Canada: Case Summary: Barz v Driving Force Inc

Where the driver of a vehicle rented by his employer injured another worker on the job, the action against the lessor of the vehicle was dismissed because, although the owner was not immune under the Workers' Compensation Act and was exposed in vicarious liability, none of the liability was apportioned to the owner in the circumstances.

Barz v Driving Force Inc, 2019 ABQB 866, per Master Schlosser

Facts + Issues

The defendant, Driving Force Inc., rented a truck to Magna Electric Corporation. Drake, an employee of Magna, was driving the truck, and the plaintiff Barz was a passenger. Drake drove the truck into a ditch and Barz was injured.

Magna, Drake, and Barz were all covered by WCB benefits. Section 23 of the Workers' Compensation Act, RSA 2000, c W-15 [WCA] removed any cause of action they might have against each other. Section 23 provides as follows:

23(1) If an accident happens to a worker entitling the worker or the worker's dependents to compensation under this Act, neither the worker, the worker's legal personal representatives, the worker's dependents nor the worker's employer has any cause of action in respect of or arising out of the personal injury suffered by or the death of the worker as a result of the accident

(a)    against any employer, or

(b)    against any worker of an employer,

in an industry to which this Act applies when the conduct of that employer or worker that caused or contributed to the injury arose out of and in the course of employment in an industry to which this Act applies.

(2)  In an action to which Section 22 applies, a defendant may not bring third party or other proceedings against any employer or worker whom the plaintiff may not, by reason of this section bring an action against, but if the court is of the opinion that that employer or worker, by that employer's or worker's fault or negligence, contributed to the damage or loss of the plaintiff, it shall hold the defendant liable only for that portion of the damage or loss occasioned by the defendant's own fault or negligence. [Emphasis added by the Court]

Barz sued Driving Force as the owner of the vehicle pursuant to s 187 of the Traffic Safety Act, RSA 2000, c T-6 which deems a person driving a vehicle with the consent of the vehicle's owner to be the owner's employee and driving the vehicle in the course of their employment.

Driving Force applied to have the action summarily dismissed. The application raised four questions:

1. Was there an action against Driving Force despite the statutory bar in s 23 of the WCA?

2. If so, what for?

3. Was liability joint, several, or joint and several?

4. Was there any evidence from any source establishing Driving Force's several liability on a balance of probabilities?

HELD: For the Applicant; action against Driving Force dismissed.

1. The Court held that an action lay against Driving Force which was not protected by the statutory bar in s 23 of the WCA.

1. The Workers' Compensation Act does not abolish vicarious liability:Wadsworth v Haynes, 1996 ABCA 39

2. Pursuant to s 23(2) of the Act, the action against the owner, Driving Force, could only be for that portion of the damage or loss occasioned by Driving Force's own fault or negligence.

3. Driving Force's liability under s 23 is several: McIver v McIntyre, 2018 ABCA 151, at para. 58

4. In this case, there was no evidence from any source establishing Driving Force's several liability on a balance of probabilities.

Commentary

We agree that the result in this case was correct, however, with respect, the extremely concise reasons do not clearly and completely set out why that is so. 

In this case, the "WCB immunity" created by s. 23 of the Workers' Compensation Act, only applies to those parties in the scenario who qualified as either "workers" or "employers" under the Act. Since the injured party Barz and the at-fault driver Drake were on the job at the time, Drake was an immune "worker" and Magna was also covered by the immunity as Drake's "employer".  However, the owner of the vehicle, Driving Force, was neither an "employer" nor a "worker" in the scenario and thus did not enjoy WCB immunity under s. 23 of the Act.  There are several cases holding that where a party is exposed to direct or vicarious liability and is not an "employer" or "worker" that party is not protected by s. 23.

In this case, Driving Force had exposure to Barz in vicarious liability per the Traffic Safety Act, E.S.A. 2000, c. T-6, s. 187(1) which provides as follows:

(1)  In an action for the recovery of loss or damage sustained by a person by reason of a motor vehicle on a highway, a person who, at the time that the loss or damage occurred,

(a)  was driving the motor vehicle, and

(b)  was living with and as a member of the family of the owner of the motor vehicle,

is deemed, with respect to that loss or damage,

(c)  to be the agent or employee of the owner of the motor vehicle,

(d)  to be employed as the agent or employee of the owner of the motor vehicle, and

(e)  to be driving the motor vehicle in the course of that person's employment.

One might argue that the statutory deeming of the at-fault driver as an "agent or employee" of the owner, deemed "to be driving the motor vehicle in the course of that person's employment", qualifies the vehicle owner as an "employer" for the purposes of s. 23 of the Workers' Compensation Act.  However, the Traffic Safety Act, deems the owner to be the "agent or employee" of the owner, not only as an "employee".

In this case, Master Schlosser found that there were no facts to suggest direct liability on the part of Driving Force here. He does not expressly rule out vicarious liability, and he clearly could not in the face of the Traffic Safety Act, s. 187(1). Indeed, he (properly) on relies on Wadsworth v Haynes, 1996 ABCA 39 for the proposition that what is now s. 23 of the Workers' Compensation Act, does not abolish vicarious liability. So how could Driving Force, which had an exposure to vicarious liability be immune under s. 23?

The answer is that Driving Force was exposed to vicarious liability but should properly be apportioned 0% of the liability as between it and Drake's employer Magna (the lessee or rentee of the vehicle).

The Master cited McIver v McIntyre, 2018 ABCA 151 for the proposition that Driving Force's liability was several for the purposes of apportionment of liability in the face of s. 23 of the Workers' Compensation Act.  In McIver, the Courts provided more detailed reasoning for dismissing the claim against the vehicle owner, who stood in an analogous position to that of Driving Force in this case.

In McIver, McIntyre brought his vehicle into a repair shop (Calgary Propane) for maintenance.  One of Calgary Propane's employees, Morgan, took the vehicle out for a test drive and injured the Plaintiff McIver (who was also on the job) in an accident.  The trial judge held that while the repair shop and Morgan were immune per what is now s. 23, McIntyre was not immune with respect to his vicarious liability as the vehicle's owner. However, the trial judge (at 2016 ABQB 667) dismissed the WCB claim against McIntyre because, in apportioning liability as between the repair shop and McIntyre, 100% of that liability should be apportioned to the repair shop.  McIntyre exercised no supervision over the at-fault employee at the time of the accident. The trial judge held as follows:

34  Having found that the both the Defendant and the employer are vicariously liable and that their liability can be apportioned under s 23(2) of the WCA, the next issue to determine is to assess and apportion the liability.

. . .

36  Section 23(2) creates a liability that is several; not joint and several: [Dempsey v. Bagley, 2016 ABQB 124] at para 66. As Philips J. explained:

Section 23(2) of the WCA therefore, provides a balance and fairness in respect of liability between protected tortfeasors and non-protected tortfeasors under the WCA scheme. Non-protected tortfeasors under section 23(2) are only liable for their own portion of fault or negligence and nothing more

37  This means that where a WCA protected party is found to have contributed to a plaintiff's loss or injury, the non-protected tortfeasor's liability will be limited to that proportion to which that non-protected tortfeasor is responsible and liable. In this case, because the employer is protected under the WCA, the Plaintiff can recover vicariously against the Defendant but only to the extent of the Defendant's respective proportion of liability as determined by the Court.

38  In Dempsey, liability was apportioned 75%-25% on the basis of varying levels of control over the individuals who were permitted to drive the Brinks' trucks: Dempsey at paras 70-71. The Third Party Lessor, who was not protected by the WCA was apportioned 25% of the liability. The result was that the injured Brinks' employees could only recover 25% of the damages awarded, because 75% of the liability was apportioned to the protected employer, Brinks and thus recovery for that amount was statute barred under the WCA.

39  Unequal apportionment of liability is available in cases of vicarious liability; it is the level of supervision that determines the degree of fault: [Blackwater v. Plint, 2005 SCC 58] at para 69.

40  In this case, the Defendant was the owner of the vehicle who had left the vehicle in the care and custody of the employer for the sole purpose of completing brake repairs to the vehicle. The Defendant had no control or say over who drove the vehicle and had no personal fault for the accident. The Defendant is liable only because the statutory ownership provisions under s 187 of the TSA makes him vicariously liable.

41  At the time of the accident, the employer had full custody and control of the vehicle and supervised the Driver employee who drove the vehicle. The employer was responsible for hiring and supervising its mechanics and for authorizing test drives of third party owned vehicles entrusted to it for repairs. The employer was best positioned to have supervised, trained and directly controlled who and how the vehicle was test driven while the vehicle was in its care and custody. I find that the employer was in a better position than the Defendant to supervise the situation and prevent the loss.

42  However, it was the Defendant's vehicle that contributed to the Plaintiff's injuries and damages. When considering apportionment of vicarious liability to an owner of a vehicle, Côté JA cautioned, "[o]ur whole scheme of compensation for automobile accidents through compulsory automobile liability insurance would fall down if there was no vicarious liability. The law does not require drivers to insure; it requires owners of vehicles to insure. The Highway Traffic Act section 181 [now section 187 of the TSA] imposes liability on vehicle owners for special policy reasons": Wadsworth at para 34.

43  Bearing in mind Côté JA's caution, it is important to consider the very unique facts at play here.

44  The Defendant had no control over the operation of his vehicle at the time of the accident. And while the Defendant as the owner of the vehicle should have known of his potential statutory liability, what more supervision could he have done when entrusting his vehicle to the employer for the sole purpose of having repairs completed on it. While the Defendant presumably consented to the vehicle being driven as part of the process of completing the repairs, his expectation was that it would be driven by a qualified trained mechanic with a valid operator's license. The Defendant's reasonable expectation was that if there was any employee use of the vehicle causing injury or damages while the vehicle was in the care and custody of the employer, the employer would be responsible for any such injuries or damages. The Defendant's expectation seems consistent with the expectation and practice in the insurance industry. The Defendant's coverage under the Standard Automobile Policy (SPF No 1) specifically excludes garage personnel, such as the employee Driver, from coverage for any loss, damage or injury sustained while engaged in the use or operation of the vehicle while in the business of repairing, maintaining or servicing vehicles. Thus, while the Defendant had insurance coverage for the vehicle, that coverage did not extend to the employee Driver. This would seem to be one of those rare occurrences that Côté JA alluded to in Wadsworth.

45  In the result, pursuant to s 23(2) of the WCA, I conclude that 100% of the vicarious liability for the Plaintiff's damages should be apportioned to the employer.

This was upheld by the Court of Appeal, and that this does not frustrate the purpose of s. 187(1) of the Traffic Safety Act:

57  The second issue concerns how to apportion Mr. McIntyre's loss between Mr. McIntyre, who is vicariously liable as the vehicle owner under s 187 of the TSA, and Calgary Propane, which is notionally vicariously liable as the employer of Mr. Morgan.

58  The text of s 23(2) of the WCA states the proper method of apportioning loss as follows: ". . . if the court is of the opinion that the employer ... by that ... employer's fault or negligence contributed to the damage or loss of the plaintiff, it shall hold the defendant liable only for that portion of the damage or loss occasioned by the defendant's own fault" (emphasis added). Three points emerge:

(a)  The section contemplates that at least two persons have contributed to the plaintiff's loss by their "fault". It makes it clear that the liability of Mr. McIntyre and the notional liability of the Calgary Propane is several, not joint or joint and several. The court may hold Mr. McIntyre liable to compensate Mr. McIver's loss only to the extent that Mr. McIntyre's "fault" caused it; he is not liable to compensate for loss caused by Calgary Propane's "fault".

(b)  Since liability under s 23(2) is several and since s 23(1) bars suit against Calgary Propane, any of Mr. McIver's loss allocated to the "fault" of Calgary Propane and not to Mr. McIntyre, is unrecoverable by Mr. McIver (that is, the WCB, subrogated to his right of action).

(c)  The criterion for apportioning Mr. McIver's loss between the two parties contemplated in s 23(2) of the WCA is the relative contributions their fault made to the loss coming about. Apportioning liability under s 23(2) requires the court to consider how much Mr. McIntyre's "fault" and Calgary Propane's "fault" each contributed to Mr. McIver's loss.

59  In the apportionment part of her decision, the trial judge agreed that the loss must be allocated between Calgary Propane and Mr. McIntyre in the proportions it was caused by their respective "fault". Apportioning loss according to the contribution made by the parties' "fault" can seem like an artificial exercise where two parties are vicariously liable for the tort of another. Since vicarious liability is strict and does not depend on personal wrongdoing, it is difficult to see how they are "at fault", or how their respective levels of "fault" differ.

60  The trial judge cut this conceptual knot by applying Blackwater v. Plint, 2005 SCC 58, [2005] 3 S.C.R. 3 (S.C.C.) [Blackwater] and apportioning the loss according to the extent that Calgary Propane and Mr. McIntyre exercised supervision over the tortfeasor. She found that Mr. McIntyre had no "control or say" over the employee who drove the vehicle, whereas Calgary Propane supervised the employee and had "full custody and control" of the vehicle at the time of the accident. Accordingly, she apportioned 100% of the loss to the "fault" of Calgary Propane and found Mr. McIntyre liable for none of it.

61  On appeal, Mr. McIver argues that the trial judge erred in two respects: (1) by only taking into account the degree of supervision exercised by Calgary Propane and Mr. McIntyre over Mr. Morgan and omitting consideration of the purpose for holding a vehicle owner vicariously liable under s 187 of the TSA; and (2) by making palpable and overriding errors of fact in her conclusion that Calgary Propane exercised supervision over Mr. Morgan, whereas Mr. McIntyre did not. If successful, Mr. McIver asks this Court to hold Mr. McIntyre liable for 50% of the loss and attribute the other 50% to the "fault" of Calgary Propane.