



COURT OF APPEAL FOR ONTARIO

CITATION: Das v. George Weston Limited, 2018 ONCA 1053

DATE: 20181220

DOCKET: C64146 & C64679 (M48391)

Doherty and Feldman JJ.A. and Gray J. (
ad hoc
)

BETWEEN

Arati Rani Das, Rehana Khatun, Mohamed Alauddin
    and Kashem Ali

Plaintiffs (Appellants)

and

George Weston Limited, Loblaws Companies Limited,
    Loblaws Inc., Joe Fresh Apparel Canada Inc., Bureau Veritas  Registre
    International de Classification de Navires et DAeronefs SA, Bureau Veritas
    Consumer Products Services, Inc., and Bureau Veritas Consumer Products Services
    (BD) Ltd

Defendants (Respondents)

Joel P. Rochon, Peter R.
    Jervis and Golnaz Nayerahmadi, for the appellants

Christopher D. Bredt, Markus
    F. Kremer and Alannah Fotheringham, for the respondents George Weston Limited,
    Loblaws Companies Limited, Loblaws Inc. and Joe Fresh Apparel Canada Inc.

Michael A. Eizenga, Ranjan K.
    Agarwal and Gannon G. Beaulne, for the respondents Bureau Veritas  Registre
    International de Classification de Navires et DAeronefs SA, Bureau Veritas
    Consumer Products Services, Inc. and Bureau Veritas Consumer Products Services
    (BD) Ltd

Paul J. Pape and Shantona
    Chaudhury, for the Law Foundation of Ontario

Heard: April 24 and 25, 2018

On appeal from the order of Justice Paul M. Perell of the
    Superior Court of Justice, dated July 5, 2017, with reasons reported at 2017
    ONSC 4129, and from the costs order, dated September 20, 2017, with reasons
    reported at 2017 ONSC 5583.

Feldman J.A.:

A.

Overview

[1]

When the Rana Plaza building in Savar, Bangladesh collapsed on April 24,
    2013 due to significant structural flaws, killing and injuring thousands, the
    world was shocked and horrified. Most of the dead and injured were factory workers
    making garments for international export. Many of those workers were making
    garments for Joe Fresh Apparel Canada Inc., a well-known brand owned and
    controlled by Loblaws Companies Limited, a large Canadian company.

[2]

The appellants commenced a class action in Ontario against Loblaws
[1]
and Bureau Veritas,
[2]
a company Loblaws had contracted to conduct a limited audit of the premises
    where the garments were manufactured. The appellants sought to hold the two
    companies responsible for the damages suffered by everyone who was killed or
    injured in the collapse by applying the class actions law of Ontario.

[3]

After the appellants moved for certification, Loblaws and Bureau Veritas
    brought motions under r. 21 of the
Rules of Civil Procedure
, R.R.O.
    1990, Reg. 194, to dismiss the action on the basis that it is plain and obvious
    that it cannot succeed. They submitted that the action is governed by the law
    of Bangladesh and that it must therefore fail for two key reasons: 1) it is
    statute-barred because it was commenced after the expiry of the applicable
    one-year limitation period under Bangladeshi law; and 2) it is plain and
    obvious under Bangladeshi law that neither Loblaws nor Bureau Veritas owed a
    duty of care or were otherwise legally responsible to the victims for the
    collapse.

[4]

The motion judge dismissed the action on both these bases and made a
    significant costs award against the appellants. These reasons address the issue
    of whether Bangladeshi law applies and, if so, whether the action is statute-barred
    and whether it is plain and obvious that the action must otherwise fail. For
    the reasons that follow, I conclude that Bangladeshi law applies and that the
    motion judge correctly dismissed the action.

[5]

My colleague, Doherty J.A., writes separately to address the issue of
    costs. I concur entirely with his reasons and disposition.

B.

Background

[6]

The background is based on the pleadings, including the Fourth Amended
    Statement of Claim and the documents incorporated by reference into the claim,
    as well as affidavit and cross-examination evidence that formed part of the
    record before the motion judge.

(1)

The Parties

[7]

Loblaws is Canadas largest food, clothing, and pharmacy retailer. Its
    lines of business include the clothing brand Joe Fresh. For many years, Loblaws
    purchased clothes from Pearl Global Limited (Pearl Global), which in turn
    outsourced some of the work to New Wave Style Limited and New Wave Bottoms
    Limited (collectively, New Wave). New Wave Bottoms operated on the third
    floor of Rana Plaza, while New Wave Style operated on the sixth and seventh
    floors of Rana Plaza. At the time of the collapse, Loblaws purchased about 50%
    of the garments New Wave produced.

[8]

Bureau Veritas is a consulting services enterprise that Loblaws retained
    to perform auditing and inspection services of its offshore supplier factories,
    referred to by the motion judge as
social
    audits as explained and described in the affidavit of Mr. Jason Hill,
Manager of Social Accountability of Bureau Veritas
    Consumer Products Services Inc
. Bureau
    Veritas conducted
two social audits of New Wave Style, one on February
    28, 2011 and the second on April 12, 2012. It did not conduct any audits of New
    Wave Bottoms.

[9]

The proposed representative plaintiffs all suffered injury and/or lost
    family members in the Rana Plaza collapse. Arati Rani Das was 17 or 18 years
    old at the time of the collapse and worked for New Wave Style.
[3]
She was seriously injured in the collapse and her mother, also a garment worker
    at New Wave Style, died. Both Rehana Khatun and Mohamed Alauddin worked for New
    Wave Style. They were also seriously injured in the collapse. Finally, Kashem
    Alis two sons and one daughter-in-law worked at New Wave and died in the
    collapse.

(2)

Corporate Social Responsibility Standards and Social Audits

[10]

Loblaws
    sources merchandise from around the world, including Bangladesh. It has
    voluntarily adopted and implemented Corporate Social Responsibility Standards (CSR
    Standards), publicized in various documents including codes of conduct and
    reports. The CSR Standards are designed to ensure that Loblaws suppliers manufacture
    products in a socially responsible manner and to protect the safety of workers around
    the world that produce goods for the company.

[11]

In this case, Loblaws CSR Standards were reflected in its Supplier
    Code of Conduct, which was incorporated into Loblaws Vendor Buying Agreement
    with Pearl Global. While the Vendor Buying Agreement designated
New Wave
    Style as a supplier for Loblaws, only Loblaws and Pearl Global were parties to
    the contract. The Supplier Code of Conduct mandated that suppliers comply with
    national and local laws and adhere to best practices for their industry.
Although the Code of Conduct spoke to workplace health and safety, it did
    not address the structural integrity of buildings in which the suppliers
    operated.

[12]

The
    Vendor Buying Agreement allowed, but did not require, Loblaws to perform site
    inspections of its suppliers factories. Loblaws was also entitled, but not
    required, to cancel any outstanding orders and end its business relationship
    with Pearl Global if Pearl Global failed to comply with the Supplier Code of
    Conduct. Loblaws, however, had no contractual right to control the suppliers
    operations or order a supplier or sub-supplier to shut down; it also had no
    right to hire, supervise or fire employees of the supplier or sub-supplier.

[13]

To
    ensure compliance with its CSR Standards, Loblaws retained Bureau Veritas to
    conduct what the motion judge and the parties termed social audits. According
    to Bureau Veritas evidence, t
he term social audit refers to
    the practice of independently auditing an organizations compliance-related
    processes and controls, measured against self-imposed or external standards. The
    motion judge noted that the scope of the social audit that Bureau Veritas was
    retained to perform for Loblaws was identical to the scope of Loblaws CSR Standards.
    Although Bureau Veritas offered other services beyond the scope of a basic
    social audit, such as assessments of building construction and structural
    integrity, Loblaws did not retain it to provide those services.

[14]

Bureau Veritas
conducted social audits of New Wave Style on
    February 28, 2011 and April 12, 2012. At the time of the first audit in 2011,
    New Wave Style operated on the sixth floor of Rana Plaza, and Bureau Veritas
    found 21 instances of non-compliance, 11 related to health and safety. At the
    second audit in 2012, New Wave Style operated on both the sixth and seventh
    floors, and Bureau Veritas found nine instances of non-compliance, four in the
    health and safety category. Those four were related to safety equipment,
    emergency exit signage and marking, and eye wash facilities. Neither audit
    mentioned the structural integrity of Rana Plaza. Neither Loblaws nor Bureau
    Veritas followed up on the remediation of the noted deficiencies. Some New Wave
    employees were interviewed as part of the audits and others observed the Bureau
    Veritas personnel at the factory. Based on those interviews and observations it
    is pleaded that the appellants relied on Loblaws and Bureau Veritas to ensure
    their safety in the workplace.

[15]

In
    January 2013, Loblaws terminated its contract with Bureau Veritas. It retained
    another inspection and auditing firm, which was scheduled to conduct its first
    audit on April 24, 2013, the day of the Rana Plaza collapse.

(3)

The Rana Plaza Collapse

[16]

Rana
    Plaza was a nine-floor mixed commercial and industrial building. It was
    originally constructed as a six-floor commercial complex in 2006 without proper
    approvals. It was subsequently expanded by two additional floors and, just
    before the collapse, construction of a ninth floor was nearing completion.

[17]

On
    April 23, 2013, cracks were discovered in three pillars of the structure of
    Rana Plaza. Local police evacuated the site and workers were sent home. Later
    that day, however, managers at New Wave ordered New Wave employees to return to
    work the following day. The next morning, April 24, 2013, New Wave advised
    workers that the building was safe and threatened to terminate their employment
    if they did not return to work.

[18]

That
    same morning, as a result of a power outage, the large back-up generators on
    the upper floors of Rana Plaza began to operate, causing substantial vibration.
    Around 9 a.m., Rana Plaza collapsed, killing 1,130 people and injuring 2,520
    others. Those injured or killed included employees of New Wave, employees of
    other garment businesses operating out of Rana Plaza and other people who
    happened to be in or around the building at the time of the collapse.

(4)

The Action

[19]

On
    April 22, 2015, just before the second anniversary of the collapse, the appellants
    commenced an action in Ontario against Loblaws for 1) negligence, 2) vicarious
    liability for the negligence of Pearl Global and New Wave, and 3) breach of
    fiduciary duty. The appellants also alleged that Bureau Veritas was liable for
    negligence. The appellants sought $2 billion in damages as well as other
    relief, including punitive damages. They brought the action not only on behalf
    of employees of New Wave and their survivors, but on behalf of all persons who
    were in Rana Plaza at the time of the collapse and survived, the estates of all
    persons who died as a result of the collapse, and the family members and
    dependents of those who died or were injured.

[20]

The
    appellants alleged that Loblaws was negligent in that it decided to have its
    garments manufactured in a country notorious for unsafe factory conditions with
    a known legal and regulatory vacuum. Knowing of these shortcomings and of the
    vulnerability of the class members, Loblaws implemented CSR Standards and
    undertook the responsibility to protect workers manufacturing
Joe
    Fresh garments from the risk of injury and death
. Loblaws breached its
    duty to protect workers by failing to ensure that Bureau Veritas conducted
    adequate audits, including structural integrity audits, and by failing to
    require that New Wave and other suppliers ensured that safe working conditions
    existed.

[21]

In
    addition, the appellants alleged that Loblaws was vicariously liable for any
    negligence by Pearl Global and New Wave because of the inherent risks of the
    Bangladeshi garment industry and because it assumed direct and indirect control
    over New Waves operations by virtue of its purchasing power, its
    communications with New Wave regarding products, and its right in the Vendor
    Buying Agreement to terminate its commercial relationship with Pearl Global for
    non-compliance with that Agreement (including the Supplier Code of Conduct). The
    appellants also alleged that Loblaws had a non-delegable duty to take
    reasonable care to ensure the safety of the garment workers.

[22]

Finally,
    the appellants alleged that Loblaws owed a fiduciary duty to ensure that the
    audits and inspections performed at New Wave were sufficiently comprehensive to
identify, address and remedy structural defects, so as to protect
    worker safety.
[4]

[23]

In
    respect of Bureau Veritas, the appellants alleged that it was negligent by failing
    to conduct reasonable audits and inspections, including audits and inspections
    that dealt with structural integrity, and by failing to ensure that issues of
    non-compliance were quickly remedied. In the alternative, it negligently failed
    to advise Loblaws to include structural integrity as part of the audit process.

(5)

The Motions

[24]

The
    appellants brought a motion to have their action certified as a class action under
    the
Class Proceedings Act, 1992
, S.O. 1992, c. 6. The respondents
    contested the certification motion and brought their own motions for an order
    under r. 21.01(1)(a) of the
Rules of Civil Procedure
, declaring that: 1)
    the action was statute-barred
under Bangladeshi law, which law applied
    to the claims; and 2) it was plain and obvious that the causes of action could
    not succeed under Bangladeshi law. In the alternative, the respondents sought a
    declaration that, if the substantive law of Ontario applied, it was plain and
    obvious that the causes of action could not succeed under the law of this
    province. The respondents also sought to challenge the courts jurisdiction
    over the proposed class members located in Bangladesh who had not formally
    attorned to the courts jurisdiction. The motion judge ultimately rejected
    Loblaws argument that it would have been necessary to determine whether the
    proposed class members had attorned to the courts jurisdiction before he could
    certify the action
. The jurisdictional component of the motion judges
    decision is not under appeal.

[25]

As the motion judge noted, despite bringing their motions contesting
    the legal viability of the appellants claim under r. 21.01(1)(a), the
    respondents effectively moved under r. 21.01(1)(b) in seeking a determination
    that the claim discloses no reasonable cause of action. It appears that r.
    21.01(1)(a) was used so that both parties could provide some evidence,
    including the expert evidence on foreign law, which can be done under r.
    21.01(1)(a) but not under (b). This procedure was accepted by the motion judge
    by the time of the hearing of the motions.

(6)

The Evidence on the Motions


[26]

The
    evidentiary record before the motion judge was extensive, including numerous affidavits,
    transcripts, and documents. Several experts on Bangladeshi and English tort law
    provided evidence on the issues raised on this appeal. These experts were
Mr. Ajmalul Hossain, Chief Justice (ret.) Md. Tafazzul Islam and
Dr. Jonathan Morgan for the appellants, and Ms. Nihad Kabir, Mr.
    Salahuddin Ahmad, Mr. Rokanuddin Mahmud, Chief Justice (ret.) Latifur Rahman and
    Dr. James Goudkamp for the respondents.

[27]

As
    the motion judge pointed out, the admission of evidence on the motions was
    obviously necessary to determine the content of foreign law. He also accepted
    the parties position that some factual evidence was needed to understand and
    to assess certain lynchpin allegations that formed the basis of the
    appellants novel tort claims, including the allegation that Loblaws had assumed
    responsibility for the safety of the appellants and that Loblaws had the ways
    and means to protect the appellants safety.

(7)

The Motion Judges Rule 21 and Certification Decision

[28]

The
    motion judge wrote very thorough reasons, which addressed the substantive
    issues on the motions, as well as how to approach the expert evidence on
    foreign law. The motion judge addressed the following issues that are germane
    to this appeal:

1)

What is the proper
    approach to motions under r. 21.01(1), including in particular, the treatment
    of different types of allegations that are pleaded in the Fourth Amended Statement
    of Claim?

2)

Does the law of
    Ontario or the law of Bangladesh apply to the claims?

3)

If Bangladeshi law
    applies, is the applicable limitation period one year or six years?

4)

If Bangladeshi law
    applies, is it plain and obvious that the claims in negligence and vicarious
    liability against Loblaws cannot succeed?

5)

If Bangladeshi law
    applies, is it plain and obvious that the claim in negligence against Bureau
    Veritas cannot succeed?

6)

What is the appropriate
    quantum for costs of the motions?

[29]

The
    motion judge gave separate reasons for his award of costs. As noted above, this
    issue is addressed by Doherty J.A. in separate reasons.

(a)

Rule 21 Principles and the Pleaded Facts

[30]

While
    the motion judge accepted the pleaded facts as true, he declined to accept a
    pleading of law or a conclusory characterization or statement as a fact. For
    example, he refused to accept as true a pleading that Loblaws had control over New
    Wave. Instead, he examined the material facts pleaded in order to determine the
    existence and extent of any control.

[31]

As
    documents were incorporated by reference into the pleading, including Loblaws Supplier
    Code of Conduct and its contracts with Pearl Global and Bureau Veritas, the
    motion judge used those documents to help to determine the factual basis for
    the claims.

(b)

Choice of Law

[32]

The
    motion judge rejected the appellants primary position that the law of Ontario
    applied and held instead that Bangladeshi law governed the claims. This was a
    critical issue for the appellants because the action was commenced within the
    two-year limitation period under Ontarios
Limitations Act, 2002
, S.O.
    2002, c. 24, Sch. B, but out of time for most class members if a one-year
    limitation under Bangladeshs limitations statute applied. It would also have been
    much more convenient for an Ontario court to refer to Ontario tort law to
    determine the viability of the claims.

[33]

Relying
    on the
lex loci delicti
rule for choice of law in tort cases, as set
    out by the Supreme Court of Canada in
Tolofson v. Jensen
, [1994] 3
    S.C.R. 1022, the motion judge concluded that the law of Bangladesh applied to
    the class members claims. In
Tolofson
, La Forest J. stated, at p.
    1050, that as a general rule, the law to be applied in torts is the law of the
    place where the activity occurred, i.e., the
lex loci delicti
.
 This rule is applied strictly and typically
    involves choosing the law of the place where the tragic event occurred.

[34]

The
    motion judge observed that the appellants framed their pleadings to situate the
    wrongful activity in Ontario. For example, they pleaded that Loblaws made its
    decisions in Ontario not to conduct structural audits, not to require New Wave
    to ensure that the building was structurally safe to work in, and not to order
    New Wave to stop production on the date of the collapse. With respect to Bureau
    Veritas, the appellants pleaded that it reported its findings to Loblaws in
    Ontario and its failure to report on the structural dangers of Rana Plaza
    occurred in Ontario. The motion judge rejected this characterization of the
    location of the tort or wrongdoing as a pleading artifice.

[35]

He
    found that the injury occurred in Bangladesh, the jurisdiction substantially
    affected by the [respondents] activities. He noted, for example, that: Loblaws
    alleged wrongdoing consisted of failing to protect the class members, who were
    located in Bangladesh; the consequences of the wrongdoing were felt in
    Bangladesh; and Bureau Veritas social audits took place in Bangladesh.

[36]

The
    motion judge also rejected the argument that this was an exceptional case, as
    envisioned in
Tolofson
, where Canadian law should apply because applying
    the law of Bangladesh would give rise to injustice.

[37]

First,
    the motion judge rejected the argument that it would be unjust to apply
    Bangladeshi law due to a lack of a developed body of tort law in Bangladesh. He
    observed that Bangladesh has a fully developed tort law jurisprudence, which is
    capable of responding to any new types of claims. Second, he dismissed the
    appellants submission that Bangladeshi law should be ousted on grounds of
    public policy because it includes Sharia law that distributes damages unequally
    between male and female heirs in some circumstances. He reasoned that the law
    could be severed if the claims got that far and that, in any case, the point
    was moot because the claims were either statute-barred or not legally viable. Third,
    the motion judge rejected the argument that Bangladeshi law should be ousted
    because it does not provide for punitive damages. He was not satisfied that punitive
    damages are unavailable in Bangladesh. In any event, if the appellants were awarded
    the $2 billion compensatory award they claimed, it was doubtful that a court
    would also award punitive damages.

[38]

The motion judge thus concluded that the substantive law of
    Bangladesh governed the claims.

(c)

Overview of the Bangladeshi Legal System

[39]

Using the expert evidence, the motion judge explained that
the Bangladeshi legal system is considerably influenced by the
    British common law system. The territory that now comprises Bangladesh was at
    one time part of British India. In 1947, with the partition of India,
    Bangladesh became part of the Dominion of Pakistan. In 1971, Bangladesh became
    an independent state.

[40]

As
    a result of this history, Bangladeshs
corpus juris
includes the pre-1947
    decisions of the Indian courts and the Privy Council of England, as well as the
    Supreme Court of Pakistans decisions from 1947 to 1971. In respect of
    post-1947 jurisprudence, the motion judge stated, based on the expert evidence,
    that: Today, when confronted with novel tort claims, the courts of Bangladesh
    will consider authorities from England and Wales to be persuasive although not
    binding. He also noted that decisions of English and Indian courts are
    regularly cited in Bangladeshi courts. A substantial body of Bangladeshi law is
    also codified in statutes.

[41]

Again
    drawing on the expert evidence, the motion judge discussed the Bangladeshi
    court system. He noted that the Supreme Court of Bangladesh is comprised of two
    divisions: the High Court Division and the Appellate Division. The Appellate
    Division hears appeals from the High Court Division, with leave. On a petition
    for leave, the Appellate Division may: 1) deny leave; 2) dispose of the application
    with observations; or 3) grant leave and hear the appeal. On a leave petition,
    the observations of the Appellate Division are binding on lower courts,
    including the High Court Division.

(d)

Limitation Period

[42]

The
    motion judge concluded that, under the law of Bangladesh, any tort claims were
    statute-barred under Bangladeshs
Limitation Act, 1908

(Act No.
    IX of 1908), save for the claims of class members who were born on or after
    April 22, 1996. He also found that the one-year limitation period was not
    tolled by ss. 7 and 13 of the
Limitation Act
, 1908
.

[43]

The
    motion judge explained that Articles 21 and 22 of the
Limitation Act, 1908

provide a one-year limitation period for a cause of action for wrongful
    death (a cause of action created by the
Fatal Accidents Act, 1855

(Act
    No. XIII of 1855)) and for any other injury to the person. Article 120, in
    contrast, provides a six-year limitation period for a suit for which no period
    of limitation is provided elsewhere.

[44]

These
    provisions were considered by three levels of court, including Bangladeshs
    highest court in the recent case of
Bangladesh Beverage Industries Ltd. v.
    Rowshan Akhter

(2016), 69 Dhaka L.R. 196 (S.C. Bangladesh App. Div.),
    which disposed of the leave petition with observation and modification from (2010),
    62 Dhaka L.R. 483 (S.C. Bangladesh H.C. Div.).
As the motion judge
    explained, it is the single appellate case to date to consider the application
    of the
Limitation Act, 1908
to a claim involving wrongful death, tort
    and vicarious liability.

[45]

The
    motion judge ultimately agreed with the respondents experts that the Appellate
    Division decided that the one-year limitation period in Articles 21 and 22 of
    the
Limitation Act, 1908
, and not the six-year limitation period in
    Article 120, applied to the claim. The Appellate Division concluded its
    decision by saying precisely what it did: it stated that the limitation period
    expired one year after the accident.

[46]

The
    motion judge also agreed with the respondents experts that on a plain reading,
    Articles 21 and 22 apply to all claims arising from wrongful death and any
    other personal injuries, regardless of the nature of the alleged breach that
    caused the harm. Article 120, in contrast, is a residual provision that applies
    only if no other Article setting out a limitation period applies. Since all of
    the appellants claims arose out of wrongful death and personal injuries, they
    were subject to the one-year limitation period in Articles 21 and 22.

[47]

The
    motion judge also rejected the appellants argument that s. 7 of the
Limitation
    Act, 1908
, which applies in cases of joint liability, suspended the running
    of the limitation period. However, he raised the potential applicability of s. 6,
    which suspends the running of a limitation period for a person under a
    disability, including minors. The motion judge noted that it was unknown how
    many proposed class members were minors, particularly since 14-year-old persons
    may join the regular workforce in Bangladesh. Applying s. 6, the motion judge
    concluded that the claims of class members born on or after April 22, 1996 were
    not statute-barred.
[5]


[48]

The
    motion judge also rejected the argument that s. 13 of the
Limitation Act,
    1908
, which suspends the limitation period while a defendant is absent
    from Bangladesh, applied in this case.

[49]

The
    motion judge therefore concluded that the appellants claims were
    statute-barred, except for the claims by class members born on or after April
    22, 1996, who were minors at the time of the collapse.

(e)

No Reasonable Cause of Action

[50]

The
    respondents also argued, in the alternative, that if the claims were not
    statute-barred, then they disclosed no reasonable cause of action under the law
    of Bangladesh. The motion judge addressed this issue on the basis that the
    claims of class members born on or after April 22, 1996 were timely and could
    proceed. He concluded that under the law of Bangladesh, it was plain and
    obvious that these class members had no legally viable tort claims against
    either Loblaws or Bureau Veritas.

(i)

The Duty of Care (Negligence) Claims

[51]

The
    motion judge noted that Mr. Hossain and Ms. Kabir agreed that the appellants
    tort claims were novel and unprecedented under the law of Bangladesh. They also
    agreed that the courts of Bangladesh would be heavily influenced by English law
    in adjudicating them. As a result, the motion judge stated that the more
    decisive factual battleground was the expert evidence on English law.

[52]

He
    then summarized the competing expert opinions about the appropriate test to
    determine whether a duty of care exists in English law. He preferred the
    evidence of Dr. Goudkamp, proffered by the respondents, to the evidence of Dr.
    Morgan, proffered by the appellants, for several reasons.

[53]

First,
    Dr. Morgan failed to differentiate between factual allegations and pleaded
    arguments and underappreciated the distinction between misfeasance and
    nonfeasance. He failed to recognize that tort law will only impose a duty of
    care to intervene to protect a person from the risk of harm by a third party in
    limited circumstances.

[54]

Second,
    he misunderstood and misapplied the assumption of responsibility test. Here,
    Loblaws had not assumed responsibility for the class members safety because
    New Wave was not Loblaws subsidiary, Loblaws only had limited control over New
    Wave through its CSR Standards, and with the possible exception of some New
    Wave employees, no one in Rana Plaza had expectations about Loblaws or Bureau
    Veritas role in protecting workers from the tragedy occurring. In the motion
    judges opinion, the class members would not be aware of, depend upon, or be
    influenced by CSR Standards, social audits, or the contracts between Loblaws, Bureau
    Veritas, Pearl Global, and New Wave.

[55]

Third,
    Dr. Morgan provided a theory on the scope of liability that was neither
    reliable nor logically defensible, particularly in his assertion that the respondents
    duty of care included persons who did not work at New Wave, but were in the
    environs of Rana Plaza when it collapsed. Moreover, in respect of Bureau
    Veritas, any duty could not extend beyond the scope of its retainer.

[56]

Finally,
    the motion judge found that Dr. Morgan had understated and misstated policy
    factors for recognizing a duty of care, particularly by placing undue emphasis
    on the appellants vulnerability. Although there were policy considerations in
    favour of recognizing a novel duty, the motion judge agreed with Dr. Goudkamp
    that negative policy factors displaced any potential duty of care. These
    negative policy factors included that liability under these circumstances would
    be indeterminate and disproportionate, result in a deluge of cases based on an
    assumption of responsibility, and encourage other potential defendants to adopt
    socially detrimental defensive practices that would adversely affect similar
    plaintiffs and their economies. The motion judge also agreed with Dr. Goudkamp
    that imposing liability would be unfair, given that the respondents were not
    responsible for the appellants vulnerability, did not create the dangerous
    workplace, and had no control over the dangerous circumstances, employers and
    employees.

[57]

The
    motion judge accordingly concluded that it was plain and obvious that
under the law of Bangladesh, the appellants claim did not disclose a
    reasonable cause of action in negligence against either respondent.

(ii)

The Vicarious Liability Claim

[58]

The
    motion judge also found that it was plain and obvious that the appellants
    vicarious liability claim against Loblaws could not succeed under Bangladeshi
    law.

[59]

He
    set out several reasons for rejecting the vicarious liability claim, including:
    1) Pearl Global, and even more so New Wave, were not agents or employees of
    Loblaws; 2) Pearl Global and New Wave were not even independent contractors of
    the sort that could trigger vicarious liability; 3) Loblaws did not create the
    dangerous activity, and garment manufacturing is not inherently dangerous; and 4)
    there was no authority in Bangladesh or England that supported the vicarious
    liability theory, the recent
Bangladesh Beverage
decision simply being
    a classic example of an employer who was held vicariously liable for the wrongs
    of its employee.

[60]

Finally,
    this class claim was not an exceptional case in which to impose vicarious
    liability for the negligence of an independent contractor. Pearl Global and New
    Wave operated independent and different businesses from Loblaws. Additionally,
    Loblaws had not delegated the manufacture of garments in order to escape
    responsibility and had no non-delegable duty to the class members.

[61]

Accordingly,
    the motion judge concluded that it was plain and obvious that the appellants had
    no claim against Loblaws for vicarious liability under the law of Bangladesh.

(f)

The Motion Judges Conclusion

[62]

The
    motion judge concluded that the substantive law of Bangladesh applied to the
    class members claims, the claims were statute-barred under Bangladeshs
Limitation
    Act, 1908
(save for the claims of class members born on or after April 22,
    1996) and it was plain and obvious that the claims could not succeed. Since
    there were no legally viable claims, he refused to certify the class action and
    granted the respondents motions to dismiss the action.

C.

Issues on Appeal

[63]

The
    appellants challenge the motion judges determinations that: 1) the law of
    Bangladesh applies to the claims, not the law of Ontario; 2) under Bangladeshi
    law, the claims of the class members born before April 22, 1996 are statute-barred;
    and 3) under Bangladeshi law, it is plain and obvious that the claims in
    negligence and vicarious liability cannot succeed. The appellants also
    challenge the motion judges application of r. 21 principles.
[6]


[64]

I
    will address the issues raised by the appellants in the following order:

1.

What is the appropriate standard of review on an appeal
    from a r. 21 motion?

2.

Did the motion judge err in principle by failing to
    properly apply r. 21 evidentiary principles and the plain and obvious test?


3.

Did the
motion judge err in law
    by finding that the law of Bangladesh
, and not the law of Ontario,
applies to the claims?

a.

Is the law of Bangladesh the
lex loci delicti
of the claims?

b.

Did the motion judge err by failing to exercise his discretion to
    decline to apply Bangladeshi law under the injustice exception?

4.

If Bangladeshi law applies, did the motion judge err by
    finding that the negligence and vicarious liability claims are statut
e-barred by Bangladeshs
Limitation
    Act, 1908
?

a.

Is the limitation period one year under Articles 21 and 22 or six
    years under Article 120 of the
Limitation Act, 1908
?

b.

Was the one-year limitation period t
olled against Loblaws by s.
13 of the
Limitation Act,
1908
?

5.

If Bangladesh
i
law
    applies, did the motion judge err by finding that it is plain and obvious that
    the claims
in
negligence and vicarious liability
will fail under Bangladeshi law?

a.

Are the claims in negligence against Loblaws and Bureau
    Veritas bound
to fail under Bangladeshi law?

b.

Is the claim in vicarious liability against Loblaws bound
    to fail under Bangladeshi law?

D.

Analysis

(1)

What is the appropriate standard of review on an appeal from a r. 21
    motion?

[65]

The respondents asked the court to determine a number of questions of
    law under r. 21.01(1)(a), including: 1) the proper law to be applied to the
    pleaded claims; 2) the content of that law on the issue of limitation; and 3) the
    viability of the claims under that law applying the plain and obvious test. Normally,
    r. 21.01(1)(b) is invoked to determine the third issue. However, both rules ask
    the court to determine questions of law and are therefore reviewable on the
    correctness standard: see
Canadian Union of Postal Workers v.
    Quebecor Media Inc.
, 2016 ONCA 206, 129 O.R. (3d) 711, at
    para. 2;
Attis v. Canada (Health)
, 2008 ONCA 660,
    93 O.R. (3d) 35, at para. 23, leave to appeal refused, [2008] S.C.C.A. No. 491.

[66]

There is a wrinkle, however, when the issues involve findings with
    respect to the content and application of foreign law. First, in order to
    determine whether the law of Ontario or that of another jurisdiction is the
    proper law to apply to the claims, there is a discretionary component, which I
    will discuss further when I address the substantive issue. The parties agree
    that the standard of review for that portion of the decision is reasonableness
    and that the court may intervene only if the motion judge failed to apply the
    proper principles or the result is clearly unjust: see
Wong v. Lee
(2002), 58 O.R. (3d) 398 (C.A.), at paras. 27-30.

[67]

Second, a court requires expert evidence to decide
    issues involving the content of foreign law. The judge is entitled to accept or
    reject the expert evidence and make findings on foreign law based on that
    evidence. The judge is also entitled to review the sources relied on by the
    experts and come to his or her own conclusions based on that examination:
Lister
    v. McAnulty
, [1944] S.C.R. 317, at
    pp. 323-24
. The judges findings are therefore
    findings of fact, which would normally be accorded deference on appeal.
    However, in
General Motors Acceptance Corporation of Canada, Limited
    v. Town and Country Chrysler Limited
, 2007 ONCA 904
, 88 O.R. (3d) 666, at para. 35
, this court held
    that questions of foreign law should be reviewed on a correctness standard.

[68]

The respondents submit that the court should apply the deferential standard
    to its review of the motion judges findings of foreign law in the face of
    competing expert opinions and that
General Motors
should be distinguished on its facts. In that case, the trial judge
    ignored the expert evidence and interpreted Quebec civil law himself. Rather
    than find that this resulted in a palpable and overriding error, the court held
    that it was as well-positioned as the trial judge to determine questions of
    foreign law and therefore approached the issue
de novo
, applying the correctness standard of review.

[69]

As I am satisfied that the motion judge was correct in his findings on
    Bangladeshi law, for the purposes of this appeal, I am prepared to apply the
    approach most favourable to the appellants, the correctness standard.

(2)

Did the motion judge err in principle by failing to properly
    apply r. 21 evidentiary principles and the plain and obvious test?

[70]

The
    appellants position is that the motion judge made a fundamental error in his
    approach to their pleading in the Fourth Amended Statement of Claim. They say
    that he did not read the pleading generously, he did not accept the pleaded
    facts as true and he should not have used the content of the pleaded documents
    to refute pleaded allegations.
They submit that he instead
    treated the motion as a r. 20 summary judgment motion and effectively found
    that the appellants had not proved their case.

[71]

For
    example, the appellants pleaded that Loblaws controlled New Wave. This was a
    very critical pleading because control is an important factor in establishing a
    duty of care. The motion judge refused to treat this allegation as a statement
    of material fact rather than law. He rather looked to the pleaded facts as well
    as the documents incorporated by reference into the pleading to see if Loblaws
    had a contractual or
de facto
relationship that gave it control over
    New Wave.

[72]

Another
    example is the appellants pleading that characterized Loblaws and most of
    Bureau Veritas wrongful conduct as taking place in Ontario because they made
    corporate decisions and delivered reports here. The appellants argue that the
    motion judge ignored these pleadings when he decided where the tort occurred and
    therefore what law should apply to determine the claims.

[73]

I do not accept these submissions. The proper approach to a r. 21
    motion to strike a claim as disclosing no reasonable cause of action is easy to
    state: the motion judge is to accept the facts pleaded in the statement of
    claim as true to determine whether it is plain and obvious based on the current
    state of the law, including how it may be open to development, that the claim
    discloses no reasonable cause of action.

[74]

That said, while the material facts that are
    pleaded in the statement of claim are assumed to be true for purposes of a
    motion to strike, bald conclusory statements of fact and allegations of legal
    conclusions unsupported by material facts are not:
see
Castrillo v. Workplace Safety and Insurance Board
, 2017 ONCA 121, 136 O.R. (3d) 654, at para. 15;
Apotex Inc.
    v. Eli Lilly and Company
, 2015 ONCA 305, 334 O.A.C. 99, at
    para. 21, leave to appeal refused, [2015] S.C.C.A. No. 291;
Gratton-Masuy
    Environmental Technologies v. Ontario
, 2010 ONCA 501, 101
    O.R. (3d) 321, at paras. 101-3. Furthermore, the motion judge is entitled to
    examine documents that form part of the pleading as part of the material facts
    that are pleaded and accepted for the purpose of the motion:
Web
    Offset Publications Ltd. v. Vickery
(1999), 43 O.R. (3d) 802
    (C.A.), at p. 803.

[75]

In
R. v. Imperial Tobacco
, 2011 SCC 42,
    [2011] 3 S.C.R. 45, at para. 19, McLachlin C.J. explained that the power to
    strike out a claim is a valuable housekeeping measure that allows the court
    to weed out claims at an early stage while ensuring that claims that have some
    chance of success go on to trial. While the appellants submitted that any
    claim should be allowed to proceed unless it has been specifically addressed
    and rejected as legally untenable by the courts, relying on
Dalex
    Co. v. Schwartz Levitsky Feldman
(1994), 19 O.R. (3d) 463
    (Gen. Div.), at p. 466, the Supreme Courts articulation in
Imperial
    Tobacco
is the binding test.
In that case, the court
    confirmed that a claim will not be struck simply because it is novel: at para.
    21. If, however, it is plain and obvious that the pleading discloses no
    reasonable cause of action, it cannot proceed:
Imperial Tobacco
, at
    para. 17; see also
Hunt v. Carey Canada Inc.
, [1990] 2 S.C.R. 959, at
    p. 980. It must have a reasonable prospect of success:
Imperial Tobacco
,
    at para. 17.

[76]

While the principles are easily stated, the record before the motion
    judge was voluminous. The Fourth Amended Statement of Claim contained 261
    paragraphs. The parties also filed 73 volumes of evidence and compendiums,
    including extensive evidence on foreign law. The motion judge thoroughly
    reviewed all of the material. His findings regarding what pleadings were facts,
    and what were legal conclusions or attempts to characterize facts to fit a
    legal theory, were fair and proper and fell within his purview. I will deal
    with specific factual issues raised on appeal as they relate to the negligence
    and vicarious liability claims when I address those claims below.


[77]

Further, he properly applied the plain and obvious test, based on the
    pleaded facts that he accepted as true. This case is distinguishable from
Miguna
    v. Toronto Police Services Board
, 2008 ONCA 799, 243 O.A.C.
    62, where the motion judges error was assessing whether the pleaded
    allegations were provable, rather than accepting them as true.

[78]

As the motion judge made no error in his approach, I would dismiss the
    appellants argument that he misapplied r. 21 principles and the plain and
    obvious test.

(3)

Did the motion judge err in finding that the law of Bangladesh, and not
    the law of Ontario, applies to the claims?

[79]

The
    appellants submit that the motion judge erred in his choice of law analysis and
    that the law of Ontario should govern the claims. On appeal, they raise
    essentially two arguments.

[80]

First,
    the motion judge misapplied the
lex loci delicti

test from
Tolofson
, which mandates
    that the law to be applied in torts is the law of the place where the activity
    occurred: at p. 1050. The appellants argue that the essence of their claim
    against Loblaws is that the retailers wrongful activities, actions and
    decisions giving rise to liability for what they describe as novel torts,
    took place in Ontario. It was in Ontario that Loblaws is alleged to have
    assumed responsibility for worker safety, determined the scope of the audits,
    and decided not to require New Wave to take remedial action. Similarly, they
    say that the gravamen of their claim against Bureau Veritas relates to its
    negligent provision of professional advice, audit reports and other services to
    Loblaws, which were received in Ontario. It follows, they say, that the
lex
    loci delicti
of the claims is the law of Ontario, not Bangladesh. According
    to the appellants, the motion judge erred by failing to accept the pleading
    that all of Loblaws impugned activities and the most significant of Bureau
    Veritas activities took place in Ontario.

[81]

Second,
    in the alternative, even if the law of Ontario is not the
lex loci delicti
,
    the court should have exercised its discretion to depart from the general rule because
    applying Bangladeshi law would result in an injustice. As they did before the
    motion judge, the appellants argue on appeal that the application of Sharia law
    principles and the unavailability of punitive damages offend principles of equality
    and essential justice. In addition, they submit for the first time on appeal
    that the injustice exception should apply because the effect of the Appellate
    Divisions decision in
Bangladesh Beverage
was to change the
    applicable limitation period from six years to one year to the detriment of the
    appellants.

[82]

I
    would reject this ground of appeal.

(a)

Is the law of Bangladesh the
lex loci delicti
of the claims?

[83]

The
    parties agree that the Supreme Courts decision in
Tolofson

provides
    the framework for the choice of law analysis in tort. In
Tolofson
, the
    Supreme Court held that, generally, tort claims should be governed by the
    substantive law of the place where the activity or wrong occurred, that is to
    say, the
lex loci delicti
: at pp. 1049-50. The court also recognized a
    narrow exception, namely, where its application would give rise to an
    injustice:
Tolofson
, at pp. 1052, 1054. La Forest J. wrote, at pp.
    1049-50:

[I]t seems axiomatic to me that, at least as a general rule,
    the law to be applied in torts is the law of the place where the activity occurred,
    i.e., the
lex loci delicti
. There are situations, of course, notably
    where an act occurs in one place but the consequences are directly felt
    elsewhere, when the issue of where the tort takes place itself raises thorny
    issues. In such a case, it may well be that the consequences would be held to
    constitute the wrong.

[84]

La
    Forest J. acknowledged, at p. 1054, that a strict application of the
lex
    loci delicti
rule may give rise to an injustice at the international
    level, but envisaged few cases that would warrant departing from the general
    rule:

I have already indicated, of course, that I view
    the
lex loci delicti
rule as the governing law.
    However,
because a rigid rule on the international
    level could give rise to injustice, in certain circumstances, I am not averse
    to retaining a discretion in the court to apply our own law to deal with such
    circumstances. I can, however, imagine few cases where this would be necessary.

[85]

In
    my view, the motion judge in this case made no error in concluding that the
    place where the wrongful activity occurred was Bangladesh. In essence, the
    claim against Loblaws is that it owed a duty of care to the employees of New
    Wave and to anyone else at the Rana Plaza premises to protect their safety
    because: it knew that garment manufacturing often took place in unsafe
    conditions in Bangladesh; it adopted a mandatory Supplier Code of Conduct at
    least in part to protect employee health and safety; it undertook limited
    audits to implement its Supplier Code of Conduct; and it had control over its
    suppliers because it could refuse to accept goods if the Supplier Code of Conduct
    or local laws were disobeyed. By failing to protect New Wave workers and others
    at Rana Plaza, Loblaws breached its duty. It was also vicariously liable for
    the failure of Pearl Global and New Wave to protect New Waves workers and
    others at Rana Plaza.

[86]

Similarly,
    the claim against Bureau Veritas is that it too owed a duty of care to the New
    Wave employees and others at Rana Plaza because it knew or ought to have known
    that they would be in danger if it failed to conduct the audit process in a
    reasonable and thorough fashion, including reporting on structural defects in
    the factory premises and ensuring that any issues of non-compliance were
    reported back to Loblaws and addressed.

[87]

In
    his analysis, the motion judge relied on the principle of tort law that there
    is no actionable wrong without injury. He reasoned that the alleged duty was
    owed to the people in Bangladesh who were killed or injured there. The impugned
    decisions, it was alleged, resulted in those deaths and injuries. The wrong
    therefore occurred in Bangladesh.

[88]

The
    appellants focus on La Forest J.s language in
Tolofson
, quoted in
    part above, where he notes that while the consequences of the wrong are often
    felt elsewhere, that does not determine the
lex loci delicti
. However,
    La Forest J. was referring to consequences that may be felt by plaintiffs who
    have suffered injury in one place, but recover in another. The law of the place
    of recovery is not the
lex loci delicti
, even though the plaintiff may
    continue to suffer from the injury there. This explanation regarding the
    consequences of the wrong does not undermine the general rule that the place of
    the wrong is where the wrongful activity occurred. Here that alleged activity
    was implementing decisions in Bangladesh that are said to have caused death and
    injury from the collapse of Rana Plaza.

[89]

A
    similar argument to the one raised by the appellants in this case was made in a
    different factual context in
Leonard v. Houle
(1997), 36 O.R. (3d) 357
    (C.A.), leave to appeal refused, [1998] S.C.C.A. No. 19. In
Leonard
,
    this court held that the law of Quebec governed a tort claim arising out of a
    motor vehicle accident that occurred in Quebec, even though the alleged
    tortious conduct of some of defendants commenced in Ontario. Charron J.A.
    observed, at pp. 364-65:

While there may be situations
    where the issue of where the tort takes place will raise thorny issues, and
    perhaps also raise issues of public policy, this is not such a case.
It
    seems clear to me that the wrong occurred in the Province of Quebec because the
    injury occurred there. The plaintiffs are not suing because the Ottawa police
    breached their duty when they commenced a chase while they were in the Province
    of Ontario, nor are they suing because the Ottawa police failed to adequately
    warn the Quebec police authorities of the ongoing chase. They are suing because
    Leonard was injured in the resulting car accident in the Province of Quebec.
The
    activity which took place in the Province of Ontario, even if found to
    constitute a breach of duty on the part of the Ottawa police, does not amount
    to an actionable wrong.
There is no actionable wrong without the injury.
The
    place where the activity took place which gives rise to the action is in the
    Province of Quebec. [Emphasis added.]

[90]

Similarly
    in this case, it was the injury in Bangladesh that crystallized the alleged
    wrong. As the Supreme Court reasoned in
Moran v. Pyle National (Canada)
    Ltd.
, [1975] 1 S.C.R. 393, at p. 404, a plaintiff does not sue because of
    the defendants carelessness, but because he or she has been hurt.

[91]

In
    my view, the motion judge did not mischaracterize the appellants claims. He
    was not obliged to accept the appellants characterization of where the
    negligence occurred. That is a legal conclusion based on the pleaded facts. The
    motion judge is only obliged to accept factual pleadings, not legal conclusions.
    This is a case brought by Bangladeshi residents for damages resulting from a tragic
    building collapse in Bangladesh. The appellants allege that the respondents
    failed to conduct proper audits and take remedial action to protect them in
    Bangladesh. The
lex loci delicti
is therefore the law of Bangladesh.

(b)

Did the motion judge err by failing to exercise his discretion to
    decline to apply Bangladeshi law under the injustice exception?

[92]

In
    the alternative, if Bangladeshi law is the
lex loci delicti
, the
    appellants also submit that the motion judge erred by failing to exercise the
    exceptional discretion referred to in
Tolofson
.

[93]

I
    would not give effect to this submission. The motion judge fully considered and
    rejected the two prongs of this submission: that Sharia law mandates an unequal
    distribution of damages to men and women and would therefore discriminate
    against women claimants; and that the unavailability of punitive damages
    offends principles of essential justice.

[94]

On
    the Sharia law issue, the motion judge described how it could not affect the
    liability claim and could only have an impact on a very small subset of female
    claimants, namely female family class members who are daughters of a deceased
    in cases where they have a male sibling or siblings. He concluded that because
    Sharia law would not affect the rights of most of the claimants, there was no
    public policy reason not to apply Bangladeshi law to the claims of those
    claimants. He accepted the respondents argument that any offensive provisions
    of Sharia law could be severed and not applied in calculating damages for those
    claimants who would be affected, if the case got that far. The motion judge
    also expressed that the issue was essentially moot because the claims were
    either statute-barred or not legally viable.
[7]


[95]

The
    motion judge also rejected the appellants argument that the unavailability of
    punitive damages under Bangladeshi law would result in an injustice. First, he
    was not convinced that punitive damages were unavailable in Bangladesh. Second,
    because of the nature of the claims, he concluded that if the appellants were
    awarded a $2 billion compensatory award based on breach of a novel duty of care,
    it was unlikely that punitive damages would also be awarded. Finally, he observed
    that the absence of the availability of punitive damages is not the type of
    issue that offends Canadian fundamental values. La Forest J.s statement in
Tolofson
,
    at p. 1058, supports this conclusion:

True, it may be
    unfortunate for a plaintiff that he or she was the victim of a tort in one
    jurisdiction rather than another and so be unable to claim as much compensation
    as if it had occurred in another jurisdiction. But such differences are a
    concomitant of the territoriality principle.

[96]

I
    see no basis on which to interfere with the motion judges discretionary
    decision not to invoke the injustice exception in these circumstances. The
    motion judge fully addressed and considered this issue and decided that this
    was not one of the rare cases where the court should make an exception to the
    proper application of the
lex loci delicti
rule on the basis that
    applying Bangladeshi law would cause an injustice that would offend Canadian
    values. In my view, he made no error and came to a proper conclusion on this issue.

[97]

Finally,
    the appellants now raise a third point that they did not raise before the
    motion judge: if the decision of the Appellate Division of the Supreme Court of
    Bangladesh in
Bangladesh Beverage
changed the applicable limitation
    period from six years to one year to the prejudice of the appellants, that
    created an injustice and is offensive to Canadian perceptions of essential
    justice. They argue that because their claims were brought in time if the
    limitation period is six years, it would be unfair for a change in the law
    after they commenced the action to deprive them of their claims.

[98]

I
    would reject this ground for invoking the injustice exception because I am
    satisfied that the decision of the Appellate Division confirmed the High Court Divisions
    decision that the one-year limitation period applies to these types of claims. I
    will address the substance of this argument in the context of my discussion
    regarding the limitation period. It is therefore unnecessary to address the
    appellants failure to raise this issue before the motion judge, which would
    have militated against entertaining it on appeal: see
Kaiman v. Graham
, 2009 ONCA 77, 245 O.A.C. 130, at para. 18.

[99]

In
    summary, under choice of law principles, I agree with the motion judge that Bangladeshi
    law applies to the tort claims in this case.

(4)

Did the motion judge err by finding that the negligence and vicarious
    liability claims are statute-barred by Bangladeshs
Limitation Act, 1908
?

[100]

The appellants
    argue that the motion judge erred in two principal ways in his analysis of the
    applicable limitation period for the claims under Bangladeshi law. First, he
    erred in concluding that the claims were subject to a one-year limitation
    period under Articles 21 and 22 of the
Limitation Act, 1908
, not a
    six-year limitation period under Article 120. Second, he erred in not finding
    that s. 13 of the
Limitation Act, 1908
tolled the claims against
    Loblaws because of its absence from Bangladesh.

[101]

I would reject
    both of these arguments.

(a)

Is the limitation period one year under Articles 21 and 22 or six years
    under Article 120 of the
Limitation Act, 1908
?

[102]

The
    claims by the appellants are of two kinds:

one is by claimants who represent
    both the estates and the family members and other dependents of persons who
    suffered wrongful death and injury in the Rana Plaza collapse, and the second
    is by claimants who themselves were injured but not killed, for damages to
    compensate for death or injuries suffered in the Rana Plaza collapse.

[103]

The preamble
    to the
Fatal Accidents Act, 1855
states that before its enactment
    there was no cause of action in Bangladesh at common law for wrongful death.
    Subject to discussion regarding the meaning of one sentence in the High Court
    Divisions decision in
Bangladesh Beverage
, it was common ground among
    the experts on Bangladeshi law that there is no cause of action available at
    common law for wrongful death, and the only way to make such a claim is under
    the
Fatal Accidents Act, 1855
.

[104]

The
    parties agree that the
Limitation Act, 1908
is the applicable
    limitations statute in Bangladesh.
Briefly summarized, s. 3 of
    the
Limitation Act, 1908
provides that a lawsuit
    shall be dismissed if it is instituted  after the period of limitation
    prescribed thereof by the first schedule of legislation.
Articles 21,
    22 and 120 of the first schedule are the provisions that the parties submit on
    appeal are applicable to the claims. They provide as follows:



Description of suit.

Period of limitation.

Time from which period begins to run.



.





21. By executors,
          administrators or representatives under the
Fatal Accidents Act
, 1855.

One year.

The date of the death of the
          person killed.



22. For compensation for any
          other injury to the person.

One year.

When the injury is committed.



.





120. Suit for which no
          period of limitation is provided elsewhere in this schedule.

Six years.

When the right to sue
          accrues.



[105]

On their face and by their plain wording, Articles 21 and 22 apply
    respectively to wrongful death and personal injury claims, each providing a
    one-year limitation period. However, the appellants submit, based on the
    evidence of their experts on Bangladeshi law, that the High Court Division held
    in
Bangladesh Beverage
that the six-year limitation period applied to
    the claims in that case and a six-year limitation period would therefore apply
    in this case as well.

[106]

In
Bangladesh
    Beverage
, a Bangladesh Beverage truck struck and killed a pedestrian on
    December 3, 1989. The deceaseds family commenced an action on January 1, 1991,
    immediately following a court holiday from December 1 to 31, 1990. When a
    limitation period expires during a court holiday, s. 4 of the
Limitation
    Act, 1908
deems a suit to be filed on time if it is filed the day after
    the holiday. A limitation issue arose because the plaintiffs initially
    misidentified the corporate defendant, Bangladesh Beverage, and only sought to
    properly add the company as a defendant some 13 years after the accident
    occurred
.
To decide the issue, the court
    first had to determine whether the original action was commenced in time, and
    then whether a defendant could be added to a properly commenced action after
    the limitation period had expired.

[107]

The High Court
    Division first found, at para. 63, that because the original action was
    commenced on the day the courts reopened after the expiry of the one-year period
    from the accident, it was commenced in time:

It appears that the period for
    limitation expired (one year prescribed under Article 22) on 3-12-1990, the
    last date filing suit having fallen during the vacation of the Court, as such,
    filing of the suit on 1st January, 1991 i.e. on re-opening day, was perfectly
    within time.

[108]

The court then went
    on, at para. 63, to explain that a party can be added at any time during the
    continuation of the suit, including an appeal, if the suit was commenced within
    the limitation period, and that the addition will relate back to the date the
    suit was instituted. The High Court Division therefore concluded that the defendant,
    Bangladesh Beverage, was properly added.

[109]

Having decided
    that the action was filed and Bangladesh Beverage was added within the one-year
    limitation period, the court continued on, at para. 64, to discuss an argument
    raised by counsel regarding the limitation period that applies to tort claims
    generally. The High Court Division referred to an earlier decision of the
    Appellate Division,
Jamila Khatun v. Rustom Ali

(1996), 48 Dhaka L.R. 110 (S.C. Bangladesh App. Div.)
,
    where the six-year limitation period under Article 120 was found to apply. I
    will reproduce para. 64 in full as it is the basis for the appellants
    position:

We have gone through the law of tort and we do not find law of
    tort itself prescribe for any limitation. It is the acts under which occurrence
    took place, the legal proceeding is guided by that law. The parties agreed that
    the instant occurrence is [tortious] liability and according to me, [tortious]
    liability is a continuous compensatory liability can be brought within a
    reasonable as there is no limitation prescribed under law of Tort, as such,
    Article 120 of the Limitation Act i.e. where there is no prescribed limitation,
    action can be brought within six years from the date of occurrence is
    applicable. Similar question was called to answer by the Appellate Division in
    the case of
Jamila Khatun vs Rustom Ali,
48 DLR (AD) 110
wherein the Appellate Division held as No
    such corresponding provisions exists in respect of suits filed by a Muslim for
    corresponding relief. In our opinion, residuary Article 120 of the First
    Schedule, providing for a period of limitation of 6 years from the time when
    the right to suit accrues in respect of a suit for which no period of
    limitation is provided elsewhere in the first schedule will be applicable to a
    suit for maintenance under Ordinance of 1985.
[8]
As such, we are of the view that the submission of Mr Sheikh Fazle Noor Tapash,
    learned Advocate is of no substance.
This is not a case either under
Motor
    Vehicle Act
or under
Fatal Accident Act
, as such, Article 22 of
    the
Limitation Act
has no manner of application on the facts of the
    given case
. The appellant was impleaded in the suit as per law. [Emphasis
    added.]

[110]

The appellants
    experts suggested that the High Court Division was referring to the
Bangladesh
    Beverage
case when it stated, at para. 64: This is not a case either
    under
Motor Vehicle Act
or under
Fatal Accident Act
, as such
    Article 22 of the
Limitation Act
has no manner of application on the
    facts of the given case. In my view, the court was not referring to the
    Bangladesh Beverage case, which was a claim for personal injury and wrongful
    death caused by a motor vehicle accident. It was clearly referring to the
Jamila
    Khatun
case that it had just quoted, which was a suit for maintenance
    (similar to spousal support) under the
Family Courts Ordinance
(Act.
    No. XVIII of 1985), and did not arise from a motor vehicle accident or involve
    a claim for injury or wrongful death.

[111]

This apparent
    misunderstanding of para. 64 of the High Court Divisions reasons is what has
    led the appellants and their experts to assert that the High Court Division found
    that the claims in
Bangladesh Beverage
were general tort claims and
    that the six-year limitation period under Article 120 applied, rather than the
    one-year period under Articles 21 and 22.

[112]

To complete the
    jurisprudential picture, Bangladesh Beverage sought leave to appeal the High
    Court Divisions decision to the Appellate Division of the Supreme Court of
    Bangladesh on a number of grounds, including that because Bangladesh Beverage
    was added as a defendant 12 years after the institution of the action (13 years
    after the accident), the claim was statute-barred against it. The Appellate
    Division disposed of the leave petition with observation and modification, reduced
    the amount of the judgment awarded, and concluded its reasons, at para. 33,
    with the following:

In the result, the leave petition
    is disposed of with the observation and modification made in the body of this
    judgment and accordingly, the plaintiffs-respondents are entitled to get a
    decree of Taka 1,71,47,008.

[113]

In the body of
    the judgment, the Appellate Division discussed the limitation issue, finding
    that the limitation period was one year. The court concluded that the suit was
    brought in time by relying on s. 4 of the
Limitation Act, 1908
to
    extend the limitation period during the courts holiday closure. The court
    explained, at para. 19, why the suit was brought within the applicable one-year
    limitation period:

In the instant case the limitation
    period expired on 3-12-1990, the last date of filing the suit having fallen
    during the vacation of the court and, as such, filing of the suit on 1st
    January of 1991 i.e. on the re-opening day was perfectly within the period of
    limitation. Therefore, there is no merit in the submission of the learned
    Advocate for the petitioner that the suit is barred by limitation.

[114]

The court then
    went on to discuss the rules regarding adding a party after the suit was
    instituted and affirmed the High Court Divisions decision that a party can be
    added at any time, as long as the original action was instituted within the
    limitation period, and that the addition will relate back to the date the suit
    was instituted: at para. 25. The Appellate Division referred to its earlier
    decision in
Nurun Nahar v. Fazlur Rahman
(1979)
, 3 Bangladesh S.C.R. 135 (App. Div.), where the court
    explained that if the claim to be added was barred on the date the original
    action was instituted, the amendment could not be allowed. However, if the
    proposed added claim is only barred on the date the amendment is sought, then
    the amendment may be allowed.

[115]

As the Appellate
    Division found that the original claim in
Bangladesh Beverage
was
    brought within the applicable one-year limitation period, the later amendment
    to add Bangladesh Beverage was allowed and related back to the date the action
    was instituted.

[116]

Having
    specifically determined that the limitation period in the case was one year,
    the Appellate Division made no reference to the applicability of the six-year
    limitation period under Article 120 of the
Limitation Act, 1908
.

[117]

In my view, the
    motion judge made no error of law in following the decision of the Appellate
    Division and the clear language of Bangladeshs
Limitation Act, 1908
.
    The appellants position that the High Court Division had found that the
    six-year limitation period applied is based on a misreading of one paragraph of
    that courts reasons. Elsewhere, those reasons make it clear that the one-year
    period applied.

[118]

I return now to
    the appellants third basis for saying that the court should apply the
    injustice exception to the
lex loci delicti
rule. The appellants argue
    that when this action was commenced, the limitation period was six years
    according to the High Court Division in
Bangladesh Beverage
, and that
    the Appellate Division subsequently changed the applicable period to one year. For
    the reasons I have just explained, I would give no effect to this submission.

(b)

Was the one-year limitation period tolled against Loblaws by s. 13 of
    the
Limitation Act, 1908
?

[119]

The appellants
    also argue that if the applicable limitation period is one year, the motion
    judge erred by rejecting the submission that the limitation period was tolled
    against Loblaws by s. 13 of the
Limitation Act, 1908
.
Section 13 provides that claims are
    tolled while a defendant is absent from Bangladesh:

13. In computing the period of
    limitation prescribed for any suit, the time during which the defendant has
    been absent from Bangladesh and from the territories beyond Bangladesh under
    the administration of the Government shall be excluded.

[120]

The expert
    witnesses proffered no case law from a Bangladeshi court interpreting or
    applying s. 13.

[121]

The appellants
    rely on a decision from the Calcutta High Court from 1887,
Atul Kristo Bose
    v. Lyon & Co.
(1887), 14 Ind. L.R. (Cal.) 457 (H.C.), which applied an
    analogous provision of the Indian
Limitation Act, 1877
(Act XV of
    1877). In that case, the court held that the provision applied to toll the
    limitation period against the defendants who carried on their unincorporated
    business in England and never resided in India. The court acknowledged that its
    interpretation could result in no limitation period applying to a defendant who
    lived out of the country, but reasoned that the words of the provision were
    express and applied to the defendants.

[122]

However, in
Turner
    Morrison & Co. v. H. I. Trust Ltd.
, [1972] 3 S.C.R. (Ind.) 711, the
    Supreme Court of India directly addressed the application of its provision
    analogous to s. 13 to a corporation and stated at para. 36:

Section 15 (5) of the
Limitation
    Act
, 1963 [equivalent to s. 13 of Bangladeshs
Limitation Act, 1908
]
    can be viewed in one of two ways i.e. that that provision does not apply to
    incorporated companies at all or alternatively that the incorporated companies
    must be held to carry on their [activities] and thus being present in all those
    places.

[123]

In that case,
    the defendant was an English investment corporation which had invested large
    sums in the plaintiff, an Indian corporation. The defendant corporations board
    of directors had held meetings in India now and then, and its representatives
    attended the general meeting of shareholders of the plaintiff company in India.
    The court concluded that under those circumstances, the defendant corporation
    must be held to have been residing in this country and consequently was not
    absent from this country: at para. 36. This decision from the Supreme Court of
    India would be considered persuasive authority by Bangladeshi courts.

[124]

Here, the
    appellants pleaded that Loblaws has engaged in garment manufacturing activities
    in Bangladesh since at least 2006 and that its representatives visited New Wave
    on a number of occasions to conduct inspections and deal with ongoing issues
    regarding the quality and delivery of the clothing. Therefore, accepting
Turner
    Morrison & Co.
as persuasive authority and applying it to the facts of
    this case, Loblaws would be held to reside not only in Ontario but also in
    Bangladesh for the purpose of determining whether it was absent from Bangladesh
    within the meaning of s. 13 of the
Limitation Act, 1908
.

[125]

The appellants
    submitted in oral argument that because Loblaws representatives were in
    Bangladesh at one time but then left, Loblaws became absent when they left.
    There are two reasons why that argument cannot be accepted. First, the logic is
    contrary to the analysis in
Turner Morrison & Co.
, which uses the
    presence of representatives from time to time to establish residence. Second,
    if the argument is that Loblaws left Bangladesh after the collapse of Rana
    Plaza, there is no evidence or pleading that speaks to that time period.

[126]

For these
    reasons, I am satisfied on the record before the court that it is plain and
    obvious that under Bangladeshi law, the one-year limitation period is not
    tolled by s. 13 of Bangladeshs
Limitation Act, 1908
.

(5)

Did the motion judge err by finding that it is plain and obvious that
    the claims in negligence and vicarious liability will fail under Bangladeshi
    law?

[127]

Because I have
    found that the claims brought by the appellants against both respondents are
    statute-barred under Bangladeshi law, save for the claims of class members born
    on or after April 22, 1996, the legal viability of the claims themselves is now
    only relevant for that limited group of class members.
[9]

[128]

To address the
    issue of the legal viability of the claims, it is helpful to restate the courts
    task. Having found that the court is to apply Bangladeshi law, the issue is to
    determine whether it is plain and obvious that the tort claims asserted against
    Loblaws and Bureau Veritas could not succeed under Bangladeshi law.

(a)

Is the claim in negligence against Loblaws bound to fail under
    Bangladeshi law?

(i)

Loblaws

Overview of the Claim

[129]

The appellants
    submit that Loblaws owed and breached a duty of care to the class members to
    ensure their safety. They allege that by adopting CSR Standards, visiting the
    New Wave factories, and controlling the scope of audits, Loblaws voluntarily undertook
    to ensure that the buildings in which Joe Fresh garments were made were
    structurally sound and met Loblaws minimum standards for worker and building
    safety.

The Legal Principles

[130]

To determine
    whether it is plain and obvious that the appellants negligence claim would
    fail under the law of Bangladesh, it is necessary to first determine the
    substantive content of the tort under Bangladeshi law. The expert witnesses agreed
    that there is no case decided by a Bangladeshi court that has imposed a duty of
    care in circumstances similar to the ones presented by the pleading in this
    case. Nor is there authority from India or Pakistan in which a court has done
    so. However, there are statements by the Supreme Court of India, on which the
    appellants rely, that speak to that courts expansive approach to tort law and
    the duty of care.

[131]

England has a
    robust and developing jurisprudence on the parameters for imposing a duty of
    care, including decisions that address whether and in what circumstances a duty
    may be owed by one party to protect another party from the harmful actions of a
    third party. However, no English court has imposed a duty of care in
    circumstances like those in the present case. The experts acknowledged that the
    duty of care Loblaws allegedly owed to the class members would be novel.

[132]

Against this
    backdrop, the issue on this r. 21 motion is therefore whether it is plain and
    obvious that a Bangladeshi court, applying Bangladeshi law and looking to
    persuasive English and Indian jurisprudence, would not expand the law beyond
    its current application to impose a duty of care on the respondents to protect the
    appellants from the damage caused by structural defects at Rana Plaza.

[133]

Before embarking
    on this analysis, I emphasize that the evaluation of the legal viability of the
    claims does not dwell on the tragic event that occurred with the collapse at
    Rana Plaza and the terrible losses that flowed from it. That should not be
    taken as minimizing their gravity. The question for the court arises despite
    the extent and seriousness of the loss, because if the appellants claims
    against the respondents do not have a reasonable prospect of succeeding in law,
    then the claims cannot proceed.

[134]

In addressing
    and deciding the issue, the motion judge turned to the expert evidence on
    Bangladeshi law, which included the case law from Bangladesh and relevant
    jurisprudence from India, and very extensive opinion evidence tendered by all
    three parties on the duty of care under English common law.

[135]

The motion judge
    rejected as unsupported Mr. Hossains opinion, proffered by the appellants,
    that a Bangladeshi court, relying on
Bangladesh Beverage
, would be
    open to recognizing a new tort consistent with the principles of justice,
    equity and good conscience, and that the contract between Loblaws and Bureau
    Veritas would support the finding of a duty of care owed to the class members.
    He also rejected Mr. Hossains reliance on certain Indian cases as supporting a
    duty of care on the basis that the cases bore no reasonable resemblance to the
    facts of this case.

[136]

The motion judge
    explained that while the parties experts on Bangladeshi law came to opposite
    conclusions about the viability of the claims, their methodologies were similar:
    they agreed that the claims were novel and that the courts of Bangladesh would
    be heavily influenced by the development of the law in England. As a result,
    the motion judge considered the experts opinions based on the English case
    law, and found that he preferred and accepted the opinion of the respondents
    expert, Dr. Goudkamp, and did not accept the opinion of the appellants expert,
    Dr. Morgan.

[137]

Dr. Goudkamps
    opinion was that the pleaded facts could not support finding a duty of care
    owed by either of the respondents to the appellants based on the tests in the
    English case law. Dr. Morgans opinion was the opposite. Although they were not
    in complete agreement about the applicable tests, their disagreement was
    primarily based on whether a court would conclude: first, that the facts were
    sufficient to establish foreseeability of harm and proximity and that policy
    factors favoured finding a duty of care; second, that the respondents had
    assumed responsibility for the appellants well-being; and third, that
    recognizing a duty of care owed by a purchaser of manufactured goods to keep employees
    of its sub-supplier and other people in the area of the sub-suppliers factory safe,
    would amount to an incremental development of the law.

[138]

The basis of the
    English courts current approach to the question whether a duty of care is owed
    in any particular situation was described by the House of Lords in
Caparo
    Industries Plc v. Dickman
, [1990] 2 A.C. 605 (H.L. (Eng.)) as requiring
    consideration of three factors: foreseeability of harm, a relationship of
    proximity, and whether it is fair, just and reasonable that the law should
    impose a duty of a given scope upon the one party for the benefit of the other:
    at pp. 617-18. The court emphasized the importance of clearly defining the
    scope of the duty, stating at p. 627:

It is never sufficient to ask
    simply whether A owes B a duty of care. It is always necessary to determine the
    scope of the duty by reference to the kind of damage from which A must take
    care to save B harmless.

[139]

Special rules
    apply when the damage is caused by a third party and the issue is whether there
    was a duty of care owed by the defendant to prevent the third party from
    harming the plaintiff. In the Supreme Court decision in
Michael v. Chief
    Constable of South Wales Police
, [2015] UKSC 2, [2015] A.C. 1732, a woman
    was murdered by her ex-boyfriend after the police failed to respond promptly to
    her emergency call for help. The issue was whether the police had owed the
    woman a duty to take reasonable care to protect her safety once they knew she
    was in danger.

[140]

In finding that
    no duty of care arose in the circumstances of that case, the Supreme Court
    explained that the general rule is that there is no duty to take action to
    protect another person from harm by a third party:
Michael
, at para.
    97; see also
Mitchell v. Glasgow City Council
, [2009] UKHL 11, [2009]
    A.C. 874, at para. 15. Subject to two exceptions, the law does not impose
    liability for omissions:
Michael
, at para. 97.

[141]

The first
    exception arises when the defendant was in a position of control over the third
    party and should have foreseen the likelihood of the third party causing damage
    to someone in close proximity if the defendant failed to take reasonable care
    in the exercise of the control, as occurred in
Dorset Yacht Co Ltd. v. Home
    Office
, [1970] A.C. 1004 (H.L. (Eng.)):
Michael
, at para. 99.

[142]

In that case,
    the Home Office was held liable for the damage caused to the plaintiffs boat
    when young boys in detention on an island escaped in the boat and damaged it. The
    House of Lords found that the boys were under the control of the Home Offices
    officers, that it was foreseeable that the boys would cause damage to the
    plaintiffs property if they escaped, and that there was no policy reason the
    Home Office should have immunity from its responsibility.

[143]

The second
    exception identified in
Michael
, at para. 100, stems from the House of
    Lords decision in
Hedley Byrne & Co. Ltd. v. Heller & Partners
,
    [1964] A.C. 465 (H.L. (Eng.)). It occurs when the defendant assumes a positive
    responsibility to safeguard the plaintiff and arises in relationships where
    there is a positive duty to act, such as fiduciary or doctor/patient
    relationships:
Michael
, at para. 100. While this exception is known as
    the assumption of responsibility doctrine, the court observed in
Michael
,
    at para 100, that:

There has sometimes been a
    tendency for courts to use the expression assumption of responsibility when
    in truth the responsibility has been imposed by the court rather than assumed
    by [the defendant].

The court also emphasized that this exception should
    not be expanded artificially:
Michael
, at para. 100.

[144]

Superimposed on
    the duty of care analysis is the principle that the law of negligence should
    develop incrementally and by analogy to existing categories of duty, rather
    than by giant steps; the court should examine where the law has gone or
    refrained from going and why, and whether policy considerations and overall
    coherence support an extension of liability:
Michael
, at para.102.

[145]

The appellants
    submit that the motion judge also erred by failing to apply the assumption of
    responsibility analysis to the pleaded facts, and that he should have found
    that a novel duty of care could be owed by the respondents on that basis. They
    rely on the English Court of Appeals seminal decision in
Chandler v. Cape
    Plc
, [2012] EWCA Civ. 525, [2012] 1 W.L.R. 3111, for support.
Chandler
is one of the first in a series of cases in which the English courts have
    considered whether a parent company assumed responsibility for the actions of
    its subsidiary in relation to people who foreseeably suffered harm as a result
    of those actions: see
Chandler
, at para. 2.
Chandler
was
    discussed extensively by the parties English law experts.

[146]

The plaintiff in
Chandler
was a former employee of Cape Building Products Ltd. (Cape
    Products), a defunct company that had manufactured bricks and asbestos
    products and had been a subsidiary of the defendant, Cape Plc (Cape). While
    working as a brick loader at Cape Products, the plaintiff was exposed to
    asbestos dust that migrated to his work area from an open-sided factory on site;
    he later contracted asbestosis. The trial judge found that the parent company should
    have foreseen the risk of injury from asbestos exposure.

[147]

The issue for
    the court on appeal was whether the parent company had, by its actions, taken
    on a direct duty to the employees of its subsidiary to advise on or ensure a
    safe system of work for them. The parent company employed both a scientific and
    a medical officer who were responsible for health and safety issues for the
    employees of all the subsidiary companies. On the basis of the evidence as a
    whole, the trial judge found that the parent dictated the subsidiarys health
    and safety policy and retained overall responsibility for ensuring that the
    employees of its subsidiaries were not exposed to the risk of harm from asbestos
    exposure.

[148]

The Court of
    Appeal described the four factors that led it to impose responsibility on the
    parent company for the health and safety of its subsidiarys employees. They
    included:

1)

The businesses of the
    parent and subsidiary were in a relevant respect the same;

2)

The parent had or
    ought to have had superior knowledge on some relevant aspect of health and
    safety in the particular industry;

3)

The parent company
    knew or ought to have known that the subsidiarys system of work was unsafe; and

4)

The parent knew or
    ought to have foreseen that the subsidiary or its employees would rely on the
    parent using its superior knowledge for the employees protection: at para. 80.

For the purposes of the last factor, the court
    explained that it is not necessary to show a practice by the parent of
    intervening specifically in the health and safety policies of the subsidiary. The
    court will examine the relationship between the parties more widely, and may
    find reliance where the parent intervened in other aspects of the subsidiarys
    business such as trading operations, including production or funding: at para.
    80.

[149]

The Court of
    Appeal found that the circumstances of the relationship between Cape and Cape
    Products met the test to establish a duty owed by the parent company to its
    subsidiarys employee. Arden L.J. explained, at paras. 78-79:

Given Capes state of knowledge about the Cowley works, and its
    superior knowledge about the nature and management of asbestos risks, I have no
    doubt that in this case it is appropriate to find that Cape assumed a duty of
    care either to advise Cape Products on what steps it had to take in the light
    of knowledge then available to provide those employees with a safe system or to
    ensure that those steps were taken. The scope of the duty can be defined in
    either way. Whichever way it is formulated, the injury to Mr. Chandler was the
    result. As the judge held, working on past performance and viewing the matter
    realistically, Cape could, and did on other matters, give Cape Products
    instructions as to how it was to operate, with which, as far as we know, it
    complied.

In these circumstances, there was,
    in my judgment, a direct duty of care owed by Cape to the employees of Cape
    Products. There was an omission to advise on precautionary measures even though
    it was doing research and that research had not established (nor could it
    establish) that the asbestosis and related diseases were not caused by asbestos
    dust.

[150]

Commenting on
    the decision, the editors of
Clerk and Lindsell
on Torts
, 22d ed.
    (London: Sweet & Maxwell, 2018) drew the conclusion that the factors did
    not exhaust the possibilities, and the case merely illustrated the way in which
    the requirements of
Caparo Industries Plc v Dickman
may be satisfied
    between a parent company, and the employee of a subsidiary: at para. 13-08.

[151]

There have been
    some developments in the English case law since
Chandler
on the duty
    to protect from harm caused by a third party, including four recent parent/subsidiary
    cases. Importantly, three of these cases involve actions against English parent
    companies for harm caused by their subsidiaries operating in foreign
    jurisdictions.

[152]

The first of the
    four cases is
Thompson v. Renwick Group Plc
, [2014] EWCA Civ. 635, a case
    like
Chandler
where an employee who had handled asbestos during the
    1970s and suffered damage to his health, later sought to recover from the
    parent holding company of his employer. The Court of Appeal distinguished
Chandler
,
    holding that no duty of care arose in the case.

[153]

The court found
    first that the parents appointment of a director of the subsidiary with
    responsibility for health and safety matters did not amount to the assumption
    of a duty of care by the parent: at paras. 24-25. Second, it affirmed the
    three-part
Caparo
test for imposing a duty of care and discussed its application
    in
Chandler
. Third, it concluded that the case before it was entirely
    distinguishable from
Chandler
: at paras. 28-29. Tomlinson L.J.
    explained that unlike in
Chandler
, the parent company was not in the
    same business as the subsidiary nor did it have superior knowledge about the
    risks of handling asbestos. There was therefore no basis for the subsidiary to
    rely on the parent to protect the employees from risk of injury:
Thompson
,
    at paras. 37-38.

[154]

The most recent
    opinions on the issue of the duty to protect come from three decisions of the
    English Court of Appeal involving English parent companies whose subsidiaries
    operations either caused or failed to prevent harm in foreign jurisdictions:
    see
Lungowe v. Vedanta Resources Plc
, [2017] EWCA Civ. 1528, [2018] 1
    W.L.R. 3575,
[10]

Okpabi v. Royal Dutch Shell Plc
, [2018] EWCA Civ. 191, [2018] Bus.
    L.R. 1022,
[11]
and
AAA v. Unilever Plc
, [2018] EWCA Civ. 1532.
[12]
In two of these actions (
Lungowe
and
Okpabi
), the operations
    of a subsidiary of an English parent company in a foreign jurisdiction caused
    significant environmental and health-related damage to local employees of the
    subsidiary and other local residents. In the third (
AAA
), the issue
    was whether the parent and subsidiary companies owed a duty of care to the
    workers and their families to protect them from foreseeable tribal violence
    following a local election.

[155]

Lungowe
is the only reported case to date involving a subsidiary operating in a foreign
    jurisdiction in which the court found there was a good arguable case for imposing
    a duty of care on the parent company: see
Lungowe
, at para. 88. The
    factual background was that Vedanta Resources Plc (Vedanta) was an English
    holding company for a group of metal and mining companies, including a Zambian
    company, Konkola Copper Mines Plc (KCM), which owned and operated copper
    mines in Zambia. The claim arose out of the pollution of waterways in Zambia
    caused by KCMs copper mining operations. The claimants were Zambian citizens
    who relied on the clean water in the waterways for drinking, washing, cooking,
    recreational purposes, irrigation, livestock and fresh fish, and therefore, for
    their physical, economic and social well-being. They brought proceedings against
    Vedanta and KCM.

[156]

The claimants
    action was brought in the English courts against both the Zambian subsidiary
    company and its English parent company. For the claimants to establish
    jurisdiction in the English courts over their claims against the Zambian
    subsidiary, they needed an English anchor defendant, hence the claim against
    the parent. That claim could not stand unless
there
    was a real issue between the claimants and the parent. This requirement has
    been variously described as requiring consideration of whether there is a good
    arguable or properly arguable case or whether the claim is bound to fail
    or has no real prospect of success: see
Lungowe
,

at para. 63;
Okpabi
, at paras. 33, 132, 141, 199, 207;
AAA
, at para. 1.

[157]

The claim
    against Vedanta as the parent company alleged that it owed the plaintiffs a
    duty of care because it had assumed responsibility to ensure that KCMs mining
    operations did not cause harm to the surrounding environment and to the
    inhabitants.

[158]

The Court of
    Appeal referred to the three-part test in
Caparo
for recognizing a
    duty of care: proximity, foreseeability and reasonableness. After reviewing
Chandler
and other relevant case law, Simon L.J. outlined, at para. 83, several
    principles which may be material to the issue of whether a parent company owes
    a duty of care to third parties affected by the operations of its subsidiary,
    including the following:

(1) The starting point is the three-part test of
    foreseeability, proximity and reasonableness. (2) A duty may be owed by a
    parent company to the employee of a subsidiary, or a party directly affected by
    the operations of that subsidiary, in certain circumstances. (3) Those
    circumstances may arise where the parent company (a) has taken direct
    responsibility for devising a material health and safety policy the adequacy of
    which is the subject of the claim, or (b) controls the operations which give
    rise to the claim. (4)
Chandler v. Cape Plc
and
Thompson v. The
    Renwick Group Plc
describe some of the circumstances in which the
    three-part test may, or may not, be satisfied so as to impose on a parent
    company responsibility for the health and safety of a subsidiary's employee.
    (5) The first of the four indicia in
Chandler v. Cape Plc
[80],
    requires not simply that the businesses of the parent and the subsidiary are in
    the relevant respect the same, but that the parent is well placed, because of
    its knowledge and expertise to protect the employees of the subsidiary. If both
    parent and subsidiary have similar knowledge and expertise and they jointly
    take decisions about mine safety, which the subsidiary implements, both
    companies may (depending on the circumstances) owe a duty of care to those
    affected by those decisions. (6) Such a duty may be owed in analogous
    situations, not only to employees of the subsidiary but to those affected by
    the operations of the subsidiary


[159]

In
Lungowe
,
    the claimants relied on six factual factors, discussed at para. 84, to ground
    their claim, namely that: 1) Vedanta had published a report stating that
    oversight for its subsidiaries rested with the Vedanta board and indicating
    that it had a governance framework to ensure that surface and ground water do
    not get contaminated by our operations for a mine in Zambia; 2) there was a
    management and shareholders agreement which contractually bound Vedanta to
    provide a myriad of operational services and funding to KCM; 3) Vedanta
    provided environmental and technical information to all of its group of
    subsidiaries; 4) Vedanta provided financial support to KCM, investing
    approximately US$3 billion since it acquired the company; 5) Vedanta had made
    various public statements regarding its commitment to address environmental
    risks and technical shortcomings in KCMs mining infrastructure, including
    designing a comprehensive and well-funded program to address legacy
    environmental issues; and 6) there was evidence from a former KCM employee that
    Vedanta exercised significant direct control over KCM operations, by putting
    its own people in management, cost-cutting and discarding most of KCMs
    operational policies.

[160]

In these
    circumstances, the Court of Appeal concluded that while the claimants may or
    may not ultimately succeed against Vedanta at trial, their claim could
    nevertheless not be dismissed as not properly arguable: at para. 90.

[161]

More recently,
    the Court of Appeal revisited the principles from
Lungowe
in
Okpabi
,
    where, unlike in
Lungowe
, the court held that the claimants failed to
    establish a good arguable case that the parent company owed them a duty of
    care. There, representatives of the Ogale community in Nigeria brought actions
    against the parent company, Royal Dutch Shell Plc (RDS), and its subsidiary
    that operated an oil pipeline in a joint venture with Nigerian entities. They
    sought compensation for serious environmental damage, including unremediated
    pollution of natural water sources caused by leaks from the pipeline.

[162]

Both sides
    accepted that the test to be applied for determining whether a duty of care was
    owed by a parent to those who had been harmed by the operations of its
    subsidiary was correctly stated in
Lungowe
,

at para. 83:
Okpabi
,
    at para. 23. The claim against RDS was based on an alleged duty of care to
    prevent spills and foreseeable damage.

[163]

It was pleaded
    that, as a result of RDSs knowledge and control over its subsidiarys
    operations and their foreseeable effect on the environment, there was a
    relationship of proximity. It was also pleaded that it would be fair, just and
    reasonable to impose a duty of care in light of the fact that both companies
    were involved in exploration, extraction and transporting of crude oil, RDS had
    superior expertise and resources for protection of health and safety and the
    environment, and RDS knew that the subsidiary would rely on its superior
    knowledge and expertise: at para. 36.

[164]

The majority of
    the court in
Okpabi
found that these pleaded facts did not establish
    an arguable case for finding a duty of care owed by RDS. While both judges in
    the majority wrote separate reasons, each focused on proximity as the
    controlling issue to be analyzed.

[165]

Sir Geoffrey Vos
    C. essentially agreed with Simon L.J., who concluded that the claimants had not
    demonstrated a sufficient degree of control over the subsidiarys operations by
    RDS to establish the necessary degree of proximity, but elaborated on his
    position in more detail. First, he found that the fact that RDS had laid down
    detailed policies and practices for all of its subsidiaries to follow could not
    create a duty of care owed to those affected by the operations of all of its
    subsidiaries. In his view, the corporate structure itself tended to militate
    against the parents assumption of responsibility for the acts of the
    subsidiary. He offered an example of a circumstance that could establish the
    necessary proximity: where a parent required its subsidiaries or franchisees
    to manufacture or fabricate a product in a particular way, and actively
    enforced that requirement, which turned out to be harmful to health: at para.
    196.

[166]

Second, he
    distinguished the circumstances from those in
Lungowe
. As discussed
    above, in
Lungowe
, the board of the parent company oversaw all of its subsidiaries
    through a governance framework to ensure that surface and ground water would
    not become contaminated. The company agreed in a management and shareholders
    agreement to provide its subsidiary with a plethora of specific services to
    carry out its operations, including employee training, metallurgical management
    systems, and administrative and financial support services, to name a few. The
    parent invested $3 billion in the subsidiary, and made a public commitment to
    address environmental risks and technical shortcomings in the subsidiarys
    mining infrastructure, including designing a comprehensive and well-funded
    program specifically to address legacy environmental issues:
Okpabi
,
    at para. 197. However, in
Okpabi
, none of these factors was present to
    the same degree or in some cases at all. Moreover, Sir Geoffrey Vos C. also
    found as an important factor that Vedanta, unlike RDS, had discarded the
    subsidiarys operational policies and inserted its own policies and management:
    at para. 197.

[167]

Third, Sir
    Geoffrey Vos C. reasoned that while RDS provided high-level guidance to the
    subsidiary, based on its expertise and experience, that level of guidance spoke
    against the exercise of control or the assumption of responsibility: at para.
    198. The necessary degree of control would have required RDS to have enforced
    its policies and standards, rather than leave compliance up to the subsidiary.
    Similarly, the fact that spending decisions by the subsidiary required the
    approval of RDS did not amount to the type of financial control that would
    indicate assumption of responsibility: at para. 205.

[168]

While Sales L.J.
    dissented in
Okpabi
, I believe it is fair to say that his opinion was
    based on his view of the available evidence and the weight to be given to it
    for the purpose of determining whether the claimants had a good arguable case,
    rather than on the test for establishing a duty of care itself. He viewed the
    evidence of a number of witnesses as available to indicate evidence of control
    that the other two judges rejected.

[169]

The third and
    final case in the recent jurisprudence from the English Court of Appeal on the
    duty of care of English parent companies for harm caused by their subsidiaries
    operating in foreign jurisdictions is
AAA
. In that case, the claimants
    were employees, former employees and other residents of a tea plantation in
    Kenya operated by Unilever Tea Kenya Limited (UTKL), a Kenyan subsidiary of
    Unilever Plc (Unilever), an English company. The claimants alleged that they
    suffered tribally-motivated violence by marauding mobs following the 2007
    presidential election in Kenya. They claimed that UTKL and Unilever owed them a
    duty of care to take effective steps to protect them from that political
    violence, which was foreseeable. As in the other foreign subsidiary cases, the
    issue was whether, for jurisdictional reasons, there was a good arguable case
    against the parent for breach of a duty of care.

[170]

Addressing the
    test to be applied, the court stressed that there is no special doctrine that
    applies in a parent/subsidiary situation and that the
Chandler
case
    did not establish a separate test beyond the general principles regarding the
    imposition of a duty of care:
AAA
, at para. 36. The court then
    explained, at para. 36, that there are two different types of cases in which a
    duty could be found in the parent/subsidiary context:

Although the legal
    principles are the same, it may be that on the facts of a particular case a
    parent company, having greater scope to intervene in the affairs of its
    subsidiary than another third party might have, has taken action of a kind
    which is capable of meeting the relevant test for imposition of a duty of care
    in respect of the parent. The cases where this might be capable of being
    alleged will usually fall into two basic types: (i) where the parent has in
    substance taken over the management of the relevant activity of the subsidiary
    in place of (or jointly with: see
Vedanta Resources
, at [83]) the
    subsidiarys own management; or (ii) where the parent has given relevant advice
    to the subsidiary about how it should manage a particular risk. As to claims of
    the first type, see
Chandler v Cape Plc
;
Vedanta Resources
at
    [83]; and
Okpabi
at [86]-[89] and [127] (Simon LJ) and [141] (Sales
    LJ).

[171]

In
AAA
,
    the claimants conceded that their case did not fall within the first category,
    as UKTL managed its own operations. Instead, they claimed that Unilever gave
    UKTL advice regarding the management of the risk of political violence,
    sufficient to ground a duty of care under the second category. The court
    rejected the claim. It found that the witness and documentary evidence showed
    that UKTL did not receive any relevant advice from Unilever, and that the
    subsidiary understood that it was responsible for devising its own risk
    management policy and for handling the severe crisis, and that it did so: at
    para. 40. The fact that Unilever had a crisis management policy which required
    that local policies be in place did not impose a duty of care on Unilever.

[172]

I am aware that the three recent foreign subsidiary cases were
    not discussed by the English law experts in their reports, given that the cases
    were released after the reports were authored, although the
Lungowe
and
Okpabi

cases were included in the parties factums on
    appeal without objection. I am also cognizant that foreign law
must
be proved to the satisfaction of the court when the court
    is to apply that foreign law, usually by experts in the particular foreign law
    in question:
Allen v. Hay
(1922), 64 S.C.R. 76, at pp. 80-81;
Northern Trusts
    Co. v. McLean
, [1926] 3 D.L.R. 93
    (Ont. C.A.), at p. 93.

[173]

In this case, however, the experts agreed
    that a Bangladeshi court, deciding whether to recognize a novel duty of care in
    this case, would turn to English law as persuasive authority.
These
    cases demonstrate that the issue before this court is a developing one in the
    English courts. Because a Bangladeshi court would look at these cases as they
    develop, this court ought to examine them for the same purpose. Indeed,
    Canadian courts routinely consider English jurisprudence when applying domestic
    law in the absence of expert evidence on the English jurisprudence: e.g.
Clements
    v. Clements
, 2012 SCC 32, [2012] 2 S.C.R. 181, at paras. 29-32;
Grant
    v. Torstar Corp.
, 2009 SCC 61, [2009] 3 S.C.R. 640, at paras. 69-76. There
    is no suggestion in the expert evidence in this case that Bangladeshi courts
    would operate any differently.

[174]

In any event,
    these cases have not changed the principles set out in
Chandler
and
Caparo
:
    they have followed and applied them.
Chandler
and
Caparo
were
    discussed by the experts and serve as relevant factual examples of the
    application of those principles.

Application of the Principles

[175]

In the present
    case, the appellants assert that Loblaws assumed responsibility for the safety
    of the workers in Rana Plaza and anyone else attending there based on its
    relationship with New Wave. The argument for Loblaws assumption of
    responsibility is grounded in four essential factors: the incorporation of
    Loblaws CSR Standards into its contracts with Pearl Global; the engagement of
    Bureau Veritas to conduct social audits to gauge compliance with those
    standards and the receipt of Bureau Veritas reports; reliance by workers who
    saw Bureau Veritas personnel conducting audits; and Loblaws ability to
    exercise a degree of control over New Wave by cancelling any product orders for
    non-compliance with its CSR Standards. The appellants submit that Loblaws could
    have required New Wave to fix the structural problems in the factory, sent the
    workers home or ensured that the manufacture of its products took place
    elsewhere. They also submit that, given the history of poor factory conditions
    for workers in Bangladesh, including an apparent lack of enforcement of codes
    and standards, it was foreseeable that if Loblaws did not enforce its
    standards, workers would be forced to work in unsafe facilities.

[176]

In my view, the
    motion judge made no error in concluding that it is plain and obvious that
    under Bangladeshi law, the negligence claim has no reasonable prospect of
    success. The appellants point to no case in Bangladesh that has imposed a duty
    of care on a retailer to the employees of a sub-supplier and other people who
    happen to be nearby that sub-suppliers factories to ensure their safety.
    Indeed, they point to no case from Bangladesh that involves remotely similar
    circumstances to the case at bar.

[177]

While the
    appellants seek to rely on the English case of
Chandler
,
the
    determinative circumstances in that case are absent from the relationship
    between Loblaws and New Wave. First, they are not in a parent/subsidiary
    relationship. The nature of their proximity is completely different: New Wave
    could contract with any number of purchasers, none of which could have the kind
    of control present in a parent/subsidiary relationship. In any event, there was
    no contractual relationship between Loblaws and New Wave. Loblaws contract was
    with Pearl Global. Second, Loblaws and New Wave are not in the same business.
    Third, while there is a pleading that Loblaws knew Rana Plaza had numerous
    structural deficiencies, it is not pleaded that Loblaws had superior knowledge
    or expertise about issues of structural safety in the working environment.

[178]

Fourth, although
    there is a pleading that Loblaws did not review and monitor the social audit
    reports to ensure that the audits were conducted in accordance with Loblaws
    CSR Standards and other standards specified by Bureau Veritas, and did not follow
    up on the issues identified in Bureau Veritas audit reports, those audits did not,
    nor were they intended to audit any structural issues in the New Wave
    factories. And while there is also a pleading that the appellants relied on
    Loblaws and Bureau Veritas to ensure that audits would be sufficiently rigorous
    to address all safety concerns that could lead to death or injury, including
    structural issues, it remains clear that the limited social audits did not and were
    not intended to cover any structural issues in the New Wave factories. There is
    therefore no basis for any reliance on Loblaws or Bureau Veritas with respect
    to the structure of the Rana Plaza premises.

[179]

Simply put, the
    pleaded facts in this case do not amount to the type of relationship or control
    over New Waves operations by Loblaws that has been found in English law to be
    sufficient to establish proximity or assumption of responsibility, and to
    thereby impose a duty of care to protect against harm by third parties.

[180]

Loblaws was not directly
    involved in the management of New Wave or in the process of manufacturing the
    products. Loblaws did not have control over where the manufacturing operation took
    place. Loblaws only means of controlling New Wave was through cancellation of
    its product orders from Pearl Global for non‑compliance with the CSR Standards.
    Nor is there any pleaded history of Loblaws using that lever to enforce any
    change in New Waves operations.

[181]

Even if the
    relationship factors could be viewed as sufficient to give Loblaws some control
    over New Waves operations, and to establish some degree of proximity, there is
    no pleaded basis to extend that control to structural issues with Rana Plaza,
    or to find that Loblaws assumed responsibility for any structural issues. The
    CSR Standards do not refer to the structural integrity of factory premises. The
    audits identified workplace safety issues relating to eye wash stands, the use
    of protective eyewear and rubber mats, the location and functioning of smoke
    detectors, the sufficiency of first aid facilities, and emergency exit lighting,
    locations, and signage. The scope of the audits for which Bureau Veritas was
    engaged did not extend to any structural examination, nor was any such
    examination conducted.

[182]

In
Caparo
,
    the House of Lords emphasized that it is always necessary to determine the
    scope of any duty owed, by reference to the kind of damage from which A must
    take care to save B harmless: at p. 627. For example, had the appellants
    suffered damage as a result of one of the deficiencies that had been identified
    by Bureau Veritas in its reports, that could well have affected the analysis of
    whether a duty was owed.

[183]

The motion judge
    went on to conduct a policy analysis to determine whether it would be fair,
    just and reasonable to impose a novel duty of care on Loblaws. He recognized
    that there could be policy considerations that favoured imposing legal accountability
    on a Canadian company doing business in Bangladesh, but found that the negative
    policy factors outweighed the positive ones.

[184]

The appellants
    argue that the motion judge erred in his policy analysis by ignoring the unique
    social and economic issues that would influence a Bangladeshi court, as they
    had influenced the Supreme Court of India in
M.C. Mehta v. Union of India
,
    [1987] All Ind. R. 1086 (S.C.). There, the Supreme Court of India found that
    the social costs of conducting hazardous activities should be borne by the
    profit-maker and not by the community. In moving the law in India beyond the
    rule developed by nineteenth-century English courts in
Rylands v. Fletcher
(1868), L.R. 3 H.L. 330, the court relied on the social and economic context in
    India, as distinct from that in England.

[185]

While this class
    action was commenced on the assertion that Loblaws, as a Canadian company
    ordering products manufactured in Bangladesh, should be held responsible in law
    for the losses that occurred when the factory premises in Rana Plaza collapsed,
    the legal basis for that assertion has not been made out on the pleaded facts. In
    my view, it is therefore not appropriate for the court to address the policy
    issue, having concluded that the claim must fail based on the lack of proximity
    and the absence of any assumption of responsibility on Loblaws part to protect
    the class members from harm by third parties: see e.g.
AAA
, at para.
    5.

[186]

Had it been
    otherwise, and had the pleaded facts shown that Loblaws controlled New Wave and
    its operations and that it had effectively assumed responsibility for the
    structural safety of the New Wave factory premises, then the court would be in
    a position to conduct a meaningful policy analysis. It would be able to weigh
    the factors for and against imposing a duty on a Canadian company conducting
    business in Bangladesh in the context of a
legally
compelling factual
    scenario. However, without proximity, or an assumption of responsibility, the
    negative policy concerns such as the potential for indeterminate liability
    would likely dominate the analysis, skewing the policy-balancing process
    against imposing a duty.

[187]

In my view, the
    motion judge was correct to find that it is plain and obvious that if
    Bangladeshi courts used English case law as the basis for their decision, they
    would not find that Loblaws owed a duty of care to the appellants.

[188]

This conclusion,
    however, does not end the matter. The appellants assert that the motion judge
    erred by focusing on English authorities and disregarding Indian authorities,
    which they contend take a more liberal and expansive approach to tort law. As
    discussed earlier, Bangladeshi courts also find decisions from the high courts
    of India and Pakistan to be persuasive authorities. The appellants point to two
    decisions of the Supreme Court of India as particularly relevant:
Jay Laxmi
    Salt Works (P) Ltd. v. State of Gujarat
, [1994] 3 S.C.R. (Ind.) 866, and
M.C.
    Mehta
. Both cases involved the strict liability of companies for damage
    caused by leaks or overflows from one property onto another. In
Jay Laxmi
,
    the issue was the limitation period, while in
M.C. Mehta
, it was the
    limits of the rule in
Rylands v. Fletcher
.

[189]

In both cases,
    the court expressed the view that there should be a liberal approach to the
    development and expansion of tort law: see
Jay Laxmi
, at pp. 875-76;
M.C.
    Mehta
, at p. 843. In
M.C. Mehta
,
for instance, the Supreme
    Court of India emphasized that the strictures around the rule in
Rylands v.
    Fletcher
had developed in England in the nineteenth century under
    different social and technological conditions and that the law in India should
    not necessarily be constricted by reference to the law in England, stating in
    part at p. 843:

We in India cannot hold our hands
    back and I venture to evolve a new principle of liability which English courts
    have not done. We have to develop our own law and if we find that it is
    necessary to construct a new principle of liability to deal with an unusual
    situation which has arisen and which is likely to arise in future on account of
    hazardous or inherently dangerous industries which are concomitant to an
    industrial economy, there is no reason why we should hesitate to evolve such
    principle of liability merely because it has not been so done in England.

[190]

The motion judge
    did not specifically address whether the view expressed by the Supreme Court of
    India that Indian courts would not be constrained from developing new
    principles just because English law had not yet done so affected his conclusion
    that it was plain and obvious that Loblaws did not owe a duty of care to the
    appellants under Bangladeshi law. That may be because the appellants expert,
    Mr. Hossain, did not take the specific position that even if English law did
    not support finding a duty of care, a court in Bangladesh would find one based
    on the statements made in
Jay Laxmi
and
M.C. Mehta
. Instead,
    he expressed the more general view that while a lack of precedent in
    Bangladeshi law would be a hurdle to bringing this claim, the courts of
    Bangladesh would take an expansive view in developing tort law.

[191]

The appellants
    nevertheless argue on appeal that the motion judge erred by failing to consider
    the effect of the Supreme Court of Indias decisions on Bangladeshi law,
    resulting in an overly restrictive approach to the recognition of novel duties
    of care. I would not give effect to this argument for two reasons.

[192]

The first is
    that the motion judges job was to consider the expert evidence on Bangladeshi
    law and use that evidence as the basis for his findings. The second is that it
    would be pure speculation to find that, despite the courts incremental
    approach to the development of the law on duty of care, a Bangladeshi court
    would go far beyond the parameters recently developed by the English courts on
    this current, dynamic jurisprudential issue. Such an approach would not be consistent
    with the common laws incremental development. The Indian jurisprudence speaks
    to evolution, not revolution. In
M.C. Mehta
, for instance, the court
    wrote the law has to be
evolved
in order to meet the challenge of  new
    situations: at p. 843 (emphasis added). The English jurisprudence similarly
    reflects an incremental approach:
Michael
, at para. 102;
Caparo
,
    at p. 618.


[193]

Also, to make such
    a finding, the motion judge would have had to develop a cogent theory and
    analysis that has no current foundation in the case law. The fact that a
    Bangladeshi court is not precluded from taking such an approach in the future
    does not detract from the ability of the motion judge or this court to
    determine that at this point in time, it is plain and obvious that under
    Bangladeshi law, there is no duty of care owed by Loblaws to the appellants.

[194]

As a result, I
    agree with the motion judge that it is plain and obvious that the negligence
    claim against Loblaws would fail under Bangladeshi law.

(ii)

Bureau Veritas

[195]

The appellants
    negligence claim against Bureau Veritas is that despite the fact that Bureau
    Veritas was not contracted to conduct structural audits of the New Wave
    factories, it had a duty of care to ensure the safety of the appellants. It
    breached that duty by failing to conduct reasonable audits and inspections and
    to report any safety issues to Loblaws to ensure they were remedied. The motion
    judge found that even if Bureau Veritas owed a duty of care to any of the
    appellants, the duty was limited to their obligations to inspect and report
    under their contract with Loblaws and could not extend to structural issues outside
    the scope of its retainer.

[196]

In my view, the
    motion judge correctly held that it was plain and obvious that the appellants
    pleaded claim in negligence against Bureau Veritas would fail under Bangladeshi
    law. The appellants cite no Bangladeshi precedent that supports imposing on
    Bureau Veritas the duty of care pleaded in the Fourth Amended Statement of
    Claim. Indeed, the appellants point to no precedent from any country in which a
    court has imposed a duty of care on a service provider to a third party to
    perform an activity outside the scope of its limited retainer.

[197]

The motion judge
    considered the English Court of Appeals decision in
Clay v. A.J. Crump
    & Sons Ltd.
, [1964] 1 Q.B. 533 (C.A.), relied on by the appellants,
    where an architect was found liable to a third party who was injured by his
    negligence in leaving an unstable wall in place on site. While that case
    imposed a duty of care on the architect to a third party, the duty was limited
    to negligence in the performance of his contractual functions. Here, Bureau
    Veritas limited retainer did not extend to conducting a structural audit of
    Rana Plaza.

[198]

The motion judge
    also found, in accord with Dr. Morgans acknowledgement, that because Bureau Veritas
    retainer had been terminated by Loblaws long before the cracks that caused the
    collapse were discovered on April 23, 2013, it could not have owed any duty in
    respect of the collapse.

[199]

The appellants
    nonetheless argue that a Bangladeshi court would take an expansive approach to
    its negligence claim against Bureau Veritas, relying on the Indian authorities
    discussed above. For the reasons discussed above, I do not accept this
    submission.

[200]

In my view, the
    motion judge was correct in his conclusion that it is plain and obvious that,
    under Bangladeshi law, there could be no duty of care owed by Bureau Veritas to
    the appellants to inspect for and remedy structural defects. In particular, no
    such duty could be owed in respect of the defects that caused the collapse of
    Rana Plaza.

(b)

Is the claim in vicarious liability against Loblaws bound to fail under
    Bangladeshi law?

[201]

The appellants
    bring a further claim against Loblaws arguing it is vicariously liable for the
    negligence of New Wave and Pearl Global. The appellants allege that, by
    subcontracting its garment work to New Wave and Pearl Global, Loblaws benefited
    financially and created a risk that resulted in injury and death. They contend
    that garment manufacturing in Bangladesh is an inherently dangerous activity and
    that Loblaws was under an obligation to protect the safety of the class
    members.

[202]

The appellants
    submit that the motion judge erred in law in finding that it was plain and
    obvious under Bangladeshi law that Loblaws could not be found vicariously
    liable for New Wave and Pearl Globals failure to provide a structurally safe
    environment for employees and for others attending Rana Plaza. They acknowledge
    that there is no case from Bangladesh that has held the purchaser of
    manufactured goods vicariously liable for the failures of the contracting
    manufacturer, but nonetheless argue that it is not plain and obvious the claim
    would fail.

[203]

The leading case
    in Bangladesh on the issue of vicarious liability is
Bangladesh Beverage
,
    discussed above. In that case, a truck driver employed by Bangladesh Beverage
    and driving the truck in the course of his employment negligently killed a
    pedestrian by driving in the wrong direction and striking the man while he
    crossed the road. His employer, Bangladesh Beverage, was found vicariously
    liable for his negligent conduct.

[204]

In its reasons,
    the High Court Division stated, at para. 36:

In order that the doctrine of vicarious liability may apply,
    there are two conditions which must co-exist

(a) The relationship of master and servant must exist between
    the defendant and the person committing the wrong complained of;

(b) The servant must in committing
    the wrong have been acting in the course of his employment.

[205]

On appeal,
    Bangladesh Beverage argued in part that the High Court Division erred by
    failing to determine whether the driver was acting within the course of his
    employment before holding the company vicariously liable. The Appellate
    Division rejected the argument, holding that the High Court Division rightly
    found that [Bangladesh Beverage] was vicariously liable for the fault of the
    driver:
Bangladesh Beverage
(S.C. Bangladesh App. Div.), at para. 17.

[206]

Although there
    is no pleading that Loblaws was in an employment relationship with New Wave and
    Pearl Global, the appellants nonetheless argue that the motion judge erred in
    concluding that it was plain and obvious that the vicarious liability claim
    would fail under Bangladeshi law. The appellants make essentially two
    arguments. First, the motion judge erred by rejecting Mr. Hossains opinion
    that a Bangladeshi court would approach a novel claim from first principles and
    engage in a contextual analysis of the law. In so doing, a Bangladeshi court would
    follow the approach taken by the Supreme Court of India in
M.C. Mehta
to expand the law in Bangladesh beyond existing precedents. Second, even if a
    Bangladeshi court did not follow
M.C. Mehta
and instead relied more
    heavily on English jurisprudence, it is not plain and obvious that the claim
    would fail under English law. I would reject both these arguments.

[207]

In
M.C.
    Mehta
, referenced above, the respondent corporation was a fertilizer
    company that produced products hazardous to the surrounding community. As a
    result of an escape of oleum gas, many people suffered harm. As noted above,
    one of the issues before the court was whether the English rule from
Rylands
    v. Fletcher
applied or whether there were other principles on which to
    determine liability. The court found that it should not be bound by the
    parameters of a rule that evolved in the nineteenth century in England, and
    that the law had to evolve to take account of twentieth century conditions in
    India, which included industries whose operations were inherently dangerous to
    their workers and to the surrounding communities. The court found such
    industries owed a non-delegable duty to those workers and to the community to
    protect them. The court concluded that it would not be bound by the rule in
Rylands
    v. Fletcher
,
but would
    adopt a broad principle of absolute liability for operators of dangerous
    enterprises, at p. 843:

We are of the view that an
    enterprise which is engaged in a hazardous or inherently dangerous industry
    which poses a potential threat to the health and safety of the persons working
    in the factory and residing in the surrounding areas owes an absolute and
    nondelegable duty to the community to ensure that no harm results to anyone on
    account of hazardous or inherently dangerous nature of the activity which it
    has undertaken.

[208]

The appellants
    also point to three other cases from Indian courts, referred to by Ms. Kabir,
    the respondents expert, which have recognized vicarious liability for the n
egligence of an independent contractor: see
Vadodara
    Municipal Corporation v. Purshottam V. Murjani
(2014), 16 S.C. Cases (Ind.) 14;
P. Ravichandran v. Government of Tamil Nadu
(2011), 6 Current Tamil Nadu Cases 636
    (H.C. Mad.);
V. Ganesh v. Dr. K.S.
    Shanmuga Sundaram
(2010),
    1 L. Weekly 209 (H.C. Mad.)
.
Two
    of those cases involved public bodies that had hired an agent to carry out a
    function on their behalf: see
Vadodara
    Municipal Corporation
;
P.
    Ravichandran
. In the third, the court confirmed that hospital
    authorities
are usually held responsible for the
    negligence not only of their employees, but also their agents:
V. Ganesh
,
    at paras. 44-45.


[209]

In my view,
    applying the legal principles from the Indian case law does not lead to a route
    to finding that, on the pleaded facts, Loblaws could be held to be vicariously
    liable for the actions of New Wave and Pearl Global under Bangladeshi law. Garment
    manufacturing is not an inherently dangerous or hazardous activity. New Wave
    and Pearl Global are not on the staff of Loblaws, as either employees or
    independent contractors. Nor is it pleaded that New Wave was acting as agent
    for, or on behalf of Loblaws in conducting its operations. Even if a
    Bangladeshi court looked to the Indian jurisprudence to expand the established
    test for vicarious liability set out by the High Court Division in
Bangladesh
    Beverage
, it is plain and obvious the claim against Loblaws would fail.

[210]

The appellants
    also argue, however, that the English jurisprudence supports imposing vicarious
    liability on Loblaws in this case. The English experts referred to the doctrine
    of non-delegable duty, as articulated and applied by the Supreme Court of the
    United Kingdom in
Woodland v. Swimming Teachers Association
, [2013] UKSC
    66, [2014] A.C. 537. In that case, a child sustained severe brain injuries
    during a swimming lesson with her class. The lesson was supervised by a
    swimming teacher and lifeguard who were employed by independent contractors.
    The Supreme Court of the United Kingdom found that the claim that the education
    authority owed the plaintiff a non-delegable duty to ensure that reasonable
    care was taken of the claimant during the school day was not bound to fail.

[211]

Lord Sumption
    identified two broad categories of cases in which a non-delegable duty may
    arise, one when a defendant employs an independent contractor to perform some
    function which is inherently dangerous, and the other when the defendant and
    plaintiff are in a relationship with certain characteristics:
Woodland,
at paras. 5-7. He explained, at paras. 5-6, that non-delegable duty has
    become a shorthand to describe those cases that depart from the general
    principle that a defendant cannot be held liable for the negligent acts and
    omissions of others:

The law of negligence is generally fault-based. Generally
    speaking, a defendant is personally liable only for doing negligently that
    which he does at all, or for omissions which are in reality a negligent way of
    doing that which he does at all. The law does not in the ordinary course impose
    personal (as opposed to vicarious) liability for what others do or fail to do.
    The expression non-delegable duty has become the conventional way of
    describing those cases in which the ordinary principle is displaced and the
    duty extends beyond being careful, to procuring the careful performance of work
    delegated to others.

English law has long recognised
    that non-delegable duties exist, but it does not have a single theory to
    explain when or why. There are, however, two broad categories of case in which
    such a duty has been held to arise.

[212]

He then
    described, at paras. 6-7, the two categories of non-delegable duties that have
    emerged in the English jurisprudence:

The first is a large, varied and anomalous class of cases in
    which the defendant employs an independent contractor to perform some function
    which is either inherently hazardous or liable to become so in the course of
    his work.

[]

The second category  comprises
    cases where the common law imposes a duty on the defendant which has three
    critical characteristics. First, it arises not from the negligent character of
    the act itself but because of an antecedent relationship between the defendant
    and the claimant. Second, the duty is a positive or affirmative duty to protect
    a particular class of persons against a particular class of risks, and not
    simply a duty to refrain from acting in a way that foreseeably causes injury.
    Third, the duty is by virtue of that relationship personal to the defendant.
    The work required to perform such a duty may well be delegable, and usually is.
    But the duty itself remains the defendants.

[213]

After reviewing
    relevant case law, Lord Sumption summarized, at para. 23, the factors that have
    led to the recognition of a non-delegable duty of care:

If the highway and hazard cases
    are put to one side, the remaining cases are characterised by the following
    defining features: (1) The claimant is a patient or a child, or for some other
    reason is especially vulnerable or dependent on the protection of the defendant
    against the risk of injury. Other examples are likely to be prisoners and
    residents in care homes. (2) There is an antecedent relationship between the
    claimant and the defendant, independent of the negligent act or omission
    itself, (i) which places the claimant in the actual custody, charge or care of
    the defendant, and (ii) from which it is possible to impute to the defendant
    the assumption of a positive duty to protect the claimant from harm, and not
    just a duty to refrain from conduct which will foreseeably damage the claimant.
    It is characteristic of such relationships that they involve an element of
    control over the claimant, which varies in intensity from one situation to another,
    but is clearly very substantial in the case of schoolchildren. (3) The claimant
    has no control over how the defendant chooses to perform those obligations, i e
    whether personally or through employees or through third parties. (4) The
    defendant has delegated to a third party some function which is an integral
    part of the positive duty which he has assumed towards the claimant; and the
    third party is exercising, for the purpose of the function thus delegated to
    him, the defendants custody or care of the claimant and the element of control
    that goes with it. (5) The third party has been negligent not in some
    collateral respect but in the performance of the very function assumed by the
    defendant and delegated by the defendant to him.

[214]

The appellants
    expert on English law, Dr. Morgan, conceded that imposing a non-delegable duty
    on Loblaws would require a liberal reading of
Woodland
. He
    acknowledged that the appellants were never in the actual care, control or
    custody of Loblaws, but reasoned that a stringent insistence on the requirement
    may be lessened if Loblaws assumed responsibility for their safety. He further
    opined that the appellants could argue that a non-delegable duty arose due to
    the ultra‑hazardous nature of garment manufacturing in Bangladesh, but admitted
    such an argument would be unlikely to succeed.

[215]

The motion judge
    rejected this analysis and held that this was not one of the rare cases,
    referred to by Lord Sumption, in which it would be appropriate to impose
    vicarious liability for the wrongdoing of an independent contractor based on a non-delegable
    duty. The motion judge found, at para. 469, that it was plain and obvious that
    the appellants did not have a cause of action based on vicarious liability for
    the following nine reasons:

a. Pearl Global
, and even
    more so New Wave, were not agents or employees of Loblaws.

b. Pearl Global and New Wave were not even
    independent contractors of the sort that can trigger vicarious liability; i.e.,
    they were not providing a service or task that could have been performed
    internally by Loblaws employees; New Wave was selling goods not services or
    tasks that were part of Loblaws enterprise.

c.

There is no rationale for treating the employers of the 438 employees
    of Phantom Apparels Ltd.; the 254 employees of Phantom Tac Ltd., the 450
    employees of Ether Textile Ltd., and the employers of the 439 persons who
    unfortunately just happened to be in or around the building at the time of the
    collapse as employees, agents, or independent contractors of Loblaws.

d.

Loblaws had no duty of care much less a non-delegable one for all the
    reasons expressed [in the reasons] in discussing the law of England and  the
    law of Ontario.

e. Loblaws did not create the dangerous activity
    of garment manufacturing in Bangladesh, and garment manufacturing is not a
    dangerous activity of the type meant to be captured by the rare exception to
    the rule that vicarious liability is not imposed on defendants for the conduct
    of their independent contractors, which none of the employers of the putative
    Class Members were in any event.

f.

The Plaintiffs have reasoned backwards from a dangerous industry,
    injured employees, employers breaching a duty of care to keep their employees
    safe, a contractual relationship between the negligent employers and Loblaws,
    to a conclusion that Loblaws had a non-delegable duty of care. But Loblaws
    never had a duty of care to the employees and so this backwards reasoning does
    not work. Loblaws did not delegate its responsibility for the safety of the
    employees of New Wave because it had no such responsibility.

g.

The exceptional circumstances in which an enterprise can be vicariously
    liable for the misdeeds of independent contractors are not extant in the case
    at bar. Loblaws is not an enterprise engaged in a hazardous or inherently
    dangerous industry; Loblaws is a retailer that sells food, drugs, and consumer
    goods. It is a retailer not a manufacturer of garments. Loblaws had no control
    over how Pearl Global and New Wave carried on their manufacturing business or
    treated their employees.

h.

There are no cases that support the Plaintiffs theory of vicarious
    liability in England, in Canada, or in Bangladesh where
Bangladesh
    Beverage Industries Ltd. v. Rowshan Akhter


is no
    more than a classic example of an employer being vicariously liable for its
    employee, who during the normal course of business while driving a delivery
    van, struck and killed a pedestrian.

i.
Bangladesh
    Beverage
has nothing to say about exceptional cases or about
    vicarious liability of independent contractors.

[216]

In my view, the
    motion judge correctly concluded that it is plain and obvious that a claim
    based on vicarious liability against Loblaws cannot succeed under the law of
    Bangladesh.

E.

Conclusion

[217]

For these reasons, I would dismiss the substantive appeal.

[218]

At the conclusion of the hearing, it
    was agreed that costs of the appeal would be dealt with following release of
    the reasons for decision. If the parties are unable to agree on the costs of
    the appeal, Loblaws and Bureau Veritas shall each submit a costs brief together
    with brief (maximum three pages) written submissions within 14 days of release
    of these reasons. The appellants and the Law Foundation of Ontario may make
    brief (maximum three pages) written response submissions within 14 days
    thereafter.

K.
    Feldman J.A.

Doherty J.A.:

A.

Overview

[219]

I concur
    entirely with my colleague Feldman J.A.s reasons and disposition on the appeal.
    As Feldman J.A. indicated, however, there is a further issue on this appeal
    involving the motion judges costs order. These reasons address that issue.

[220]

The motion judge
    made a single costs order in respect of the four motions that he heard over
    nine days. While the appellants won a few battles in the course of the hearing
    (e.g. the jurisdictional issue), the respondents decisively won the war. The
    action was dismissed against both respondents in its entirety.

[221]

The motion judge
    concluded that the respondents were entitled to their costs on a partial
    indemnity basis. He described the issues raised on the motions as extremely
    complex and the evidentiary record as enormous. The motion judge fixed the
    Loblaws respondents costs in the amount of $1,350,000, and the Bureau Veritas
    respondents costs in the amount of $985,601.60.

[222]

Under the order,
    the costs are payable by the appellants. However, as the appellants had
    successfully applied for, and received, funding from the Class Proceedings Fund
    (the Fund), the Fund is liable upon application by Loblaws and Bureau Veritas
    to pay the costs award made against the appellants:
Law Society Act
,
    R.S.O. 1990, c. L.8, s. 59.4.

[223]

The Law
    Foundation of Ontario (the LFO) administers the Fund and had standing at the
    costs hearing before the motion judge. The LFO seeks leave to appeal the costs
    order made by the motion judge.

[224]

This court
    seldom grants leave to appeal from costs orders. However, for the reasons set
    out below, this is an appropriate case in which to grant leave, allow the
    appeal, and reduce the costs payable to the respondents by the Fund.

[225]

The motion judge
    failed to appreciate the public interest component in the claim advanced by the
    appellants. He also took irrelevant factors into account in discounting the
    impact of the public interest considerations on his costs assessment. While the
    respondents success in the action entitled them to costs, there should have
    been a significant reduction in those costs to reflect the public interest
    component of the claim. I would reduce the costs awarded by 30%.

B.

The Costs Hearing Before the Motion Judge

[226]

The LFO argued
    that even though the claims had been dismissed, there should be no order as to
    costs or, alternatively, that any costs awarded to the respondents should be
    reduced significantly from the amounts claimed. In advancing this position, the
    LFO relied on: 1) what it characterized as the mixed results of the various
    motions; 2) the strong public interest in the litigation of the claims
    advanced; and 3) the legal novelty of those claims. The LFO did not argue that
    the amounts claimed by the respondents inaccurately reflected the amounts
    expended on the defence. The LFO also did not argue that the amounts claimed
    were beyond what the losing party could reasonably expect to pay: see
Boucher
    v. Public Accountants Council for the Province of Ontario
(2004), 71 O.R.
    (3d) 291 (C.A.), at para. 24.

[227]

The motion judge
    rejected the arguments advanced by the LFO. With respect to the argument that
    success on the motions was mixed, the motion judge acknowledged that the
    appellants had been successful on the jurisdictional motion, and had satisfied
    all of the certification requirements in s. 5 of the
Class Proceedings Act,
    1992
, S.O. 1992, c. 6

(the 
CPA
),
save the requirement that the
    pleadings disclose a cause of action. He observed, however, that all of the
    motions were essentially argued as one motion, and that the respondents were
    successful in achieving the dismissal of the claims. He said, at para. 121:

The defendants successfully resisted certification and under
    the loser-pays regime of the
Class Proceedings Act, 1992
, they are
    entitled to the spoils of victory.

[228]

On the second
    and third arguments advanced by the LFO, the motion judge referred to s. 31(1)
    of the
CPA
. That provision directs a judge, in exercising their
    discretion as to costs, to consider whether the proceeding was a test case,
    raised a novel point of law, or involved a matter of public interest. There
    was no suggestion that this was a test case. The LFO did, however, rely on the
    other two factors identified in s. 31(1).

[229]

The motion judge
    recognized that the factors identified in s. 31(1) had to be considered along
    with the other factors relevant to costs, which are identified in r. 57.01 of
    the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194. He indicated that
    the s. 31(1) factors were not determinative of the appropriate costs order. In
    some cases, those factors would have a very significant impact on the order to
    be made. In other cases, the impact would be minimal.

[230]

The motion judge
    held that even if the claims could be said to involve a matter of public
    interest or advance a novel point of law, those factors, considered in the
    context of the other circumstances of the case, would not cause him to depart
    from the normal rule that successful defendants should have their costs on a
    partial indemnity basis. The motion judge went on to hold that, in any event,
    the claims had no public interest or novelty component as those terms are used
    in s. 31(1).

[231]

In rejecting the
    appellants submission that the public interest and novelty aspects of their
    claims should at least mitigate the costs award, the motion judge stressed the
    monetary motive behind the claims, and the manner in which the appellants had
    pleaded and prosecuted their claims. He said, at paras. 123-25:

[A] significant motivator in this proposed class action was
    money, independent of public policy, and the plaintiffs were intent on
    intensifying the pressure and risks on the defendants and to motivate them to
    settle and to pay a substantial award. This proposed class action was not
    purely altruistic and the plaintiffs lawyers must be taken to have weighed the
    awards along with the risks when they decided to take on a case that they
    litigated with little or no mercy, temperance or proportionality.

The plaintiffs pleaded and prosecuted their case in a way that
    indicated that they expected to be paid costs. They telegraphed that they would
    rebuff any argument that there should be no order as to costs because the case
    was novel or in the public interest. The plaintiffs pleaded and prosecuted
    their case in a way that they should and would have reasonably expected: (a) to
    pay costs; and (b) that they would not be able to use the argument that the
    case was novel or in the public interest.

Negligence and vicarious liability
    are non-intentional torts, but the plaintiffs went out of their way to vilify
    the defendants, and the subtext of the plaintiffs pleaded negligence claims
    and their breach of fiduciary duty claim was that the defendants purposely,
    knowingly, or recklessly for greed and personal profit, exploited the class
    members The plaintiffs presented the case as if the defendants intentionally
    or recklessly injured the denizens of Rana Plaza; litigating in this fashion,
    the plaintiffs should and would have reasonably expected to pay the costs and
    not be able to use the argument that the case was novel or in the public
    interest.

C.

Issues on Appeal

[232]

The LFO raises
    two issues on appeal:
[13]

1.

Did
the motion judge err in
    principle in awarding costs to the respondents for the jurisdiction motion on
    which they were unsuccessful?

2.

Did the motion judge err in principle in failing to give
    effect to s. 31(1) of the
CPA
, despite the public interest in, and/
or novelty of, the appellants claims?

D.

Analysis

(1)

Did the motion judge err in awarding costs to the respondents on the
    jurisdiction motion?

[233]

The motion judge
    chose to treat the motions as a single motion for the purpose of his costs
    assessment. Much of the evidence was common to more than one of the motions,
    and the motion judge observed that the various issues on the motions were
    inextricably integrated.

[234]

The motion judge
    was intimately familiar with the proceedings and the record. He was in the best
    position to assess the nature and degree of the interrelationships among the
    motions. I see no error in principle in his determination that the motions
    should be treated as a single entity for the purpose of costs. I would defer to
    the motion judge on that issue.

(2)

Did the motion judge err in principle in failing to give effect to s.
    31(1) of the
Class Proceedings Act, 1992
?

[235]

Section 31(1)
    reads:

In
    exercising its discretion with respect to costs under subsection 131(1) of the
Courts
    of Justice Act
, the court may consider whether the class proceeding was a
    test case, raised a novel point of law, or involved a matter of public
    interest.

[236]

Section 31(1)
    identifies three factors that a judge may take into account in fixing costs in
    a class proceeding. Those factors should be given significance in the costs
    assessment process: see
Pearson v. Inco Ltd.

(2006), 267 D.L.R.
    (4th) 111 (Ont. C.A.), at para. 11;

Ruffolo v. Sun Life Assurance Co. of
    Canada
, 2009 ONCA 274, 95 O.R. (3d) 709, at paras. 27-29, 31, leave to
    appeal refused, [2009] S.C.C.A. No. 226.

[237]

In the context
    of a claim by a successful defendant for costs, the factors identified in s.
    31(1) may mitigate the costs that the losing plaintiff might otherwise be
    required to pay. In some cases, the s. 31(1) factors may result in a no costs
    order: see e.g.
Joanisse v. Barker
(2003), 46 C.P.C. (5th) 348 (Ont. S.C.)
.

[238]

The factors
    identified in s. 31(1) do not, however, negate consideration of other factors
    which promote the interests served by awarding costs to successful defendants.
    These interests include discouraging inappropriate, meritless and expensive
    class litigation: see
Re*Collections Inc. v. Toronto Dominion Bank
,
    2011 ONSC 3477, 20 C.P.C. (7th) 195, at para. 14 (citing
Fischer v. IG
    Investment Management Ltd.
, 2010 ONSC 2839, 89 C.P.C. (6th) 263).

[239]

In applying the
    s. 31(1) factors, the court must have regard to the circumstances of the
    particular case and the purposes animating the
CPA
. Those purposes
    are: promoting access to justice, effecting behavioural modification, and
    making effective use of limited judicial resources: see
Ruffolo
, at
    para. 33. When considered alongside the other factors relevant to costs, most
    notably the outcome of the litigation, the s. 31(1) factors will often lead to
    some reduction in the costs awarded to a successful defendant. However,
    defendants who have successfully resisted a class proceeding claim should not
    routinely be required to shoulder the entire burden of their no doubt
    significant legal costs merely because the unsuccessful plaintiffs claim
    raised a novel legal point or involved a matter of public interest.

(a)

Did the claim raise a novel legal point?

[240]

The motion judge
    rejected this submission. In his view, the appellants claims involved the
    application of well-established negligence principles to a specific fact
    situation. The motion judge further held that the claims strained those
    established principles beyond their well-recognized limits. He said, at para.
    133:

The absence of proximity between
    the proposed class members and the defendants was manifest under traditional
    principles, giving the plaintiffs good reason to expect to fail.

[241]

It is not
    surprising that s. 31(1) recognizes the novelty of legal issues as potentially
    relevant to the fixing of costs. Legal novelty can be considered in fixing
    costs in all kinds of civil litigation: see
Baldwin v. Daubney
(2006),
    21 B.L.R. (4th) 232 (Ont. S.C.), at paras. 13-32. Novelty takes on added
    importance in light of the
CPA
s commitment to promote access to
    justice.

[242]

Novelty can have
    different meanings. It can refer to a legal issue that has not previously been
    decided in the specific fact situation presented in a particular case. Novelty
    in that narrow sense cannot be enough to warrant any costs adjustment. Access
    to justice is not furthered by promoting meritless claims in the context of a
    class proceeding simply because they present new factual situations.

[243]

To impact on the
    costs assessment, a novel claim must have some potential merit. It must be a
    viable claim in the sense that it has some reasonable prospect of success. In
Baldwin
,
    Spence J. offered this rationale for treating the novelty of a claim as a
    mitigating factor on costs, at para. 22:

If the unsuccessful party says that he or she should be
    relieved from the costs rule because a novel issue was raised, it is not clear
    why that should be a relevant reason unless that element of novelty goes to the
    reasonable expectations of the party about the litigation.
If the issue is truly open in the sense
considered
    above [i.e. that the law in the decided cases does not provide adequate
    guidance to resolve the issue]
, the
    litigant could reasonably say that he or she had no proper reason to expect to
    fail. But if all the litigant can say is that there was no decided case
    directly on point, that begs the question about reasonable expectations. The
    litigation in that situation is vulnerable to the response: although there was
    no decided case directly on point, the law is clearly against your case, so you
    should reasonably expect to lose.
[Emphasis added.]

[244]

A legal issue
    can be viewed as novel for the purposes of s. 31(1) if it is central to the
    outcome of the litigation, it has not been decided in the factual context in
    which it is presented, and the decided cases and controlling principles do not
    provide a clear indication of how it will be determined in the fact situation
    presented: see
Baldwin
, at para. 19;
Edwards v. Law Society of
    Upper Canada
(1998), 38 C.P.C. (4th)
    136 (Ont. Gen. Div.)
, at para. 12, affd (2000), 48 O.R. (3d) 329
    (C.A.), at para. 50;
Williams v. Mutual Life Assurance Co. of Canada
(2001), 6 C.P.C. (5th) 194 (Ont. S.C.), at paras. 22-23;
McCracken v.
    Canadian National Railway Company
, 2012 ONSC 6838, 31 C.P.C. (7th) 237, at
    para. 80.

[245]

Novelty for the
    purposes of s. 31(1) is not an all or nothing thing, but rather operates along
    a continuum:
Smith v. Inco Ltd.
,
    2013 ONCA 724, 313 O.A.C. 156,
at para. 29. For example, if a legal
    issue is novel in that, on the current state of the law, either party could
    have reasonably expected to be successful on the point, the novelty of the
    claim should play a significant role in fixing costs. However, if the legal
    point is novel in the sense that it has not been decided in the specific
    factual context in which it is raised, but the applicable case law and
    principles pointed strongly towards the outcome eventually arrived at in the
    proceeding, a claim of novelty will have little or no impact on the costs
    awarded against the losing party. In cases where there is an element of novelty
    to the claim, it is for the motion or trial judge to determine where the case
    fits along the novelty continuum.

[246]

The motion judge
    rejected the appellants argument that the novelty of the legal issues should
    impact on the costs order. He accepted that the central legal issues raised by
    the appellants claim had not previously been decided in the factual context in
    which they were presented. However, he further held that it was clearly
    predictable, in light of the established case law and the applicable principles
    underlying that case law, that those issues would be resolved in favour of the
    respondents. As the motion judge said the appellants had good reason to expect
    to fail. That assessment was reasonably open to the motion judge. On that view
    of the appellants claim, the motion judge did not err in concluding that the
    novelty of the issues should not mitigate the otherwise appropriate costs
    consequences.

(b)

Does the claim involve a matter of public interest?

[247]

The motion judge
    held that the claim had no public interest component in the sense that that
    term is used in s. 31(1) of the
CPA
. He further held that, in any
    event, the monetary motive for the action and the manner in which the
    plaintiffs pleaded and prosecuted the case negated any reliance on any public
    interest component that might otherwise justify reducing the costs award.

[248]

The term public
    interest in s. 31(1) can refer to the public interest in facilitating access
    to justice through class proceedings by persons or groups who have historically
    faced significant disadvantages when seeking legal redress for alleged wrongs.
    Public interest can also refer to the subject matter of the claims. Claims that
    raise issues that transcend the immediate interests of the litigants and engage
    broad societal concerns of significant importance are matters of public
    interest:
Kerr v. Danier Leathers Inc.
, 2007 SCC 44,
[2007] 2 S.C.R. 331, at para. 67;
Pearson
,
    at para. 9;
Edwards
, at para. 13;
Ruffolo
, at paras. 38-41,
    affg (2008), 90 O.R. (3d) 59 (S.C.);
McCracken v. Canadian National
    Railway Company
, 2012 ONCA 797, 5 C.C.E.L. (4th) 327, at para. 9;
Williams
,
    at paras. 24-26;
Joanisse
, at para. 14.

[249]

The Class
    Proceedings Committee (the CPC) is statutorily mandated to consider various
    factors when deciding whether to provide financial support to a plaintiff:
Law
    Society Act
, s. 59.3(4). The Class Proceedings Regulations, O. Reg. 771/92
    provide that the committee may consider:

The extent to which the issues in
    the proceeding affect the public interest.

[250]

I see no reason
    why the phrase public interest in the Regulations should not be given the
    same meaning as the phrase public interest in s. 31(1) of the
CPA
.
    If the Fund properly follows its mandate and properly concludes that the
    litigation involves a matter of public interest, the Fund can reasonably
    expect that if the motion judge or trial judge also concludes that the
    litigation involved a matter of public interest, that the public interest
    will mitigate to some extent the costs for which the Fund may be liable. As
    Winkler C.J.O. observed in
McCracken
(ONCA)
,
    at para. 10:

The Fund was created to facilitate access to justice. If the
    Fund was required to absorb steep costs awards imposed on litigants even though
    the proposed action displays the factors in s. 31(1) of the CPA this would have
    an undesirable chilling effect on class proceedings.

[251]

I agree with
    Winkler C.J.O.s observation. I would think that the CPC would inevitably take
    a more restrictive view of the cases it would fund if, in cases that were found
    to involve matters of public interest, the courts routinely give little or no
    weight to that factor when assessing costs payable by the Fund to the
    successful defendant: see
McCracken
(ONSC),
    at paras. 57-58
.

[252]

The motion judge
    did not consider the public interest factor in s. 31(1) from the perspective of
    promoting access to justice. Clearly, the ready-wear garment workers who form
    part of the proposed class come from a segment of the community that is
    historically disadvantaged, primarily for socioeconomic reasons. A class
    proceeding provided the only avenue by which this group could advance their
    claim in a Canadian court. Facilitating access to justice for this group gave
    the class proceeding a public interest component: see
Vennell v. Barnados
(2004), 73 O.R. (3d) 13 (S.C.), at paras. 31-32.

[253]

Loblaws submits
    that, for the purposes of s. 31(1) of the
CPA
, serving the public
    interest by promoting access to justice applies only to claims brought on
    behalf of Ontario residents. It submits that any claim advanced by a
    non-resident cannot engage access to justice considerations, since the LFOs
    mission is to further access to justice for Ontarians.

[254]

I cannot accept
    this argument. Assuming the residence of the class is relevant on an
    application to the CPC for funding, there is nothing in the language of s.
    31(1) of the
CPA
or the policies that animate the
CPA
that
    would justify limiting access to justice concerns to claimants who happen to
    reside in Ontario. If a claim is arguably justiciable in Ontario, there is a
    public interest in facilitating access to the courts in Ontario. This is
    particularly true for disadvantaged groups who have historically faced barriers
    in bringing their grievances before the courts.

[255]

The nature of
    the class advancing the claim in this litigation made access to justice a
    significant concern. It gave this proceeding a public interest component.

[256]

In considering
    the subject matter of the claim and the public interest, the motion judge
    referred to the case law that identifies matters of public interest as matters
    that engage societal concerns of significant importance to the community. The
    motion judge did not, however, apply that definition to the subject matter of
    this claim. Instead, he stated that a significant motivator for the appellants
    in bringing the proceedings was money, independent of public policy. He also
    referred to the manner in which the appellants pleaded and prosecuted the
    claim, which he described as a blistering attack on the morality of the
    defendants conduct. The motion judge held that these factors negated any
    public interest in the subject matter of the claims. In particular, he held
    that by pleading and pursuing their claim in the manner they did, the
    appellants forfeited any argument that the public interest component of the
    claim should mitigate any costs order made in favour of the respondents.

[257]

I will first
    address the nature of the subject matter of the claim. Then, I will turn to the
    relevance of the appellants monetary motive and the manner in which they
    pleaded and pursued their claim.

[258]

The claims arise
    out of the collapse of Rana Plaza in Bangladesh. That collapse killed or
    seriously injured over 3,600 people, many of whom worked in the ready-wear
    garment industry. That industry, as it operates in developing countries like
    Bangladesh, provides cheap clothing and footwear to consumers around the world,
    particularly consumers in affluent countries like Canada.

[259]

In a very real
    sense, the tragedy at Rana Plaza reveals the true cost associated with the
    production of inexpensive goods for consumers in affluent countries. The ready-wear
    garment industry in Bangladesh pays very low wages, and tolerates unsafe and
    unhealthy working conditions. The low wages and abysmal working conditions are
    the product, in part, of the very low prices paid for the products made by
    those workers. Purchasers like Loblaws are able to keep the prices paid for the
    products low under the implied threat of taking their business to a
    manufacturer in another developing country.

[260]

The Rana Plaza
    tragedy, and the Canadian connection to the ready-wear garment industry that
    operated in Rana Plaza, sparked discussion in Canada about the social, moral,
    and legal responsibilities of Canadian retailers and the Canadian government to
    workers whose efforts ultimately benefit Canadian businesses and consumers.
    Various organizations urged Canadian businesses that profit from the industry
    and the Canadian government to become involved, not only in providing relief to
    the victims of the tragedy (which Loblaws has done in a very significant way),
    but also in working towards the long-term improvement of the wages and working
    conditions in the ready-wear garment industry.

[261]

The attention
    focused on the working conditions in the ready-wear industry as a result of the
    Rana Plaza collapse led to hearings before the Canadian Standing Senate
    Committee on Human Rights. In July 2015, the Committee produced a Report
    entitled Fast Fashion: Working Conditions in the Garment Industry. The Report
    described the working conditions in the ready-wear garment industry, the causes
    of those conditions, and attempts by the Canadian government to improve those
    conditions over the years. The Report acknowledged that the low wages and poor
    working conditions in the industry were the product, in part, of the low prices
    paid by foreign buyers for the products produced in factories like those found
    in Rana Plaza.

[262]

The claim
    advanced by the appellants lays bare important public policy questions going to
    the role Canada and, more specifically, its business community, play and should
    aspire to play in the global marketplace. Do Canada and Canadian business
    entities have any social, moral, or legal obligations to workers in developing
    countries whose labour contributes to the economic well-being of Canadian
    businesses and consumers? If so, what are those obligations? These difficult
    issues go well beyond the immediate interests of the parties to this lawsuit,
    and raise important matters of public interest.

[263]

In rejecting the
    submission that the public interest component of the claim should mitigate the
    damages, the motion judge referred to the appellants monetary motive. I agree
    that the appellants were not public interest litigants, their claim was not
    altruistic, and monetary compensation was the primary motivation behind their
    claim. However, a claim for damages, even very large damages, is not
    inconsistent with a significant public interest component in the issues raised
    in the claim. Both can exist together in a class action claim.

[264]

In
Smith
,
    this court rejected the argument that a monetary motive somehow eliminated any
    public interest component of the claim, at para. 39:

[T]he public interest element of
    this case is not undermined by the fact that the class plaintiffs sought,
inter
    alia
, to vindicate their own private property interests. In many cases,
    there is a mix of private interest and public interest. This court has
    consistently recognized the importance of the public interest factor and the
    availability of reduced costs awards to successful defendants because of this
    factor in cases where plaintiffs sought to vindicate their individual pecuniary
    interests.

[265]

The motion judge
    was entitled to consider the nature of the monetary claim in assessing the
    financial risks and benefits of the litigation as they related to the parties
    reasonable expectations with respect to costs. That consideration does not,
    however, mean that the public interest referred to in s. 31(1) must be taken
    out of the costs assessment when the losing party has a financial motive for
    advancing the claim.

[266]

With respect,
    the motion judge conflated the public interest as an element in assessing costs
    under s. 31(1), and the parties reasonable expectations with respect to costs
    based on the financial risks and benefits associated with the litigation. Both
    are relevant to the issue of costs, but they operate in different directions in
    this case. The presence of a public interest component in the claim works to
    mitigate the costs that the appellants, as the unsuccessful party in the
    proceedings, would otherwise be required to pay.

[267]

The motion judge
    also focused on the manner in which the appellants pleaded and pursued their
    claim in concluding that the public interest component did not warrant any
    reduction in the costs. There is no doubt that the appellants made serious
    allegations against the respondents. Those allegations went beyond the facts
    that the appellants had to prove to establish their claim. I cannot, however,
    see a connection between that approach and the presence or absence of a public
    interest in the proceeding. If the subject matter of the claim raised issues of
    broad societal concern, and therefore matters of public interest, I do not
    think that the claim loses that characteristic merely because it is framed in
    intemperate language and contains unsubstantiated allegations that are
    extraneous to the claims advanced in the pleadings.

[268]

It must be borne
    in mind that this is not a situation in which the appellants can be penalized
    in costs for the failure to prove allegations of fraud, dishonesty, or other
    dishonourable conduct made against the respondents: see
Hamilton v. Open
    Window Bakery Ltd.
, 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 26. The
    motions were not the time or the place for the appellants to attempt to prove
    those allegations. Therefore, it cannot be said that they failed to prove those
    allegations.

[269]

The nature of
    the pleadings and the manner in which the appellants pursued their claims were,
    however, relevant to the costs assessment in one way. Given the nature of the
    appellants attack on the respondents, the appellants could reasonably expect
    that the respondents would spare no cost and leave no stone unturned in
    vigorously defending the claims. The appellants could reasonably expect that,
    should their approach fail, as it did, they would face substantial claims for
    costs from the respondents.

(3)

What costs order should be made?

[270]

For the reasons
    outlined above, the motion judge erred in law in failing to give effect to the
    public interest component of the claims when fixing costs. He was required to
    consider that factor along with the other relevant factors he identified in the
    course of his reasons.

[271]

Many of the
    factors favoured the order made by the motion judge. These included:

·

the appellants claimed damages of $2 billion;

·

the issues were numerous and complicated;

·

the evidentiary record was enormous and detailed;

·

the appellants theory of liability was legally tenuous;

·

the nature of the attack on the respondents business ethics and
    motives demanded a no stone unturned defence; and

·

the respondents were entirely successful.

[272]

Having regard to
    all of the relevant factors, especially the tenuous nature of the claims, the
    indemnification of the successful respondents was, in my view, the major chord
    to be struck in fixing costs. The public interest component of the claim, while
    significant to the assessment, was a more minor chord.

[273]

The motion judge
    should have reduced the quantum of costs to reflect the public interest
    component in the claims. The award, however, should remain substantial and
    reflective of the respondents success in the proceedings. In my view, a
    reduction of the costs awarded by 30% achieves the appropriate balance. I would
    vary the motion judges costs order accordingly.

Doherty J.A.


Gray J.
(
ad hoc
):

[274]

I concur
    entirely with the reasons and dispositions of Doherty and Feldman JJ.A.

Released: D.D. December 20, 2018

D.K. Gray J. (
ad hoc
)





[1]

In these reasons, George Weston Limited, Loblaws Companies
    Limited, Loblaws Inc., and Joe Fresh Apparel Canada Inc. are referred to
    collectively as Loblaws.



[2]
In these reasons,
Bureau Veritas  Registre International de
    Classification de Navires et DAeronefs SA, Bureau Veritas Consumer Products
    Services, Inc., and Bureau Veritas Consumer Products Services (BD) Ltd are
    referred to collectively as Bureau Veritas and, together with Loblaws, are
    referred to as the respondents.



[3]
There is some debate about Ms. Das age at the time of the collapse.



[4]
On appeal, the appellants challenge the dismissal of their negligence and
    vicarious liability claims against Loblaws. There was no argument that the
    motion judge erred in dismissing the fiduciary duty claim and none of the
    grounds of appeal in the appellants notice of appeal make reference to that
    claim.



[5]
The action was instituted on April 22, 2015. Since s. 6 only tolls the
    limitation period while a class member is a minor, the class member would have
    to be 19 years old or younger as of this date for his or her claim not to be
    statute-barred.



[6]
The appellants further assert that, if the law of Ontario applies, the motion
    judge erred in concluding that it was plain and obvious that the claims would
    fail. Given my conclusion below that the motion judge correctly determined that
    Bangladeshi law applies, it is not necessary to address this issue.



[7]

The parties did not refer the court to the principle described
    in
Somers. v. Fournier
(2002), 60 O.R. (3d)
    (C.A.), at para. 51, that the quantification of damages is procedural as
    opposed to substantive law, and therefore in the choice of law context, the
lex
    fori
applies to it. It may be arguable that the Sharia
    law rule regarding the amount of damages to be awarded to the subset of female
    family class members referred to is a quantification issue. If so, then it is
    procedural law, and the
lex fori
, i.e. the law
    of Ontario, would apply in any event.



[8]

The quotation from
Jamila Khatun
, from para. 26 of that decision, ends here.



[9]
The respondents do not challenge the motion judges determination that s. 6
    applied to toll the claims of class members born on or after April 22, 1996.



[10]

Permission to appeal to the Supreme Court of the United
    Kingdom was granted on March 23, 2018 (UKSC 2017/0185).



[11]

Permission to appeal to the Supreme Court of the United
    Kingdom has been sought (UKSC 2018/0068).



[12]

Permission to appeal to the Supreme Court of the United
    Kingdom has been sought (UKSC 2018/0181).



[13]

Counsel for the LFO also made the argument that costs,
    especially costs associated with certification motions, are spiraling out of
    control, and that the parties expectations with respect to costs are no longer
    an appropriate guide in fixing the quantum. Counsel referred to observations of
    experienced class action judges to that effect: see
Goldsmith v.
    National Bank of Canada
, 2015 ONSC 4581;
Heller
    v. Uber Technologies Inc.
, 2018 ONSC 1690. This argument
    was not advanced before the motion judge. It raises important policy questions,
    which should only be addressed by this court with the benefit of a full record
    and the considered reasons of an experienced class proceeding judge.


