tort and contract rules will have
more appeal, as they obviously did for the Ontario Court of Appeal in
224
Kienzle v. Stringer.
In another sense too, the tort and contract rules are in the process of
merging: as a result of recent developments, tort and contract are
increasingly to be seen as protecting the same range of interests. In view
of the expansion of the tort of negligence in the last twenty years, it is no
longer true to say that contract law alone exists to protect the plaintiff
from economic loss. Although the majority view has always been that
economic loss in negligence poses a duty of care problem, Lord Denning 22
has consistently looked at it in terms of remoteness of damage. 1
Nor is it any longer true to say that contract law is confined to the
protection of economic interests. Cases against employees, 226 travel
agents 227 and carriers 228 in recent years have shown that contract law
supports interests that once would have been seen as falling within the
preserve of tort law in so far as they were to be protected at all, namely,
mental anguish, disappointment and peace of mind.

Conclusion
In so far as they reduce the importance of the contract and tort dis-
tinction, developments such as those in remoteness of damage and
contributory negligence lend support to those who would attack the
nineteenth century contract model, 22 9 which is productive of the contract
and tort division at its widest. At such a time, it seems to the practical
mind of a common law lawyer that any attempt to locate precisely the
boundary separating contract and tort, or to chart the exact area of
overlap of the two, is rather beside the point: it is doomed to be overtaken
by events.
Consequently, it behooves any common law lawyer considering the
relationship of contract and tort to concentrate on the problem

224
Supra, note 214.
225
See S.CM. (UK) Ltd v. .J. Whittall and Son Ltd [1971] 1 Q.B. 337 (C.A.);
Spartan
226 Steel & Alloys Ltd, supra, note 71.
Cox v. Philips Industries Ltd [1976] 1 W.L.R. 638 (Q.B.); Pilon v. Peugeot
Canada Ltd (1980) 114 D.L.R. (3d) 378 (Ont. H.C.); Cringle v. Northern Union
Insurance
22
Co. (1981) 124 D.L.R. (3d) 22 (B.C.S.C.).
7Jarvis v. Swans Tours Ltd [1973] 1 Q.B. 233 (C.A.); Jackson v. Horizon Holidays
Ltd [19751 3 All E.R. 92 (C.A.); Keks v. EsquirePleasure Tours Ltd [19741 3 W.W.R.
406 (Man. Co. Ct). See also Elder v. Koppe (1974) 53 D.L.R. (3d) 705 (N.S.S.C., T.D.)
(rental
228
of motor home).
Newell v. CanadianPacificAirlines Ltd (1976) 74 D.L.R. (3d) 574 (Ont. Co. Ct).
229
G. Gilmore, The Death of Contract (1974); P. Atiyah, The Rise and Fall of
Freedom of Contract (1979).
 REVUE DE DROIT DE McGILL [Vol. 27

immediately at hand, whether it raises a question of remoteness,

limitation of actions, or contributory negligence. Even if it surfaces in an
overt fashion infrequently in the case law, this has always influenced the
courts and will continue to do so. While it still remains accurate to point
to the theoretically dual nature of the two regimes of liability,
notwithstanding the evolution of contract law from the tortious forms of
action, it is difficult to deny their technical unity in the fact of develop-
ments reducing the significance of the distinction between contract and
tort.
The decision of the Supreme Court of Canada in Wabasso Ltd v.
NationalDrying Machine Co. (1981),230 permitting the plaintiff to make
out a case in delict so as to qualify for service ex juris despite the
existence of a contract between the parties, seems consistent with the
orthodox position of the common law with regard to overlapping liability.
But it cannot be said with any certainty that the decision is inspired by a
common law philosophy, since no relevant authorities on the relation-
ship between tort and contract are cited and the Court's reasons for giving
the plaintiff its "option" or power of election are not overtly stated in the
case. If one takes the view that the relationship between tort (or delict)
and contract is not a "cosmic question", 231 but rather something to be
considered in a practical setting, then the Wabasso decision can be
isolated as an authority dealing with the relationship of these regimes of
liability in the context of service exjuris. Without opening up that field
for consideration, it can be said that this writer's preference is not for an
inquiry as to whether a case falls within the letter of one or more sub-rules
permitting service out of the jurisdiction, but rather for a consideration of
the more general question, "Is this a proper case for service exjuris and
trial before the courts of this jurisdiction?" This approach would of
course bypass the distinction between tort (or delict) and contract and
may well have been what most motivated the Supreme Court in
Wabasso.

230[1981] 1 S.C.R. 578.

23'The phrase is Weir's. In a comparative survey, he warns against the dangers of an
overgeneralized view of the subject of overlapping liability and argues the need for
considering its ramifications within particular legal systems. See Weir, "Complex
Liabilities" in International Encyclopedia of Comparative Law (1976), vol. XI,
chap. 12.