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Supreme Court of Canada

Negligence—Motor vehicles—Respondent taxi driver struck while on duty by appellant’s negligently-driven car during course of authorized test-drive by employee of garage repairing it—Respondent’s action against the driver barred by legislation—Driver deemed to be agent or employee of car owner—Whether or not action against car owner similarly barred—Workers’ Compensation Act, 1968 (B.C.), c. 59, s. 10(1),—Motor-vehicle Act, R.S.B.C 1960, c. 253, s. 70(1).

The issue in this appeal was whether an owner of an automobile, who was by statute put into a master-servant relationship with a driver, was liable for personal injuries sustained by the driver of another car by reason of the negligence of the owner’s driver when both drivers and the negligent driver’s regular employee were under the Workers’ Compensation Act. Gibb, a taxi driver, sustained personal injuries as a result of a collision with Schroeder’s car which was being negligently test-driven by Munro, an employee of the garage repairing the car. On Gibb’s suit for damages against the appellant Schroeder as well as against Munro, the issue arose for preliminary determination and both lower Courts held that, having regard to s. 70(1) of the Motor-vehicle Act, her action against the appellant was not precluded by s. 10(1) of the Workers’ Compensation Act so as to remit her to compensation only.

Held: The appeal should be dismissed.

Section 10(1) of the Workers’ Compensation Act displaced in favour of compensation any rights and rights of action to which a worker would be entitled against that worker’s employer or against any employer within the scope of the compensation provisions of the Act or against any worker in respect of personal injury. Appellant was neither Gibb’s employer nor an employer under the relevant part of the Act. Section 70(1) of the Motor-vehicle Act deemed Munro to be an agent or

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servant of appellant Schroeder as owner of the car which Munro drove with her consent, and also deemed Munro to have been driving it in the course of his employment. Appellant, therefore, was in the position of an employer who came under vicarious liability for Munro’s negligence but was clearly outside the terms of the Workers’ Compensation Act. As a person clearly excluded from s. 10(1), appellant could not properly be included with a view to allowing her to escape liability through court action and to require the plaintiff to seek compensation instead.

Appellant could not avoid liability and fasten on the immunity of her deemed employee from Gibb’s suit ostensibly because her liability was vicarious. The tort committed did not disappear and relief against it took various forms. As against the negligent Munro, it lay in compensation; as against the appellant, it lay in court action.

Co-Operators Insurance Association v. Kearney, [1965] S.C.R. 106; Harrison v. Toronto Motor Car Limited and Krug, [1945] O.R. 1, referred to.

APPEAL from a judgment of the Court of Appeal for British Columbia[1], dismissing the appellant’s appeal from the judgment of the British Columbia Supreme Court not to preclude respondent’s action. Appeal dismissed.

Terrence L. Robertson and Bruce Laughton, for the defendants, appellants.

R.C. Brun, for the plaintiff, respondent.

The judgment of the Court was delivered by

THE CHIEF JUSTICE—The issue in this appeal, which is here by leave of this Court, is whether an owner of an automobile, who is by statute put into a master-servant relationship with a driver, is liable for damages for personal injuries sustained by the driver of another car by reason of the negligence of the owner’s driver when both drivers and the negligent driver’s regular employer are under the Workers’ Compensation Act 1968 (B.C.), c. 59 as amended, but the statutory master is not.

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The appellant Susie Schroeder was the owner of an automobile which was test-driven by Donald Munro, an employee of a garage to which the appellant had taken it for repairs. The respondent, Patricia Gibb, was a taxi driver who sustained personal injuries as a result of a collision caused by the negligent driving of Munro. On her suit for damages against the appellant (as well as against Munro) an issue arose for preliminary determination as to whether, having regard to s. 70(1) of the Motor-vehicle Act, R.S.B.C. 1960, c. 253, her action against the appellant was precluded by s. 10(1) of the Workers’ Compensation Act, 1968 (B.C.), c. 59, as amended by 1974 (B.C.), c. 101, s. 11, so as to remit her to compensation only. Trainor J. of the British Columbia Supreme Court and the British Columbia Court of Appeal both held that her action was not so precluded. In my opinion, they were correct in so holding.

Section 70(1) of the Motor-vehicle Act and s. 10(1) of the Workers’ Compensation Act read respectively as follows:

70. (1) In an action for the recovery of loss or damage sustained by any person by reason of a motor-vehicle on any highway, every person driving or operating the motor‑vehicle who is living with and as a member of the family of the owner of the motor‑vehicle, and every person driving or operating the motor-vehicle who acquired possession of it with the consent, express or implied, of the owner of the motor-vehicle, shall be deemed to be the agent or servant of that owner and to be employed as such, and shall be deemed to be driving an operating the motor-vehicle in the course of his employment; but nothing in this section relieves any person deemed to be the agent or servant of the owner and to be driving or operating the motor-vehicle in the course of his employment from the liability for such loss or damage.

10. (1) The provisions of this Part are in lieu of any right and rights of action, statutory or otherwise, founded on a breach of duty or care or any other cause of action, whether that duty or cause of action is imposed by or arises by reason of law or contract, express or implied, to which a worker, dependent, or member of the family of the worker is or may be entitled against the employer of the worker, or against any employer within the scope of this Part, or against any worker, in respect of any personal injury, disablement, or death arising out

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of and in the course of employment and no action in respect thereof lies. This provision applies only when the action or conduct of the employer, his servant or agent, or the worker, which caused the breach of duty arose out of and in the course of employment within the scope of this Part.

The argument on the appeal was largely devoted by both parties to a close examination of the judgment of this Court in Co-Operators Insurance Association v. Kearney[2] and to the lines of authority, English as well as Canadian, canvassed in that case. It concerned “gratuitous passenger” legislation which at the time denied recovery for damages against the owner of an automobile or its driver for personal injuries suffered by a gratuitous passenger in the vehicle. In the Kearney case, the plaintiff, an insurance agent, who solicited insurance and provided policyholder service on behalf of the appellant, was injured in a collision with a train while riding as a passenger in a car of the appellant which, with its consent, was driven at the time by an adjuster. Liability was imposed on the appellant on the finding that the accident was caused solely by the negligence of the driver-adjuster, notwithstanding that under s. 105(2) of The Highway Traffic Act there was to be no liability towards a gratuitous passenger. The judgment at trial was affirmed by the Ontario Court of Appeal and by a majority in this Court. There were concurrent findings below that the plaintiff was a servant of the appellant in the particular situation and that the driver was a fellow servant and, like the plaintiff, in the course of employment.

Although liability which would otherwise, on the facts, be upon an owner under s. 105(1) of the Ontario Act was precluded in the case of a gratuitous passenger, the Courts below fixed liability upon the appellant as master or employer following Harrison v. Toronto Motor Car Limited and Krug[3]. In this Court, Judson J. who joined with Spence J. (Taschereau C.J.C. concurring with Spence J.) in dismissing the appeal, put his position solely on the Harrison case. Spence J. took a more detailed view of the Harrison case, putting it

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on the ground that an employer was under a duty to take reasonable care for the safety of his servants and held that there was a breach of that duty by reason of the driver’s negligence. Moreover, he held that s. 105(2) did not dissolve the negligence of the driver, which remained a wrongful act although action upon it against the appellant as owner and against the driver was barred.

Cartwright J. who, along with Ritchie J., dissented in the Kearney case did so because he concluded that the statute under consideration provided not merely a personal or a procedural bar but took away a gratuitous passenger’s right of action founded upon the driver’s negligence. Hence, for him, the Harrison case was wrongly decided. Counsel for the appellant in the present case founded himself mainly on the dissenting opinion of Ritchie J. who accepted the Harrison case as turning on a personal duty of the owner as employer to the injured servant. However, in his view, there was on the facts no such personal duty of care upon the appellant in the Kearney case. Moreover, he construed s. 105(2) of The Highway Traffic Act as immunizing the negligent driver from liability and, consequently, as relieving the owner employer as well where it was sought to hold him as being vicariously liable.

We are not required in this case to re-examine the Harrison case or to decide whether Spence J. or Ritchie J. took the correct view, on the facts and in law, of s. 105(2) of the Ontario Highway Traffic Act. I have no difficulty in agreeing with Ritchie J. that an employer’s liability is vicarious only where it is based on the negligence of an employee who was then acting within the scope of his employment. At the same time, there is no doubt that an employer may come under a personal liability towards an employee, as where the employer fails in a duty to provide safe working conditions. If that be so, as Spence J. appears to have held in the Kearney case, then clearly

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s. 105(2) would not provide a shield against employer liability.

The considerations in the Kearney case can only have peripheral or tangential relevance for the present case. I say this because, in my view, the very terms of s. 10(1) of the Workers’ Compensation Act show that the appellant Susie Schroeder does not come under its umbrella. Section 10(1) displaces in favour of compensation any rights and rights of action to which a worker may be entitled against that worker’s employer or against any employer within the scope of the compensation provisions of the Act or against any worker in respect of personal injury. The appellant is not an employer of Patricia Gibb nor is she an employer under the relevant part of the Act. The effect of s. 70(1) of the Motor-vehicle Act is to deem Munro to be an agent or servant of the appellant as owner of the car which Munro drove with her consent and also to deem him to have been driving it in the course of his employment. This no doubt puts the appellant in the position of an employer who comes under vicarious liability for the negligence of Munro but it does not per se make the appellant an employer within s. 10(1) of the Workers’ Compensation Act. She is plainly outside the terms of s. 10(1), and I am unable to see how she can properly be included with a view to allowing her to escape liability through Court action and to require the plaintiff to seek compensation instead.

The appellant seeks relief from this consequence by fastening on the immunity of the driver Munro from suit by the injured Patricia Gibb. The contention is that since both drivers are employees under the Workers’ Compensation Act, compensation thereunder is the only relief. From this it is argued that the appellant’s liability here is vacarious only and that she cannot, therefore, be sued when her deemed servant cannot be sued. The answer to this is clear enough. The tort committed by Munro does not disappear. Relief against it takes different forms. As against the negligent driver Munro, it lies in compensation; as against the appellant, it lies in court action. It is only court action against the appellant that is pursued here,

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and we are not concerned with possibly conflicting claims for compensation and for damages.

I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the defendants, appellants: Rankin, Robertson, Giusti & Donald, Vancouver.

Solicitor for the plaintiff, respondent: R.C. Brun, Vancouver.

 



[1] (1979), 106 D.L.R. (3d) 73.

[2] [1965] S.C.R. 106.

[3] [1945] O.R. 1.

 

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