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Facts[]

Edgeworth Construction Ltd. was engaged in the business of building roads in British Columbia. In 1977, it bid on a contract to build a section of highway in the Revelstoke area. Its bid was successful, and Edgeworth entered into a contract with the province for the work. Edgeworth alleges that it lost money on the project due to errors in the specifications and construction drawings. It commenced proceedings for negligent misrepresentation against the engineering firm which prepared those drawings, N.D. Lea & Associates Ltd. as well as the individual engineers who affixed their seals to the drawings.

Issue[]

  1. Is the defendent exempt from liability due to the intervention of the Ministry and their liability clause?

Decision[]

Appeal allowed.

Reasons[]

McLachlin, writing for the majority, holds that liability for negligent misrepresentation occurs when a defendant:

  1. makes a representation,
  2. knows it will be relied upon, and
  3. it is relied upon.

When Edgeworth performed the construction it was relying on N.D. Lea, not the provincial government. Following the provisions in London Drugs the court finds there was no express or implied protection of the respondent in the contract. Further, unlike in London Drugs the respondent could have drawn up a contract that protected it from liability.

Ratio[]

Employees who are not "powerless" will not benefit from an employer's exemption.

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