The British Columbia Supreme Court in Marelj v. Gosselin (S.C., Wong J., 2001 B.C.S.C. 1491, Doc. B992518, October 25, 2001) has held that, notwithstanding the expiry of a limitation date for adding a municipality as a defendant, the municipality can be brought into the action as a third party by a defendant claiming contribution and indemnity.
The Municipality applied to set aside the Third Party Notice, arguing that there must be liability as between it, as a third party, and the plaintiff in order for the Third Party Notice to stand.
The Municipality relied upon Cook v. Teh (1988), 28 B.C.L.R. (2d) 300 (S.C.), an action for personal injury arising out of a motor vehicle accident. At trial, the defendant driver was held to be 70% liable, the plaintiff 20% liable and the third party municipality 10% liable. The plaintiff’s claim against the municipality was statute-barred and the Court held that since the municipality was not liable to the plaintiff, the defendant driver could not recover contribution from it.
The Owner argued that Cook v. Teh is answered by Tucker (Public Trustee of ) v. Asleson(1993),102 D.L.R. (4th) 518 (B.C.C.A.), which stands for the proposition that s. 4 of the Negligence Act, Chap. 333. R.S.B.C. 1996, provides a joint concurrent tortfeasor with the right to claim contribution and indemnity from another tortfeasor. Further, the right to claim contribution and indemnity is independent of the plaintiff’s action vis-à-vis that other tortfeasor.
Secondly, the Owner argued that the cases upon which the Court in Cook v. Teh relied did not support the conclusion reached. The Court had relied upon the following three cases:
1. County of Parkland No. 31 v. Stetar et al, [1975] 2 W.W.R. 441 (S.C.C.);
2. Westcoast Transmission Co. v. Interprov. Steel & Pipe Corp (1985), 60 B.C.L.R. 368 (S.C.); and
3. Giffels Assoc. Ltd. v. Eastern Const. Co., [1978] 84 D.L.R. (3d) 344 (S.C.C.).
The Owner argued that the Parkland decision had no application in British Columbia. In Parkland, the plaintiffs sought to recover 100% of their damages from the defendant driver, even though he was only 75% responsible for the accident while an immune tortfeasor, the County, was 25% responsible. The County had become immune because the plaintiffs were statute barred from proceeding against it. The Supreme Court of Canada held that the plaintiffs could recover 100% of their damages from the defendant driver and that the defendant driver could not, pursuant to the Tort-Feasors Act of Alberta, claim for contribution against the County. The Owner argued that Parkland is distinguishable in that “liability” is the criterion for contribution under the Tort-Feasors Act of Alberta whereas mere “fault” is the criterion for contribution under the Negligence Act of British Columbia. Accordingly, the Court in Cook v. Teh should not have relied upon the Parkland case.
The Owner further argued that Westcoast supports the opposite conclusion to that which was reached in Cook v. Teh. Westcoast was an action for property damage. The defendant manufacturer had provided pipe for a pipeline operated by the plaintiff. The defendant inspector had been retained by the plaintiff to inspect the pipeline. The plaintiff sued both parties for damages arising out of a pipe failure. A settlement was reached with the defendant inspector and the plaintiff released it from all claims. However, the defendant manufacturer then commenced third party proceedings against the defendant inspector seeking contribution and indemnity. The Court held that if the plaintiff were not at fault and the loss were found to have been caused by the separate faults of the manufacturer and the inspector, then s. 4 of the Negligence Act would apply. The Court further held that a claim for contribution or indemnity by the defendant manufacturer against the defendant inspector could only stand if the plaintiff recovered against the defendant manufacturer for the whole amount of the loss. That was not the case in Westcoast, as the plaintiff in that case could only seek from the defendant manufacturer damages attributable to the fault of the defendant manufacturer.
The Owner in the Marelj case argued that the plaintiff could go after the Owner for the whole amount of the loss. Accordingly, Westcoast does not support the finding made in Cook v. Teh and, in fact, supports the proposition that s. 4 of the Negligence Act gives rise to a claim for contribution or indemnity in a case such as Marelj, where the plaintiff may seek from one defendant damages attributable to an immune tortfeasor.
The Owner argued that Giffels supports the proposition that a third party notice may be maintained if, at the time of loss, there was potential liability as between the third party and the plaintiff. That would, of course, be contrary to the finding made in Cook v. Teh. Giffels was an action for damages arising out of a defective roof. The plaintiff had commenced an action against the defendant engineer, who had supervised the contract, and the defendant contractor, who had performed the work. The plaintiff had a contract with each of them. The contract between the plaintiff and the defendant contractor, which had been drafted by the defendant engineer, contained a clause by which the plaintiff waived all the rights it had against the defendant contractor after issuance of the final certificate. The loss arose after issuance of the final certificate. The plaintiff was successful against the defendant engineer who was found to be 25% negligent. However, because the loss arose after the issuance of the final certificate, the defendant contractor, who would otherwise have been held to be 75% negligent, was found not liable to the plaintiff. The defendant engineer had third partied the defendant contractor, claiming contribution. Chief Justice Laskin stated, at page 349:
… I am of the view that it is a precondition of the right to resort to contribution that there be liability to the plaintiff. I am unable to appreciate how a claim for contribution can be made under s. 2(1) by one person against another in respect of loss resulting to a third person unless each of the former two came under a liability to the third person to answer for his loss. (emphasis added)
Chief Justice Laskin further stated at page 350:
What we have here is a case where the immunity of Eastern [the contractor] from liability did not arise from some independent transaction or settlement made after an actionable breach of contract or duty, but rather it arose under the very instrument by which Eastern’s relationship with the plaintiff was established. Giffels [the engineer] had no cross-contractual relationship with Eastern upon which to base a claim for contribution; and once it was clear, as it was here, that Eastern could not be held accountable to the plaintiff for the latter’s loss, any ground upon which Giffels could seek to burden Eastern with a share of that loss disappeared. (emphasis added)
The Owner argued that the above two quotes support the proposition that if a third party could potentially be liable to the plaintiff at some point after the damage arose, then a claim for contribution could be made against that third party. Accordingly, Giffels would not support the conclusion reached in Cook v. Teh for, at the time of loss, there was potential liability as between the third party and the plaintiff. The Owner argued that Giffels lends support to a finding, in the Marelj case, that the Third Party Notice could be maintained for, at the time of loss, the Municipality was potentially liable to the plaintiff.
Counsel for the Municipality had also referred the Court to the decision of Orange Julius et al. v. Surrey et al (1998), 53, B.C.L.R. (3d) 142 (B.C.S.C.); (2000) 79 B.C.L.R. (3d) 199 (B.C.C.A.); leave to appeal to the Supreme Court of Canada dismissed. That was an action for damages arising out of a fire at a shopping mall. The tenants commenced an action against multiple defendants for having caused the fire but did not name the landlord as a defendant because it had contractually protected itself from liability to the tenants. The defendants commenced third party proceedings against the landlord. Applying Giffels, the B.C. Court of Appeal held that it is a precondition of the right to resort to contribution that there be liability as between the third party and the plaintiff and, accordingly, struck the Third Party Notice. The Owner distinguished Orange Julius by submitting that, in that case, the immune tortfeasor had, prior to when damages had arisen, protected itself from liability to the plaintiff. That was unlike the Marelj situation in which there was potential liability to the plaintiff, on the part of the Municipality, at the time damages were sustained.
The Owner’s arguments respecting:
· the inapplicability of the S.C.C. decision of Parkland in B.C.;
· the proposition that a claim for contribution can be maintained where there is potential liability to the plaintiff, on the part of the now immune tortfeasor, at the time damages were sustained; and the support for same in the S.C.C. decision of Giffels; and
· the manner in which the decision of Orange Julius may be distinguished
were not addressed by the Court.
Wong J. simply concluded at p. 10:
Although there is presently a conflict in the case law, Tucker has not been overruled on the relevant proposition that it stands for and, in my view, represents the current law of British Columbia…
…
If Tucker is wrong, it will require a five member panel of the Court of Appeal to review that decision. In the meantime this court is bound by the Tucker decision.
The principles set out in Tucker appear to be inconsistent with those found in the S.C.C. decisions in Parkland and, possibly, Giffels, the B.C.C.A. decision in Orange Julius, and the B.C.S.C. decision in Cook v. Teh. Until the B.C. Court of Appeal addresses the issue of whether, in British Columbia, the right to claim contribution and indemnity is conditional upon whether there was potential liability as between a third party and the plaintiff at the time of loss, this area of law will remain uncertain.
