Canada: Saskatchewan Court Of Appeal Releases Important Decision On Contribution Between Parties Who Helped Cause A Plaintiff's Loss

Last Updated: July 9 2019
Article by Caroline J. Smith

The Saskatchewan Court of Appeal recently released an important decision regarding losses caused by multiple parties: Sound Stage Entertainment Inc v Burns (Sound Stage). In Sound Stage, the Saskatchewan Court of Appeal held that under Saskatchewan's Contributory Negligence Act (the Saskatchewan Act), a defendant can claim contribution towards payment of the plaintiff's damages from others who helped cause the plaintiff's loss only if the defendant and the parties from whom the defendant seeks contribution are all alleged to have caused the plaintiff's loss through negligence. In other words, if it is alleged that the defendant or the parties from whom the defendant seeks contribution caused the loss intentionally, the defendant cannot claim contribution. Sound Stage confirms a divide between Canadian provinces and territories on this issue.

BACKGROUND ON THE LAW OF CONTRIBUTION

Under the common law, when a loss is caused by multiple parties, the parties who caused the loss cannot claim contribution from each other. This is known as the "common law bar on contribution". The common law bar on contribution exists because when the common law was developing, it was thought immoral to allow a party who committed a wrong to use the court to relieve themselves from some of the responsibility for the loss.

In the 1920s and 1930s, the Conference of Commissioners on Uniformity of Legislation in Canada created draft legislation to modify, among other things, the common law bar on contribution. All Canadian provinces and territories adopted legislation based on the Conference's draft legislation, with some minor differences between provinces and territories.

The common law bar on contribution and the legislation aimed at repealing it do not affect any rights a defendant might have to claim contribution or indemnity under a contract or based on an independent claim. For example, if the owner of a building sues a general contractor for a fire that started while the general contractor was renovating the building, the common law bar on contribution would not prevent the general contractor from suing its subcontractor for breach of the subcontract (subject of course to any bars resulting from the way insurance coverage was arranged on the project). However, often the parties who cause a loss together have no contractual or other relationship that would allow them to make such a claim, so their only option for claiming contribution is under contribution legislation like the Saskatchewan Act.

SUMMARY OF SOUND STAGE

Two patrons of a Regina nightclub were shot. They sued the owner and operator of the nightclub, alleging that their security measures were negligent. The owner and operator sought leave under the Saskatchewan Act to make a claim against the shooter for contribution. The chambers judge denied leave, ruling that the Saskatchewan Act did not permit a contribution claim because the shooting was intentional, not negligent.

The majority of the Saskatchewan Court of Appeal affirmed the chambers judge's decision to deny leave for the claim against the shooter, holding that a claim for contribution may be made under the Saskatchewan Act only if both the defendant and the party against whom the defendant seeks contribution are alleged to have acted negligently.

In making its decision in Sound Stage, the Saskatchewan Court of Appeal declined to overrule its precedent set in the 1974 case of Chernesky v Armadale Publishers Limited. Ordinarily a ruling that confirms a longstanding precedent is not surprising. This ruling is surprising, however, in that it leaves the law on contribution in Saskatchewan in an odd state, and confirms a divide between Canadian provinces and territories regarding the law of contribution.

CURRENT STATE OF THE LAW OF CONTRIBUTION IN CANADA

The oddness of the state of contribution law in Saskatchewan becomes clear when the result in Sound Stage is compared with the result in a slightly different situation. Had the shooter shot the plaintiffs negligently—for example, if he dropped his gun and it fired accidentally—the nightclub owner and operator could have claimed contribution from him. However, because the shooter acted intentionally, the defendant could not claim contribution from him under the Saskatchewan Act. The Saskatchewan Court of Appeal has now confirmed that this is how the Saskatchewan Act is to be interpreted.

Sound Stage also affirms a divide between Canadian provinces and territories regarding the interpretation of contribution legislation. British Columbia, Manitoba, Ontario, Nova Scotia, and the Yukon all interpret their contribution legislation to allow defendants to make contribution claims against other parties regardless of whether they caused the plaintiff's loss negligently or intentionally. The law is somewhat unclear in Alberta, Newfoundland, New Brunswick, Prince Edward Island, Northwest Territories, and Nunavut.

Though some of the divergence between the provinces and territories can be explained by differences in the wording of the applicable legislation, the applicable legislation in most other provinces and territories, including British Columbia (Negligence Act) and Ontario (Negligence Act), is similar to the Saskatchewan Act. Given Sound Stage, the divide on the interpretation of contribution legislation likely will not be bridged until the Supreme Court of Canada takes an opportunity to weigh in, or until the legislation is amended. So far as the author is aware, Sound Stage has not been appealed to the Supreme Court of Canada.

CONCLUSION

Those handling claims in Saskatchewan should be aware that defendants may be barred from making contribution claims against other parties unless the defendant has been sued in negligence and the allegations against the other party can also be characterized as negligence. Those handling claims in Alberta, Newfoundland, New Brunswick, Prince Edward Island, Northwest Territories, and Nunavut should be aware that courts in those jurisdictions have not ruled conclusively on this issue, and it may be necessary to argue regarding whether Sound Stage should be followed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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