Court of Appeal Considers Apportionment of Fault in Multi-accident Cases

The Ontario Court of Appeal today released a decision dealing with apportionment of fault in tort. In Misko v. John Doe, a unanimous court (Justices Marc Rosenberg, wrote the reasons that were concurred in by Justices Eleanor Cronk and Eileen Gillese) dismissed an appeal from the decision of Justice John DeSotti. We commented on that ruling when it came out, expressing the view that it had been correctly decided. The Court of Appeal said that it agreed with Justice DeSotti’s conclusion but “for somewhat different reasons”.

We prefer Justice DeSotti’s original analysis.

Unfortunately, although the Court of Appeal’s reasons seem, at first glance, to include an analysis of the operation of s. 1 of the Negligence Act, the result hinged entirely on one particular fact that had the effect of neutralizing the operation of s. 1. Thus, it seems to us that this decision will not be of much help in future cases.

The Court of Appeal’s reasons also made no reference at all to the careful analysis of Pattillo J. in Veffer v. Feldman earlier this year, who disagreed with the reasons of DeSotti J. in Misko. We didn’t agree with Justice Pattillo’s conclusion, but his analysis was a considered one and it would have been helpful to have the Court of Appeal’s comments on it.

The Misko case concerns the recurrent and difficult problems that arise when the same plaintiff has been injured in the course of tortious events separated in time (typically, two or more car accidents). That was the situation here. The plaintiff was injured in an accident in 2001, when his vehicle collided with one operated by De Bruin. A little less than a year later, the same plaintiff was involved in a second accident, this time with an unidentified automobile. In both accidents, the plaintiff’s injuries were to his neck and back.

The plaintiff Misko settled with the insurer of De Bruin a few months later, accepting a payment of $130,000. As part of the settlement, De Bruin’s solicitors obtained a release which contained the standard provision, according to which Misko agreed not to make any claim or take any proceedings against any person who might claim contribution or indemnity from De Bruin.

Misko then sued his own insurer, Liberty Mutual, under the uninsured automobile coverage, seeking damages for injuries suffered in the second accident.

Liberty Mutual commenced a third party action against De Bruin, claiming contribution or indemnity for any liability that it might have to the plaintiff Misko. De Bruin’s solicitors moved before DeSotti J., to strike out the third party claim. That motion was granted and it was from Justice DeSotti’s ruling that this appeal was taken.

In essence, Liberty argued that the plaintiff’s injuries were indivisible, as between the first and second accidents, and that it should be able to obtain reimbursement from De Bruin for his share of the overall injury.

De Bruin, on the other hand, argued that the third party action should not be permitted to proceed. It argued in the alternative, that if the third party action were not dismissed, then the plaintiff’s action should be stayed or dismissed (because otherwise, the plaintiff would be in breach of his release to De Bruin).

The most important fact though, and the one that determined the outcome of the appeal, was the following:

Without objection, an affidavit of a law clerk with Misko’s solicitors was placed before the motion judge. In the affidavit, the solicitors state that the Liberty Mutual action is for damages arising exclusively from the second collision and that no damages are being claimed for injuries sustained in the first (De Bruin) accident. Counsel for Misko confirmed this fact before the motion judge, in their factum in this court, and in oral argument in this court.

As discussed below, the Court’s interpretation of this concession by the plaintiff was that it defeated the operation of s. 1 of the Negligence Act. Despite this, the Court engaged in a rather detailed analysis of that section. We think that it will be very difficult to apply that discussion to future cases.

Section 1 of the Negligence Act was central to Liberty’s argument. The section reads as follows:

Where damages have been caused or contributed to by the fault or neglect of two or more persons, the court shall determine the degree in which each of such persons is at fault or negligent, and, where two or more persons are found at fault or negligent, they are jointly and severally liable to the person suffering loss or damage for such fault or negligence, but as between themselves, in the absence of any contract express or implied, each is liable to make contribution and indemnify each other in the degree in which they are respectively found to be at fault or negligent.

[It is a pet peeve of ours, that judges and lawyers often use the word, “damages” to refer to the injury, loss or damage which gives rise to an entitlement to compensation, instead of to the monetary compensation itself. It is difficult to convince young lawyers of this though, when the usage appears in a statute like the Negligence Act and in decisions of the Court of Appeal…]

In upholding Justice DeSotti’s decision, the Court of Appeal emphasized the policy reason underlying the dismissal of the third party claim against De Bruin: if the Court were to accept Liberty’s argument, both plaintiffs and defendants would be reluctant to settle actions, for fear of unforeseen future consequences.

Justice Rosenberg began his analysis of the law by acknowledging that the Supreme Court’s decision in Athey v. Leonati established that the injured party is to receive full compensation.

Unfortunately, the Court of Appeal did not clearly reject Liberty’s argument, that the plaintiff’s injuries were indivisible. Had it done so, it could simply have said that s. 1 of the Negligence Act did not apply, since the “fault or neglect” of the two drivers did not “cause or contribute to” the same injuries (“damages”, in the language of the section). This was the approach taken by Justice DeSotti in his ruling on the original motion in this case.

The Court of Appeal seems, however, to have tacitly accepted Liberty’s contention, that the negligence of the two drivers had caused or contributed to one injury (see paras. 17 and 18). It went so far as to say that, “assuming that, as alleged by Liberty Mutual, there is a single indivisible injury, this simply means that, applying Athey v. Leonati, both tortfeasors are fully liable for the injury.” [para. 17]

However, the Court concluded that even if both tortfeasors are jointly and severally liable to the plaintiff, “the court…must still apportion responsibility between the tortfeasors. Liberty Mutual will be responsible in the pending trial only to the extent that the unidentified driver caused or contributed to the damages claimed”. [Another rather poor choice of words; the drivers contribute to the injury suffered, not to the damages claimed.]

The Court of Appeal said:

Applying s. 1 to the circumstances of this case, at the trial between Misko and Liberty Mutual, the court will determine both the amount of damages suffered by Misko and the degree of responsibility attributable to the second accident. Such allocation of responsibility is necessary since it is the foundation for determining the amount of contribution or indemnity. Applying s. 1 to the circumstances of this case, at the trial between Misko and Liberty Mutual, the court will determine both the amount of damages suffered by Misko and the degree of responsibility attributable to the second accident. [para. 18]

This seems to us problematical. If the two accidents caused only a single injury, as seems to have been accepted here, section 1 does not direct the court to assess the degree to which each accident caused the injury, but “the degree in which each of such persons is at fault or negligent“. Assume that both drivers were 100% at fault for their respective accidents, but the symptoms brought on by the second accident are considerably more severe than those of the first. How can it be said that that second driver was more “at fault or negligent” and so, should pay more?

Having accepted the applicability of s. 1 of the Negligence Act to the multi-accident scenario, the Court of Appeal was stuck with the principle, that each defendant is thereby made jointly and severally liable for the entirety of the plaintiff’s damages. Thus, on a plain reading of s. 1, Liberty Mutual would be liable to Misko for all of the damages attributable to the two accidents, presumably with a credit for the $130,000 already received from De Bruin. But in that scenario, Liberty’s concern (understandably) would be that De Bruin paid less than its full share, leaving Liberty to pick up the slack.

It is because of the Athey “full compensation” principle that the Court of Appeal itself, in Martin v. Listowel Memorial Hospital, held that, “when applying the section to any specific action, it is understood that joint and several liability to the plaintiff can and will attach only to a party defendant, although others who may also have been at fault could potentially have been found jointly and severally liable had they been sued by the plaintiff. Because procedurally the section only affects defendants, under this section the court is to apportion degrees of fault only to defendants.”

The Court in Misko had to get around the above passage from Martin, since De Bruin was not a defendant in the Liberty Mutual action. How could s. 1 apply to this case, given what the Court had said in Martin, about only applying that section to party defendants, not to persons who are not before the court?

Justice Rosenberg did so by holding, first, that the above-quoted excerpt was obiter dicta (not vital to the determination of the issue in Martin and therefore, not binding).

His second basis for distinguishing Martin was by saying that Liberty would only be liable for its fair share of the plaintiff’s damages. Why would this be so? Not for any legal reason, it seems, but the factual one mentioned at the beginning of this post: the plaintiff Misko had agreed to limit his claim against Liberty to the injuries suffered in the second accident.

That, then, is the cornerstone of this decision. Because the plaintiff had, in effect, opted out of the “substantive” ( to use the Martin term) rights created by s. 1, the Court of Appeal held that the rights of contribution and indemnity under that section also did not apply.

So, where does this leave us? The Court of Appeal seems to have proceeded on the basis that the two accidents caused one injury, such that s. 1 of the Negligence Act applied. This would mean that a trial court would have to determine the degree of “fault or neglect” on the part of each driver. But the Court of Appeal’s decision suggests that that analysis would also include an assessment of the extent to which each driver’s actions had caused the injury.

Our reading of the decision is that had the plaintiff not limited his claim to damages consequent on the second accident, the Court of Appeal’s approach to s. 1 would have allowed Liberty’s third party claim to stand (this was the approach of Pattillo J. in Vesser). We fear that today’s ruling will make litigation of these kinds of cases more likely, not less.

(Incidentally, the Court of Appeal referred to the well-known text, Apportionment of Fault in Tort, by our friend and regular contributor, David Cheifetz. We hope that David won’t be deterred from sharing his insights with us…)

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