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Dear Colleagues

Members of the RDG interested in contribution issues (between tortfeasors on the facts of the case) may wish to read the recent decision of the Ontario Court of Appeal in Renaissance Leisure Group Inc. v. Frazer [URLs for reasons listed below]. Two issues the case deals with, in the context of Ontario's enabling legislation are: (1) how to handle the potential problem of inconsistent judgments where the contribution claim does not have to be litigated as part of the action in which the contribution claimant was sued by and held liable to the injured person; and (2) what to do as between tortfeasors with assets in cases where there are three or more tortfeasors and at least one does not have sufficient assets to pay that tortfeasor's contribution share.

On the first issue, the Court applied a developing Canadian abuse of process doctrine to hold the contribution claimant will not be awarded contribution in an amount or on a basis that is inconsistent with the findings in the underlying damages action. Resort to that doctrine was necessary because neither of res judicata or issue estoppel applied. At least one aspect of the decision in the subsequent contribution action was: the contribution claimant's percentage of fault was lower than the percentage assigned to it in the prior damages action. The contribution defendant had not been sued in the prior action for damages or contribution. It is likely, but not necessarily the case, that the percentage of fault attributed to him in the subsequent contribution action was higher than the percentage that would have been attributed to him had he been sued in the damages action. In the end result, the Court of Appeal reduced the contribution award to an amount which it held was consistent with the findings made in the first action.

On the second issue, the Court held that the Ontario legislation, because the contribution formula refers to degrees of fault or negligence, does not permit an impecuniosity based reapportionment which produces a contribution award greater than what would be the case if it were based only on the contribution defendant's percentage of fault. This was another reason why the contribution award was reduced.

There are other aspects of the decision - including the creation of a difference in the principles which determine the amount of potential contribution liability depending on whether the claim is in respect of contribution liability or judgment liability - which are likely restricted to the few Canadian jurisdictions which have enacted a form of Ontario's separate provision for contribution in respect of settlements.

The Court of Appeal's reasons in Renaissance are available at:
http://www.canlii.org/on/cas/onca/2004/2004onca11293.html
http://www.ontariocourts.on.ca/decisions/2004/august/C36137.htm
http://www.ontariocourts.on.ca/decisions/2004/august/C36137.pdf

The trial decision in Renaissance is reported at (2001) 197 DLR (4th) 336 and also in the Nexis-QuickLaw and Westlaw-Carswell Canadian caselaw databases for those who have access.

David Cheifetz
Bennett Best Burn LLP
Toronto Canada
416-362-3400