Date: Fri, 21 Oct 2005 11:59:42 -0400

From: David Cheifetz

Subject: Two employers vicarious liability apportionment contribution

The Supreme Court of Canada has just released its decision in Blackwater v. Plint, 2005 SCC 58.

Blackwater is an action by students at an Indian (Native Canadian) residential school against the Canadian gov't and the United Church arising out of sexual and other abuse. The issues include vicarious liability in the "two employer" situation, delegable and non-delegable duty, fiduciary duty, charitable immunity, contribution between wrongdoers at common law if contribution is not available under statute, and apportionment as between wrongdoers held liable on solely on the basis of vicarious liability.

Both the Church and Canada were held liable at trial, solely on the basis of vicarious liability. The judge apportioned fault 75% to Canada, 25% to the Church. The British Columbia Court of Appeal set aside the judgment against the Church. The SCC restored the trial judgment.

On the last issue, the court held that there can be an unequal apportionment of fault, for contribution purposes, even where liability is entirely vicarious so without fault - see para. 64-73. Essentially, SCC held that Canada was the senior supervisor and therefore should shoulder more of the blame. The court wrote, at para 69: "It follows that the degree of fault may vary depending on the level of supervision. Parties may be more or less vicariously liable for an offence, depending on their level of supervision and direct contact."

It did not accept the argument (unlike the UK CA in Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd & Ors [2005] EWCA Civ 1151 (10 October 2005) that apportionment between wrongdoers held liable solely on the basis of vicarious liability must be equal. There is no discussion of English case law on that issue; or other UK caselaw where analogous issues arise, such as apportionment where one defendant is held liable on the basis of strict liability and another fault.

It isn't at all clear that the panel saw that the greater the blameworthiness one assigns to one of the wrongdoers, the more those factors support the argument that that wrongdoer was personally at fault, not just vicariously liable. For example, the court also wrote, at para 71: "Here the trial judge found that Canada was in a better position than the Church to supervise the situation and prevent the loss." That implies that the SCC accepted that the failure to act was causative conduct but not negligent causative conduct. By definition, that "failure" can not have been negligent, or else Canada would have been held directly at fault and liable. So, we have to ask ourselves where the threshold is between blameworthy causative conduct sufficient to amount to negligence and trigger direct liability to the injured person and blameworthy causative conduct "only" sufficient to trigger unequal apportionment for contribution purposes.

Blackwater v Plint is another step along common law Canada's path of converting the apportionment by "degrees of fault" formula to something equivalent to the "just and equitable" formula. In this respect, it might be relevant that the SCC cited Gerling Global v Siskind Cromarty 2004 CanLII 4856 (Ont SCJ) as one of the cases that, for Canada, support the argument that "fault" in the apportionment statutes extends beyond negligence. In Gerling Global, at para. 273, the trial judge held that had she found the wrongdoer to have acted intentionally, she would not have reduced the claim on account of the plaintiff's own carelessness. The trial judge wrote:

[273] If this Court had been satisfied on the evidence that the Plaintiff had proven fraud and/or deceit, that conclusion would have involved a determination that the Lawyer had conducted himself in a morally reprehensible manner. If that had been proven, the seriousness of the insurer’s fault (mistake) would have been eclipsed by the seriousness of the defendant’s fault. The relative gravity and degrees of fault involved, i.e., fraud vs. mistake, would have prompted me to refuse to make an apportionment order having the effect of relieving the defendant from the consequences of deliberate falsehood.

Assuming the Ontario apportionment legislation would have applied, there is nothing in the legislation (apportionment is on the basis of degrees of fault or negligence) - that permits the judge to refuse to apportion on what amounts to moral disapproval.

David Cheifetz
Bennett Best Burn LLP
Toronto, Canada

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