Canada: Lessors Beware: Vicarious Liability And The Workplace Safety And Insurance Act

Introduction

In Maria-Antony v. Selliah, 2014 ONSC 4264 ("Selliah"), the Ontario Superior Court dealt with the issue of whether a plaintiff may claim against the lessor of a vehicle for its vicarious liability of the driver, where the plaintiff's right of action has been removed against the driver pursuant to section 28 of the Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sched. A ("WSIA"). 

The issue was addressed on a summary judgment motion. Justice O'Marra dismissed the motion and held that a plaintiff's limited right of action in these circumstances included a claim for damages arising out of the lessor's vicarious liability.¹ Unfortunately, the Divisional Court dismissed the lessor's appeal and decided to "say nothing" about Justice O'Marra's analysis.²

Six years later, the Ontario Courts still have not commented on Justice' O'Marra's determination.

Vicarious Liability of a Lessor and the Workplace Safety and Insurance Act

Section 28(1) of the WSIA bars the right of action of a Schedule 1 worker against another Schedule 1 entity, including an employer or worker, for any claims pertaining to the worker's injury. However, section 28(4) of the WSIA serves as an exception, stating that subsection (1) does not apply "if any employer other than the worker's employer supplied a motor vehicle, machinery or equipment on a purchase or rental basis without also supplying workers to operate the motor vehicle, machinery or equipment." In this regard, s. 28(4) creates a category of "unprotected defendants" that remain open to suit even if the plaintiff's right of action has been barred against other tortfeasors.

In the context of a motor vehicle accident, plaintiffs are frequently barred against suing another driver where they were both employed by Schedule 1 employers and were in the course of their employment at the time of the accident. However, due to section 28(4) of the WSIA, a lessor who owned the vehicle involved in the accident is often not protected by the WSIA. This is because, often times, the lessor is an employer who supplied the motor vehicle but did not supply any workers to operate it. 

As owner of the vehicle, a lessor is vicariously liable for the driver pursuant to the Highway Traffic Act, R.S.O. 1990, c. H.8 ("HTA").³ Thus, if the driver is a Schedule 1 worker, then the plaintiff will still have a claim against the lessor for the negligence of the driver. 

Yet, the WSIA also contains sections 29(3) and (4) which require the court to "determine what portion of the loss or damage was caused by the fault or negligence of the employer, director, executive officer or other worker, whether or not he, she or it is a party to the action."⁴ Likewise, "no damages, contribution or indemnity for the amount determined under subsection (3) to be caused by a person described in that subsection is recoverable in an action."⁵

At first glance, it appears that the WSIA negates any damages for which a protected employer and/or worker may be held responsible for, regardless of whether another defendant may also be held liable for those same damages - such as by joint liability or vicarious liability. In this regard, although the lessor is vicariously liable for the driver under the HTA, the plaintiff would only be awarded damages against the lessor if the lessor was personally liable in some way.

Or so it would seem.

Maria-Antony v. Selliah, 2014 ONSC 4264

In Maria-Antony v. Selliah, 2014 ONSC 4264 ("Selliah"), the Ontario Superior Court of Justice dealt with a summary judgment motion brought by the owner/lessor of a truck involved in an accident. The plaintiff's right of action was previously barred against his employer and the defendant driver by the WSIAT under s. 28 of the WSIA. The plaintiff's right of action against the owner/lessor of the truck, however, was not barred due to the exception in s. 28(4).

In the WSIAT decision, the Tribunal described the plaintiff's right of action against the lessor as "limited". Justice O'Marra was thus required to determine what exactly was meant by the word "limited".⁶ To this, Justice O'Marra examined the WSIA, including subsections 29(3) and (4), and held that the lessor's vicarious liability remained valid. He states: "where the legislature intends to remove or restrict a right, such as confining liability to personal negligence and to exclude vicarious liability, 'the Legislature knows how to do it.' To remove a right it must do so in clear and unambiguous term."⁷ Further, and perhaps more importantly, Justice O'Marra held that "the limited right of action cited by the Appeals Tribunal includes actions based on vicarious liability."⁸

The decision was appealed to the Divisional Court who decided to "say nothing" about Justice O'Marra's analysis on vicarious liability.⁹ The Divisional Court dismissed the appeal and left the issue to be determined at trial.

The Ontario Courts have not dealt with this issue since Selliah. However, the decision has been subsequently referred to by the WSIAT twice and the FSCO once.

First, in Decision No. 1086/15, 2015 ONWSIAT 2107, Honda Leasing Inc. had leased a motor vehicle to Kelsey's Restaurant for its use by a General Manager. The plaintiff was an employee of Kelsey's Restaurant and was injured in an accident while the General Manager was driving. The WSIAT held that the right to sue against the General Manager and Kelsey's Restaurant was taken away, but not against Honda Leasing Inc. In coming to their decision, the WSIAT cited Selliah, stating that the plaintiff may have a claim against the lessor for its vicarious liability, in addition to any personal liability.¹⁰

Second, in Decision No. 1307/13R, 2015 ONWSIAT 2954, the WSIAT had ignored the application of s. 28(4) in their initial decision but granted leave for reconsideration. In the reconsideration decision, the parties referred to Selliah in there submissions, but the WSIAT ultimately held that "while this judgement may or may not be relevant in considering the substantive merits of the respondents' reconsideration request, it is not relevant to the issue of whether the threshold test has been met."¹¹ Accordingly, the WSIAT did not rely Selliah in coming to their final determination. Moreover, as described in the reconsideration decision, the parties ultimately accepted that the owner/lessor falls under the exception found in section 28(4) of the WSIA, but would also qualify for protection under section 29(4) of the WSIA.¹² No comment is made as to whether that protection removes any damages attributable to the lessor's vicarious liability.

Last, in Ponniah v. Northbridge General Insurance Corp., FSCO A16-003255 (May 17, 2017), the FSCO considered the Selliah decision in the context of an Application to bar the claimant's accident benefits claim under the WSIA. In considering the legitimacy of the claimant's tort claim against the defendant lessor, the FSCO cites Selliah, stating that the lessor/owner of a vehicle may still be held vicariously liable to the driver, despite that the right of action has been removed against the driver.¹³

Conclusion

Unfortunately, the Divisional Court did not take the opportunity to clarify this issue of law. As a result, we are left to interpret the language of sections 29(3) and (4) of the WSIA and place our own precedential value on Justice O'Marra's decision. 

On one hand, sections 29(3) and (4) of the WSIA appear to be clear in their language. That is, no damages arising out of a protected driver's negligence may be recoverable in court. As a result, the limited right of action against a lessor will be restricted to any damages arising out of its own personal negligence. On the other hand, Justice O'Marra is fairly explicit with his determination and reasoning. Perhaps if the legislatures did indeed intend to negate any damages arising out of a lessor's vicarious liability, then they would have done so in more unambiguous language. 

Alas, a Rule 21 motion could be exactly what the Courts need to finalize this issue of law. After all, it is presumably in the best interests of a lessor to determine where its exposure stands. That is, unless Justice O'Marra's conclusion in Selliah is upheld.

Footnotes

1.  Maria-Antony v. Selliah, 2014 ONSC 4264, at para. 35.

2.  Maria-Antony v. Selliah, 2015 ONSC 2951, at para. 2.

3.  Highway Traffic Act, R.S.O. 1990, c. H.8, s. 192.

4.  Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sched. A, s. 29(3).

5.  Ibid, s. 29(4).

6.  Maria-Antony v. Selliah, 2014 ONSC 4264, at para. 6.

7.  Ibid, at para. 32.

8.  Ibid, at para. 35

9.  Maria-Antony v. Selliah, 2015 ONSC 2951, at para. 2.

10.  Decision No. 1086/15, 2015 ONWSIAT 2107, at para. 21-25.

11.  Decision No. 1307/13R, 2015 ONWSIAT 2954, at para. 75.

12.  Decision No. 1307/13R2, 2017 ONWSIAT 244, at para. 13.

13.  Ponniah v. Northbridge General Insurance Corp., FSCO A16-003255 (May 17, 2017), at para. 43.

Originally Published by Canadian Defence Lawyer, Hearsay Newsletter.

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