Date: Tue, 13 Sep 2005 09:57:33 -0400

From: David Cheifetz

Subject: 2 contribution cases

Andrew,

Thank you for the heads-up.

Many appellate and trial judges appear to have an ongoing problem with contribution cases; even the most straight-forward, assuming any fit that description. As good an explanation for the problem is this very pithy, two decades old statement. "Contribution is a simple concept but a complicated business" in P. Kutner, "Contribution Among Tortfeasors: Liability Issues in Contribution Law" (1985), 63 Can. Bar Rev. 1 at 58.

There's about 4 decades worth of Ontario appellate authority that the limitation period for contribution claims starts (because that's when the cause of action arises) when the wrongdoer settles with the injured person or is held liable by a judgment. However, a recent Ontario statute has broken the link between the coming into existence of the cause of action and the limitation period. The legislation now, on its face, states that the limitation period starts to run at the earlier of the "ought to know" the contribution claim exists date or the date upon which the defendant is served with the plaintiff's document commencing the action. The latter alternative is absolute - so it doesn't matter that the defendant hasn't the slightest idea of the existence of a potential contribution claim against another wrongdoer. The result is that, giving the provision the [English] meaning its words actually have, the limitation period may expire before the cause of action arises and before the defendant knows of the existence of the cause of action.

I've a standing (very small) "yes" bet on the odds that that section will be applied for what it says literally.

On the relevance of non-causative factors to the apportionment of the extent of the obligation to pay as among the wrongdoers eligible to pay - note I've said the extent of the obligation to pay, not the relative proportions of fault - well ... if, as the House of Lords said in Dubai Aluminium, the impecuniosity of one of the concurrent tortfeasors is relevant, then that's the *precedential* ultimate authority that non-causative factors are relevant to the "just and equitable having regard to the extent of that person's responsibility for the damage" English statute formulation, notwithstanding that "extent of responsibility" qualification and the "causative potency" gloss could be seen to mean otherwise.

And, regardless of the questionable logical validity.

As those of you who are familiar with Canadian common law on the issue know, "blameworthiness", here - both for statutes that use the English "just and equitable" model and the Ontario "degrees of fault or negligence" model - has been held to be limited to causative factors, only. See, Renaissance Leisure Group Inc. v. Frazer (2004), 242 D.L.R. (4th) 229; 2004 CanLII 21044 (ON CA), particularly paragraphs 50-52. The non-causative factor in Renaissance was impecuniosity.

Of course, if the Ont CA had paid a bit more attention to the crux of my analysis - I concede it's a long article but I did provide a table of contents and bold headings and the relevant portion isn't that long - not just what it wanted to pay attention to, the result of Renaissance should (I'd like to say would but I'm not that optimistic) have been different. That, however, is the proverbial horse of a different colour.

Regards,

David Cheifetz
Bennett Best Burn LLP

----- Original Message -----
From: Andrew Tettenborn
Sent: Tuesday, September 13, 2005 8:44 AM
Subject: ODG: 2 contribution cases

To end the summer, a couple of interesting English cases re contribution between wrongdoers.

First, for those who haven't spotted it, a welcome decision preserving the width of the statutory right to contribution. Contrary to what was often assumed, you don't need a payment in cash by D1 to C to trigger a right to contribution against D2.

In Baker v Wilks [2005] 3 All ER 603 defects appeared in a block of housing association flats. For the sake of argument, the court assumed the defects were the fault of both the builder and the consulting engineers. The builder settled with the owners on the basis that it would remedy the defects free of charge. Did it have a right to contribution from the engineers? Yes: the fact that no cash had been paid to the owners was irrelevant, at least where what the builder had done was capable of money valuation. There was also a limitation point: time, it was held, ran in such a case from the time of the agreement to settle.

This seems obviously sound. No doubt it can be extended. For example, suppose a debtor has a right to set off the same liability against 2 different creditors, C1 and C2. If he sets it off against a demand by C1, there now seems little objection to C1 claiming contribution against C2: C1 may not have paid the liability in cash, but he has done the next best thing.

Secondly, something more controversial. In Brian Warwicker Partnership plc v HOK International Ltd [2005] EWCA Civ 962 commercial premises were misdesigned so as to be a wind-tunnel and hence tenant-unfriendly. This was partly the fault of the architects & partly that of the consulting engineers. Having shelled out to the owners for the cost of correction, the engineers claimed contribution from the architects. In apportioning the loss between the two defendants, the judge took account of certain acts of negligence by the architects that were non-causative of the owners' loss and used them to increase the share the architects had to pay. The CA said this was unexceptionable, affirming an earlier case where this had been done. The argument was that relative responsibility wasn't the sole criterion on apportionment under the relevant legislation (the Civil Liability (Contribution) Act 1978), and that it was just and equitable that all fault should be in account.

To me, this proposition seems a tad iffy. If you can't be sued directly for non-causative negligence, it seems a bit curious - perhaps even unjust and inequitable - to take it into account indirectly in contribution proceedings. Warwicker also creates a potential mismatch with the Law Reform (Contributory Neg) Act 1945, where - even though the wording of the relevant apportionment provision is similar to that under the 1978 Act - it's long been accepted that only causative negligence by the claimant is relevant to the apportionment exercise.

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