Its common for Insurers to seek contribution from the co-defendants and/or from other parties who may be held jointly and severally liable in any incident. A tortfeasor may recover contribution or indemnity from any other tortfeasor who is or would have been (if brought into a legal action) liable in respect to the damages.
Section 1 of the Negligence Act R.S.O. 1990, c. N.1, states:
Where damages have been caused or contributed to by the fault or neglect of two or more persons, the court shall determine the degree in which each of such persons is at fault or negligent, and, where two or more persons are found at fault or negligent, they are jointly and severally liable to the person suffering loss or damage for such fault or negligence, but as between themselves, in the absence of any contract express or implied, each is liable to make contribution and indemnify each other in the degree in which they are respectively found to be at fault or negligent.
The words “fault or neglect” are critically important in determining liability in in any case. There was a time when fault was considered synonymous with negligence and the negligence act would not have applied to intentional acts/torts [see Hollebone v Barnard, 1954 CanLII 127 (ON SC), 1954].
However, recently courts, in most provinces, have started taking position where tortfeasors committing intentional acts/torts are also held liable for contribution pursuant to the negligence act.
However, referring Sound Stage Entertainment Inc. v Burns, 2019, a recent interesting decision by the Court of Appeal for Saskatchewan, some serious concerns may have been raised for insurers seeking contribution or indemnity from the tortfeasors committing intentional act(s) in Saskatchewan.
Jordan Burns and Sarain Stoney were at a Regina nightclub owned/operated by Sound Stage Entertainment Inc. [Sound Stage] and The Pump Roadhouse [the Pump] when on the evening of April 29, 2016, both were shot and injured by Omar Abdi Hakim Haji-Hussein. Mr. Haji-Hussein was arrested and charged with numerous criminal offences arising from the incident. The charges included the attempted murder of both Mr. Burns and Mr. Stoney.
In June of 2016, Mr. Burns and Mr. Stoney each commenced an action against Sound Stage and the Pump, a sole proprietorship involved in the ownership or operation of the nightclub. They alleged Sound Stage and the Pump had been negligent because they had created a dangerous and hazardous environment by failing to put in place adequate and appropriate security measures.
Sound Stage and the Pump filed statements of defence and each took the position that, if there had been a shooting, it was not because of their negligent acts. They denied owing a duty of care to Mr. Burns and Mr. Stoney and asserted that, even if they did owe such a duty, it had been fulfilled. There was no allegation that either Mr. Burns or Mr. Stoney had been contributorily negligent.
THIRD PARTY ACTION – THE CHAMBER’S DECISION
Sound Stage and the Pump each brought an application to add Mr. Haji-Hussein as a third party defendant. Their notices of third party claim alleged Mr. Haji-Hussein had entered the Pump without their knowledge and with the specific intent to cause harm to Mr. Stoney at least. The notices further alleged that the shootings of Mr. Burns and Mr. Stoney were intentional acts, such that Sound Stage and the Pump were entitled to contribution and indemnity in relation to any losses suffered by Mr. Burns and Mr. Stoney. The notices did not allege negligence on the part of Mr. Haji-Hussein.
Mr. Burns and Mr. Stoney opposed the application to add Mr. Haji-Hussein as a third party. Mr. Haji-Hussein did not appear and took no position on the application.
A Queen’s Bench Chambers judge dismissed their applications relying upon Chernesky v Armadale Publishers Limited, 1974 CanLII 984 (SK CA).
Both Sound Stage and the Pump appealed to the reaction of their applications to third party Mr. Haji-Hussein.
THE POSITION ON APPEAL
They argued Chernesky does not apply to their situation because, although their proposed third party claims are grounded on an intentional tort, they themselves were sued in negligence.
A tortfeasor may recover contribution or indemnity from any other tortfeasor who is, or would if sued have been, liable in respect of the damage to any person suffering damage as a result of a tort by settling with the person suffering the damage, and thereafter commencing or continuing action against the other tortfeasor, and in such event the tortfeasor who settled the damage shall satisfy the court that the amount of the settlement was reasonable, and if the court finds that the amount of the settlement was excessive it may fix the amount at which the claim should have been settled.
Further, Section 3 has similar wordings as appearing in Section 1 of the Negligence Act R.S.O. 1990, c. N.1, except that Section 3 only talks about fault while the latter talks about fault or neglect. The wordings for section 3(1) are reproduced hereunder:
Where damage or loss has been caused by the fault of two or more persons, the court shall determine the degree in which each person was at fault.
Rejecting the appeal, Richard C.J.S., writing for the majority, stated:
I agree with Sound Stage and the Pump that this case does not raise precisely the same issue as the one considered in Chernesky. They have been sued in negligence; Armadale, the defendant in Chernesky, was sued for libel. Nonetheless, as in Chernesky, the root question here is whether s. 3 of the Act displaces the no-contribution-among-tortfeasors rule only in respect of negligence or whether it displaces it more broadly.
As explained above, I conclude the word “fault” in s. 3 refers only to negligence. It follows that this appeal must be dismissed.
Jackson J.A. dissenting and allowing the appeal, stated:
In light of the evolution of the law since 1974, when Chernesky was decided, and the commentary in relation to it, I would not ground the dismissal of the appeal before us on Chernesky. Instead, with much respect for those who hold a contrary view, this appeal should be decided on the basis of the interpretation of the Act as influenced by the evolving view of fault as reflected in the balance of the common law jurisdictions in Canada.
Surprising decision, least to say. The Insurers must be cautious in dealing with such claims in Saskatchewan. My opinion is that this decision may be overturned in future. I personally disagree with the decision. But for now, it appears the insurers may not be able to third party a tortfeasor for intentional acts. It may be wise to allege negligence rather than intentional torts if such a situation arises.