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Eron Mortgage Corporation was a mortgage broker under the Mortgage Brokers Act. Cooper had advanced money to Eron. Eron's mortgage license was suspended and they went out of business when it was discovered that they used money of over 6,000 investors for unauthorized purposes. Cooper alleges that the registrar breached a duty of care that it allegedly owed to her and other investors as it had been aware of the serious violations of the Act committed by Eron and not suspended its license soon enough. Cooper was successful at the lower court which Hobart and the Crown appealed.


  1. Should this new type of negligence be recognized?
  2. Should the Anns test still hold?


Appeal dismissed, no duty of care found.


McLachlin and Major, writing for the court, hold first that the Anns test must still apply. They decide first that this is not a type of negligence that can be likened to any other case as it deals only with pure economic loss. However, as there was insufficient proximity between Cooper and the registrar there was no duty of care owed. They then state in obiter that even if a duty had been established, it would have been negated in the second part of the Anns test for policy reasons.


Canada still uses the Anns test in negligence cases, and an additional step was introduced in determining prima facie duty of care.