This is the second in my series of posts on some of the unique topics in BC Civil sexual assault lawsuits.  Yesterday I wrote about limitation periods, today I’ll address another important topic, the legal principle of “Vicarious Liability“.

Civil Lawsuits are designed to compensate victims who suffered harm at the hands of others.  Since one of the primary goals of civil litigation is compensation it is important to obtain judgement against a Defendant who has the ability to pay.  Otherwise the judgement may be worth little more than the paper it’s written on.

Lawyers call a judgement where a Defendant can’t pay a ‘dry judgement‘.  Given the stress, expense and time invested in a civil lawsuit the process is hardly worth the effort if a successful plaintiff ends up with a dry judgement.  In Civil sexual assault cases this often is a possibility.

Insurance contracts often contain exclusions for “intentional harm“.  Civil suits for damages for sexual assault are ‘intentional tort claims‘ and these are often caught by intentional harm exclusion clauses.  For this reason if a Defendant does not have assets (or applicable insurance coverage) a Plaintiff will have to consider whether a civil lawsuit will be worth the effort.

That is where the law of vicarious liability comes in.  Vicarious liability is a legal principle which in certain circumstances extends liability (fault) for a wrongful act to governments, corporations and institutions.  This doctrine can apply to intentional torts.

So in what circumstances can Courts impose vicarious liability in Canada?  This was addressed by the Supreme Court of Canada in a case called John Doe v. Bennett.  Specifically the Canadian High Court set out the following test:

If someone is injured/killed intentionally by someone else can a third party be held civilly liable for failing to prevent the harm?  While the answer to this question turns heavily on the facts the answer can be yes and earlier this month the Supreme Court of Canada released a decision discussing this complex area of personal injury law.

In Fullowka v. Pinkerton’s of Canada Ltd. nine workers were killed in the course of a contentious labour dispute.   During the bitter strike one of the strikers “evaded security and surreptitiously entered the mine.  He set an explosive device which, as he intended, was detonated by a trip wire, killing nine miners.”

The survivors of the dead miners brought a lawsuit against various parties including the mine’s owners, their security firm and the territorial government claiming damages for “negligently failing to prevent the murders“.

The lawsuit largely succeeded at trial but was overturned by the Court of Appeal.  The Supreme Court of Canada ultimately sided with the Court of Appeal but before dismissing the case highlighted some important legal principles addressing the need to take reasonable steps in certain circumstances to prevent foreseeable intentionally inflected harm at the hands of others.  Some of the highlights of the Court’s discussion were as follows:

The analysis turns on whether the relationship between the appellants and the defendants discloses sufficient foreseeability and proximity to establish a prima facie duty of care and, if so, whether there are any residual policy considerations which ought to negate or limit that duty of care… The analysis must focus specifically on the relationships in issue, as there are particular considerations relating to foreseeability, proximity and policy in each…

[19] In my view, the relationship between the murdered miners and Pinkerton’s and the government meets the requirements of foreseeability and proximity such that a prima facie duty of care existed.  I also conclude that these prima facie duties are not negated by policy considerations…

[26] In cases of this nature, the law requires close examination of the question of proximity. The inquiry is concerned with whether the case discloses factors which show that the relationship between the plaintiff and the defendant was sufficiently close and direct to give rise to a legal duty of care, considering such factors as expectations, representations, reliance and the property or other interests involved….  Proximity is not confined to physical proximity, but includes “such close and direct relations that the act complained of directly affects a person whom the person alleged to be bound to take care would know would be directly affected by his careless act”…

[27] The Court discussed proximity in detail in Childs, at paras. 31-46.  In Childs, as here, the proposed duty was to take care to prevent harm caused to the plaintiff by a third party; in other words, what was proposed there was a positive duty to act even though the defendant’s conduct had not directly caused foreseeable physical injury to the plaintiff. The Court noted that there are at least three factors which may identify the situations in which the law has recognized such duties (paras. 38-40).  The first is that the defendant is materially implicated in the creation of the risk or has control of the risk to which others have been invited.  The second is the concern for the autonomy of the persons affected by the positive action proposed.  As the Chief Justice put it: “The law … accepts that competent people have the right to engage in risky activities … [and] permits third parties witnessing risk to decide not to become rescuers or otherwise intervene” (para. 39). The third is whether the plaintiff reasonably relied on the defendant to avoid and minimize risk and whether the defendant, in turn, would reasonably expect such reliance….

The relevant question is whether the miners reasonably relied on Pinkerton’s to take reasonable precautions to reduce the risk.  The Court of Appeal found that was their reasonable expectation. This reasoning, in my view, supports rather than negates the existence of sufficient proximity.  The fact that, as the Court of Appeal noted, any higher expectation on the miners’ part would have been unreasonable was not relevant to the analysis.

[31] Pinkerton’s must have shared the miners’ expectation.  It was there to protect property and people. The whole point of its presence was to help secure the site so that the mine could continue to operate. The miners who continued to work during the strike made up a well-defined and identifiable group. Pinkerton’s surely ought to have expected that the very people it was there to protect would rely on it to exercise reasonable care in doing so.

[32] Pinkerton’s also undertook to exert some control over the risk..Pinkerton’s undertook to exert some control over everyone who came onto the property, including Mr. Warren…

[34] I conclude that the reasonable expectations of both the miners and Pinkerton’s as well as Pinkerton’s undertaking to exert some control over the risk to the miners supported the trial judge’s finding of proximity…

As I’ve previously written, section 86 of the Motor Vehicle Act makes owners or lessees of vehicles responsible for any damage or loss caused by the operation of their vehicle by an individual to whom consent was given.

Reasons for judgement were released today by the BC Supreme Court interpreting the meaning of ‘consent’.  In today’s case (Morris v. Morris) the Plaintiff was injured when riding as a passenger in a vehicle driven by his brother.  The vehicle was rented from Enterprise Rent-A-Car.   The Plaintiff sued the driver and the rental car company.

The vehicle, however, was not rented to the Plaintiff’s brother, but rather his mother.  The rental contact stated “No Other Driver Permitted“.   Despite this restriction, after renting the vehicle the Plaintiff’s mother let the Plaintiff’s brother drive the vehicle.

The issue at trial was whether, in these circumstances, Enterprise Rent-A-Car could be held liable as registered owner.  A recent case (McEvoy v. McEachnie) held that a registered owner can be held liable in similar circumstances (click here to read my summary of the McEvoy case).  In today’s case, however, Mr. Justice Cole refused to follow the precedent set in McEvoy finding that the judge in that case “failed to consider binding authority“.  In finding the rental company not liable as having not consented to the driver operating the vehicle Mr. Justice Cole summarized the law and distinguished the McEvoy case as follows:

[31] The most recent case from British Columbia dealing with the interpretation of implied consent under s. 86 of the Act, and the plaintiff argues I am bound by that decision, isMcEvoy v. McEachnie, 2008 BCSC 1496 [McEvoy]. In that case, a father gave his daughter consent to drive his vehicle but made it expressly clear that no other drivers were permitted. The daughter subsequently allowed her friend to drive the vehicle, because she was intoxicated, and an accident ensued. In finding the father liable, the Court appliedBarreiro, a case where a rental car employee consented to a vehicle being rented by an underage driver, contrary to company procedure, and interpreted it, at para. 32, to stand for the proposition that:

[32] … so long as the transfer of car keys from owner to second party is done by an exercise of free will, and the second party gives the keys to a third party by free will, the owner will be deemed to have consented to the third party’s possession of the car. That will be the result even though the owner and the second party had an understanding that the third party was not to ever get possession of those keys.

[32]         The Court in McEvoy concluded that, except for the fact that the father did not obtain a financial benefit from the friend’s possession of the vehicle, the case was not distinguishable from Barreiro. In the present case, other than the fact that the agreement forbidding other drivers was written, rather than oral, the facts cannot be distinguished  from McEvoy. Enterprise freely gave the keys to Ms. Kauth, she freely gave the keys to Mr. Morris, despite expressly agreeing that there would be no other drivers. Enterprise would, on the logic of McEvoy, be taken to have consented to Mr. Morris’ possession of the vehicle and therefore, Enterprise would be vicariously liable pursuant to s. 86 of the Act for any liability that Mr. Morris may have for this accident.

[33]         On its face, it would appear that this decision would be binding on this Court, because the facts cannot be differentiated merely because the agreement in McEvoy was oral and not written. In Hansard, Spruce Mills Ltd., Re (1954), 4 D.L.R. 590 at 592, 13 W.W.R. (N.S.) 285 (B.C.S.C.) [Hansard], the Court held that a trial judge should follow the decisions of his brother judges of the same court unless subsequent decisions have affected the validity of the impugned judgment; it is demonstrated that some binding authority in case law or some relevant statute was not considered; or the judgment was unconsidered, where an immediate decision is given without the opportunity to fully consult authority. If none of these situations exist, barring a distinguishing feature between the facts, a court would be correct in following decisions of a court of the same level.

[34] On the basis of the test set out in Hansard, McEvoy in my view is not binding on this Court as it failed to consider binding authority. In Godsman, Smaldino, Prasad and Louisthe Court refused to find consent where it would not have been given in the circumstances. McEvoy overlooks these decisions and does not consider this test.

[35] The Court instead held the father liable because they interpreted Barreiro to mean that if keys are transferred by free will to the daughter, the father is deemed to consent to subsequent transfers of possession including his daughter’s friend’s possession. However, in Barreiro the company transferred possession to the rental car employee and gave the employee the authority to transfer possession to people wishing to rent the vehicle. Therefore the employee had authority to transfer the vehicle subject to following proper procedures, but in McEvoy the daughter lacked authority to transfer the vehicle.

[36] Furthermore, the Court in McEvoy relied upon Morrison to support the finding of consent. In Morrison, consent was given subject to conditions upon the authorized driver, namely that the company vehicle was not to be operated by an employee for personal use. These conditions were breached, but the Court held that the conditions did not vitiate the consent. In McEvoy, the Court interpreted “no other drivers” as a condition. However, in my view there is a distinction between no consent at all and consent subject to conditions. The Court should first find implied consent exists on all the circumstances and then apply Morrison to any conditions added to that implied consent: K.T. v. Tran, 2007 ABCA 13, 280 D.L.R. (4th) 142.

[37] Had the Court in McEvoy considered Godsman, Smaldino, Prasad and Louis, the result may have still been the same on the second ground for finding consent, stated by Mr. Justice Rogers, but not on the first. Based on Godsman, Smaldino, Prasad and Louis, consent can only be implied if it would have been granted as a matter of course in the circumstances. In McEvoy, the father’s purpose in telling the children to not let others drive his cars was not to limit his statutory liability as the car’s owner, but because he trusted his kids but not their friends and he wanted to keep his children and his cars safe. It could be argued that the father in McEvoy would have consented in the circumstances to the friend driving because his daughter was intoxicated and he would want the car and his daughter home safely. On the present facts, like in Prasad, it is hard to imagine that Enterprise would have given consent in the circumstances.

[38] The trend in our jurisprudence tends to be more restrictive than the broad policy approach that is taken in some United States jurisdictions and in some degrees by the Alberta courts. I am satisfied that the test for implied consent in British Columbia is whether the owner would have consented in the circumstances:  Godsman, Smaldino, Prasad and Louis. Based on the facts of the present case, there was no express consent given by Enterprise to Mr. Morris and in my view, it is clear that consent would not have been given in the circumstances. Enterprise did everything possible to limit its liability and if its liability is to be extended in any event, to prefer the protection of third parties, then that is the job of the Legislature to rewrite the wording of the statute.

[39] I therefore dismiss the action against the defendant Enterprise and they are entitled to their costs.

I understand that the McEvoy case is going to be heard by the BC Court of Appeal in the near future and the law of ‘consent’ with respect to registered owner liability should hopefully be more clear after they weigh in on this issue.

The law places a very heavy burden on vehicle owners in BC when their vehicles are involved in an at-fault collision.  In British Columbia registered owners are “vicariously liable for the negligence of the driver where the driver acquired possession of the vehicle with the consent (express or implied) of the owner“.

What this means is, if you let someone else operate your vehicle and they are at fault for a crash then you are at fault for that crash.  Reasons for judgement were released today showing just how far Courts in BC can go in determining the circumstances in which an owner “consents” to someone else operating their vehicle.

In today’s case (Snow v. Friesen) the Plaintiff was seriously injured in Vernon BC when a vehicle owned by a man named Mr. Saul and driven by a woman named Ms. Friesen struck the Plaintiff while walking on a sidewalk.  The Defendant driver apparently fell asleep at the wheel and lost control.

The Court found that Mr. Saul did not intend to let Ms. Friesen borrow his vehicle, he in fact did so by mistake.  Mr. Justice Williams found that Ms. Friesen asked to borrow Mr. Saul’s vehicle but at the time he was busy working and did not hear her because he was hard of hearing and had his hearing aid out.  As a result Mr. Saul mistakenly thought someone else was asking to borrow his vehicle so he granted permission,   Notwithstanding this interesting factual finding the Court went on to find that Mr. Saul was still vicariously liable for the collision because his actions constituted ”express consent” under section 86 of the BC Motor Vehicle Act.

The Court’s discussion of the law of liability of registered owners is set out below.  This case is worth reviewing in full for all vehicle owners in British Columbia as it shows the serious duties courts impose on vehicle owners when they let others take possession of their vehicles:

[68] Pursuant to the common law and s. 86 of the Motor Vehicle Act, R.S.B.C. 1996, c. 318, an owner of a vehicle is vicariously liable for the negligence of the driver where the driver acquired possession of the vehicle with the consent, express or implied, of the owner.

[69] As is apparent from my analysis of the evidence and findings of fact, the implied consent doctrine does not arise in this case.  Instead, the issue stands to be determined on the basis of express consent.  Specifically, it is necessary to decide whether, in these circumstances, the plaintiff has proven that Ms. Friesen had the vehicle with the consent of Mr. Saul.

[70] I consider the following statement of Thackray J.A. in Barreiro v. Arana, 2003 BCCA 58, to be apposite:

[13]      Whether there was consent must be determined by reference to the facts and by the application of general legal principles viewed in the context of the statutory scheme.  The issue of consent is not, as suggested by the trial judge, “defined by s.86”: however the statute is the governing factor.

[71] The cases are replete with reference to the notion of public policy and the necessity of recognizing the legislative intent of s. 86.  Again, I will resort to a quotation from Barreiro:

[26]      The effect that legislative intent has upon the meaning of “consent” is emphasized by the words of Goldie J.A. in Morrison as quoted by the trial judge:

[24]  It is apparent the legislature has imposed a heavy burden on those who have within their power the control of motor vehicles. … The reason for legislative intervention may be traced, in part at least, to the appalling consequences of reckless use of motor vehicles.  Irresponsibility on the part of those who may deny or confer possession of motor vehicles may be seen as the reason for the legislative initiative.  The legislation in question must be regarded as remedial.

[27]      Legislative intention must be acknowledged as having a fundamental purpose and as having been inspired by a need.  As Mr. Justice Goldie said, the legislation is remedial.  As such it might well be at odds with traditional legal concepts of agency, but that will not deny its validity.

[28]      The legislative intent in section 86 must be taken, as noted by Goldie J.A. in Morrison, to address the reckless use of motor vehicles and the section imposes “a heavy burden on those who have within their power the control of motor vehicles.”  In Bareham, Mr. Justice MacDonell, after reviewing the statute, said at 194:

In this case, the only policy reasons to be considered are those in favour of protecting innocent third parties seeking compensation for injuries suffered at the hands of negligent automobile drivers and, vicariously, owners.

[72] A helpful discussion of the importance of bearing in mind the underlying rationale, or legislative purpose, of the legislation is found in Yeung (Guardian ad litem of) v. Au, 2006 BCCA 217, where the matter was touched upon by Newbury J.A., writing for a five judge division of the Court, although the issue there was principally one of determining the liability of an individual who held rights under a conditional sales contract.  Nevertheless, she considered the social and economic policy objectives of the legislation, and the legislative intention.  Her analysis is found at paras. 32 through 38.  I will not reproduce the entire discussion, but consider it worthwhile to quote a portion of her conclusion as found at para. 38:

… the purposes of s. 86 are, I would suggest, similar – to expand the availability of compensation to injured plaintiffs beyond drivers who may be under-insured or judgment-proof, and to encourage employers and other owners to take care in entrusting their vehicles to others.  These objectives are consonant with the objectives of vicarious liability generally, as described by McLachlin J. (now C.J.C.) in Bazley v. Curry [1999] 2 S.C.R. 534, 62 B.C.L.R. (3d) 173, the leading Canadian case on vicarious liability.

[Emphasis added.]

[73] In my view, the outcome which must result in the facts at bar is determined by an application of the leading decision on the issue, Vancouver Motors U-Drive Ltd. v. Terry, [1942] S.C.R. 391.  There, an employee of Vancouver Motors U-Drive Ltd. had rented an automobile to a driver who had no valid licence.  The driver had falsely represented that he was another person, and showed that person’s valid driver’s licence.  He signed that person’s name to the rental agreement.  The driver was subsequently involved in an accident, and the appellant argued that it was not vicariously liable because the negligent driver had not acquired possession of the car with the appellant’s consent.  In interpreting a legislative provision similar to s. 86 of the Motor Vehicle Act, Kerwin J., for the majority, stated as follows:

In the present case, the appellant physically transferred the possession of the motor vehicle to Walker. Does the fact of Walker’s false statement that he was Hindle and the holder of a subsisting driver’s licence, accompanied by the forgery of Hindle’s name, vitiate the consent that was in fact given? There may be no difficulty in two of the hypothetical cases put in argument, (1) where a motor vehicle is stolen from a garage, and (2) where possession is obtained from the owner by duress. In the first there would be no consent in fact and in the second the owner would not have been at liberty to exercise his free will. On the other hand, the class of owners under subsection 1 of section 74A is not restricted to those who carry on such a business as the appellant and circumstances may be imagined where an owner loaned his automobile to a friend on the latter’s statement that he possessed a subsisting driver’s licence, which statement might be false either because he never had possessed such a licence or because his current licence had been revoked; or again, where A secured possession of an automobile by falsely representing himself in a telephone conversation with the owner of the vehicle to be a neighbour’s chauffeur. It is impossible to conceive all the various circumstances that might give rise to the question to be determined here but in my view an express consent is given, within the meaning of the enactment, when possession was acquired as the result of the free exercise of the owner’s will.

[74] Later, Kerwin J. reached the following conclusion:

The word “consent” may have different meanings in different statutes. In the present case it has, in my opinion, the meaning already indicated and, on that construction, express consent was given by the employees of the appellant to Walker’s possession of the motor vehicle even though the action of the employees was induced by Walker’s false statements.

[75] In this case, Mr. Saul, of his own free will, absent duress or theft, gave consent to the person who asked to use the motor vehicle.  The fact that Mr. Saul was mistaken as to the identity of that individual does not change the outcome.

[76] In Vancouver Motors U-Drive, consent was not vitiated even though the agent/employee was misled as to the identity of the person renting the car.  In Bareham (Guardian ad litem of) v. Desrochers, [1994] B.C.J. No. 1826, 97 B.C.L.R. (2d) 186 (S.C.), on an application of the same principle, the mother of the driver argued that she had not consented to her son having her vehicle because she was not aware that he had no driving licence.  The trial judge there, Macdonell J., found that once the mother gave consent, the fact that her son was driving her car illegally was irrelevant to the application of s. 86(1).

[77] The erroneous basis upon which Mr. Saul granted his consent is no defence.  The onus was on him to ensure the public safety in lending his truck.  The statute imposes a duty upon him, which duty includes knowing and assessing the fitness of the driver who seeks to have his vehicle.  The heavy burden which is imposed upon motor vehicle owners was not met.

[78] In the present case, Mr. Saul did not take steps to confirm the identity of the person who sought to use his vehicle, other than relying upon what turned out to be the assumption of Mr. Connolly.

[79] The focus of the analysis is on whether the owner gave express consent to the individual who seeks to have the vehicle.  Once that is found, as the facts of that case indicate, there is not a great deal which will impact upon the imposition of liability.

[80] While judicial interpretation of s. 86(1) may, at first glance, appear overly strict, as Paris J. stated in Beaudoin v. Enviro-Vac Systems Inc., [1992] B.C.J. No. 205, 1992 CanLII 444 (S.C.), at para. 13:

The Legislature has placed a very heavy onus on the owner of a motor vehicle who chooses to permit another to drive it. Whether that policy is or is not draconian is not for me to say.

[81] I have no doubt that the outcome here may seem harsh from the perspective of Mr. Saul.  However, holding him liable fits within the purpose of s. 86(1) and the manner in which it has been applied.  From a broader policy perspective, it fits within what has been found to be the most efficient and effective risk allocation from both an economic and public safety perspective, two elements that are central to s. 86(1).