Brink’s Express Co. of Canada Ltd. v. Plaisance et al., [1977] 1 SCR 640

Supreme Court of Canada

Brink’s Express Co. of Canada Ltd. v. Plaisance et al., [1977] 1 S.C.R. 640

Date: 1975-10-07

Brink’s Express Co. of Canada Ltd. Appellant;

and

Claude Plaisance

and

The City of Montreal Respondents.

1975: June 15; 1975: October 7.

Present: Laskin C.J. and Judson, Pigeon, Beetz and de Grandpré JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Workmen’s compensation—Employee’s claim against a third person for surplus—Liability shared between the third person and the employer—Absence of joint and several liability—Precedence of the subrogating party over the subrogated party—Workmen’s Compensation Act, R.S.Q. 1964, c. 159, ss. 7 and 8—Civil Code, arts. 1103, 1106 and 1157.

Respondent Plaisance, a fireman in the employ of respondent, the City of Montreal, was injured in a collision between the van in which he was a passenger and a truck belonging to appellant. He chose the compensation provided in the Workmen’s Compensation Act (a sum which the parties agreed should be slightly larger than $25,000) and claimed from appellant, pursuant to the said Act, the additional sum required to constitute an indemnification proportionate to the loss sustained. The Superior Court ruled that this sum was $25,200 and that Plaisance was entitled to the total of this amount notwithstanding the fact that appellant’s and respondent’s drivers were equally liable. Only one question was raised in the Court of Appeal: considering the equal division of fault, should appellant be ordered to pay respondent only half the additional damages of $25,200? While ruling that appellant could only be required to pay damages proportionate to its fault, the Court of Appeal maintained the order at $25,200 on the grounds that this sum represented less than half the total damages sustained.

Initially, appellant had asked this Court only to reduce the damages payable to Plaisance. However, since this Court ordered the City of Montreal to be a party to the action, it must now rule on the following two questions: (1) can appellant, whose driver was only half responsible for the accident, be required to pay respondents an amount larger than half the common law damages? (2) should this half of the damages be paid in

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part to the City and in part to respondent Plaisance, or should it be paid first to one of the two respondents? The latter question is the subject of the subsidiary conclusions sought by appellant, which is asking that, if it must pay $25,200, the said amount be opposable to the City of Montreal.

Held: The main conclusions of the appeal should be dismissed but the additional conclusions allowed.

On the first question: appellant cannot be required to pay respondents more than half of the damages corresponding to the percentage of its driver’s fault. There is no joint and several liability between Brink’s and the City as regards respondent Plaisance’s damages; as the latter has no claim at common law against the third party (Brink’s), there cannot be joint and several liability between Brink’s and the employer (the City) within the framework of arts. 1103 and 1106 of the Civil Code. Appellant cannot be required to pay more than the part of the damages corresponding to the percentage of the fault of its driver.

On the second question: appellant was wrong to contend that it should pay each of the respondents only half their respective damages. Otherwise, although Plaisance committed no fault, he would not receive the indemnity equivalent to the loss sustained to which he is entitled under the Workmen’s Compensation Act; his claim should be given priority. The rules of subrogation are to this effect: the creditor who is paid in part only should have priority over the subrogated party for the remainder. The rules of insurance are to the same effect. The section of the Workmen’s Compensation Act stating that the employer shall be subrogated pleno jure in the rights of the workman must be read in its context; that does not mean in all the workman’s rights. Appellant, which must pay $25,200 to Plaisance, that is less than half of all the damages, will be able to oppose the said sum to the action of the City of Montreal.

R. v. Nord-Deutsche et al., [1971] S.C.R. 849; Margrande Compania Naviera, S.A., et al. v. The Leecliffe Hall’s Owners, et al., [1970] Ex. C.R. 870; The United Provinces Insurance Company v. Boulton et al., [1958] C.S. 433; Universal Pipe Line Welding Co. Ltd. v. McKay, [1969] Que. Q.B. 777; L’Abeille c. Veuve Gambin, D.C. 1944. 133; Mingarelli v. Montreal Tramways Company, [1950] S.C.R. 43; Adam and Schering Corporation Ltd. v. Dame Bouthillier, [1966] Que. Q.B. 6; Active Cartage Limited v. Quebec Workmen’s Compensation Commission, [1967] Que. Q.B. 339; Henry v. McMahon Transport Limited, [1972] C.A. 66; Mussens et al. v. Côté et al., [1973] S.C.R. 621, referred to;

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Vachon v. Dion et ai. (1893), 1 R. de J. 499, not followed; Ledingham v. Ontario Hospital Services Commission, [1975] 1 S.C.R. 332, applied.

APPEAL from a decision of the Court of Appeal of Quebec[1] which affirmed a judgment of the Superior Court. The main conclusions of the appeal dismissed but the additional conclusions allowed.

Paul Demers, for the appellant.

Gilles Poulin, for the respondent.

Luc Grammond and Jean Badeaux, Q.C., for the respondent, the City of Montreal.

The judgment of the Court was delivered by

DE GRANDPRÉ J.—Respondent Plaisance, a fireman in the employ of the City of Montreal, was on duty when the van in which he was a passenger was involved in a collision with a truck belonging to appellant. Respondent was injured and chose the compensation provided in the Workmen s Compensation Act, R.S.Q. 1964, c. 159. Furthermore, relying on s. 8 of the Act, he claimed in his action the “additional sum required to constitute, with the above‑mentioned compensation, an indemnification proportionate to the loss actually sustained”.

The trial judge came to the following conclusions:

(1) the fault of the two drivers contributed equally to the accident;

(2) the damages sustained by respondent Plaisance, beyond the compensation to which he was entitled under the Act, amount to $25,200;

(3) plaintiff was entitled to the total of this amount notwithstanding the fact that the error made by appellant’s driver was only half responsible for the accident.

A second action was brought against Brinks, this time by the City to recover the compensation it owed to Plaisance. This action was held in suspense by consent of the parties, with the result that neither the Superior Court nor the Court of

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Appeal was required to rule on these conclusions. The exact amount of the compensation for which the City is claiming reimbursement is not before this Court, but it was established in argument that the amount was slightly larger than the damages of $25,200 awarded to respondent by the judgments a quo.

Before the Court of Appeal appellant, notwithstanding the terms of its inscription, actually submitted only one proposition: considering the equal division of fault, the order made against it should have been limited to half the additional damages sustained by respondent. The majority of the Court of Appeal refused to accept this argument, and upheld the judgment at first instance; hence this appeal, in which the first two findings of the judgment at first instance are not challenged.

In its inscription appellant asks this Court, as it asked the Court of Appeal, to reduce the order made against it to $12,600. When the case was called on October 25, 1974, this Court ordered the City of Montreal to be made a party to the action, and the hearing was postponed. This appeal raises two questions:

(1) can appellant, whose driver was equally at fault with the City’s driver, be obliged to pay respondents a total amount larger than half the common law damages?

(2) if not, should this half of the damages be paid in part to the City and in part to respondent Plaisance in proportion to the interest of each, or should it be paid first to either Plaisance or the City, with only the difference, if any, payable to the other plaintiff?

At the hearing, this Court heard not only appellant but the two respondents as well. At the close of the hearing appellant, with leave of the Court, altered its inscription in appeal to add the following additional conclusions:

Subsidiarily, and in the event that the present appeal be dismissed, that this Honorable Court Hold that the condemnation against respondent for $25,200 plus interest be opposable to the intervenant City of Montreal in its claim in the case of City of Montreal vs Brinks S.C.M. 724203.

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The word “respondent” in this text is clearly an error, as the order was made against appellant. Furthermore, all the parties agree that the finding of this Court will finally settle their respective rights.

To resolve the first question, it must be determined whether the rules of joint and several liability apply so as to in some way make appellant liable to pay more than half the common law damages. I should say at once that in my opinion there is no joint and several liability between Brinks and the City as regards respondent Plaisance’s damages. I feel that in an accident such as the one before the Court, caused both by the fault of a third party and of a fellow employee of the victim, no joint and several liability can arise. Under the terms of the relevant sections of the Workmen’s Compensation Act, in particular ss. 3, 13 and 15, the employee injured in the course of his work has no claim at common law against his employer, and s. 9 of the Act extends this prohibition to his fellow employee; even when the employer and the fellow employee have been negligent, the injured party may not invoke the general rules of civil liability. His only claim at common law is against a third party whose fault may have caused the accident or contributed to it (ss. 7 and 8 of the Act). In such circumstances, art. 1103 of the Civil Code which prescribes the conditions for the existence of joint and several liability is not applicable, and consequently art. 1106 of the Civil Code may not be relied on either against a third party who is partly responsible for the incident. If there is no joint and several liability between the City on the one hand and appellant on the other, the latter definitely cannot be required to pay more than the part of the damages corresponding to the percentage of the fault of its driver.

This is the first time to my knowledge that this question of joint and several liability has been before the Supreme Court in the context of workmen’s compensation. Pigeon J. refers to it in R. v. Nord-Deutsche et al.[2], in particular at p. 879, but the points at issue did not require that it be answered. Other judges have also posed the

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same question, without having to arrive at a conclusion on the facts before them, as for example Noël J. in Margrande Compania Naviera, S.A., et al. v. The Leecliffe Hall’s Owners, et al.[3]. In addition, Brossard J. on two occasions affirmed the absence of joint and several liability in a case such as that before the Court, first in the Superior Court in The United Provinces Insurance Company v. Boulton et al.[4], and secondly in the Court of Appeal in Universal Pipe Line Welding Co. Ltd. v. McKay[5]. I need only adopt his reasons.

The real problem here is to determine who is entitled to the portion of the common law damages which appellant must pay, because of the fault of its servant. As indicated above, appellant in its principal conclusions submitted that it should pay half of Plaisance’s damages and half the City’s damages, whereas each of these two parties maintains that its right should be given priority.

If appellant’s principal argument is accepted Plaisance, the innocent victim of the accident, will not receive a full indemnity, that is “an indemnification proportionate to the loss actually sustained” (s. 8), since his compensation increased by half his excess damages would only allow him a total indemnity scarcely more than seventy-five per cent of his loss. Deschênes J., dissenting in the Court of Appeal, accepted this argument, noting that as, on the one hand, the Act protects the employee by always awarding him at least partial indemnity, whatever the circumstances of the accident, the employee in return must agree in advance that in certain exceptional circumstances he will not receive full reimbursement for his damages, although there was no fault in his conduct. In short, it would seem to be a question of the application of the quid pro quo theory to this social law. I cannot accede to this argument. In order to accept it, I would have to find a very clear

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provision in the Act depriving the victim who was not at fault of the right to recover total damages. The Act read as a whole, in particular ss. 7 and 8, provides no basis for the conclusion that the legislator, because he granted certain social benefits to the employee, intended at the same time, in certain circumstances, to deprive him of the rights conferred on him by the general law. I therefore cannot accept appellant’s principal claim.

Article 1157 of the Civil Code seems to me to settle the question in the sense I have just indicated:

The subrogation declared in the preceding articles takes effect as well against sureties as against principal debtors. It cannot prejudice the rights of the creditor when he has been paid in part only; in such case he may enforce his rights for whatever remains due, in preference to him from whom he has received payment in part.

It is true that several of our authors, in particular Mignault—Droit civil canadien, vol. 5, p. 571—and Faribault—Traité de droit civil du Québec, vol. 8bis, No. 612—refuse to extend this rule to unsecured debts. In thus limiting the scope of the article they rely on an isolated decision of our courts, Vachon v. Dion et al.[6], and on the majority view of French jurists adopted by the Court of Cassation (Req., Aug. 1, 1860, D.P. 1860.1.502; Req., Feb. 13, 1899, D.P. 1899.1.246), as our text is for all practical purposes similar to art. 1252 of the French Civil Code.

I feel that this solution is erroneous. As stated in André Besson’s note commenting on the decision of the Cour de Lyon in L’Abeille c. Veuve Gambin[7], this conclusion does violence to the very wording of the Code and fails to give full weight to the preparatory texts of the French Civil Code. In the case at bar, I conclude without hesitation that preference should be granted to the subrogating party up to the full amount of his claim. I especially approve of the simple, clear interpretation of the article in Langelier’s Cours de droit civil, vol. 4, at

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p. 110:

[TRANSLATION] The second sentence of art. 1157 is merely the application of a general rule which we shall see when we study art. 1986. In essence, this rule states that when the creditor is paid in part only, he should have priority over the subrogated party for the remainder. This is because on the part of the former, payment with subrogation is still a payment and, consequently, the part of the debt which has been paid with subrogation is considered to be finally discharged. If there had been payment, there could be no question of the creditor competing with a third party who has paid.

Similarly, Jean-Louis Beaudouin observes in Les Obligations, No. 531:

[TRANSLATION] Extinction of obligation—Payment with subrogation, like payment pure and simple, has the principal result of extinguishing the obligation between the debtor and the creditor. If the creditor has only been paid in part, he retains his rights for the other part of his claim against the original debtor. However, in such a case, in order to protect the creditor against possible competition of the solvens who has been subrogated for a portion, the creditor has preference over the latter. In other words, the creditor must take precedence over the solvens and not compete with him for what remains owing to him.

In support of this conclusion, a comparison can be made between the system of indemnity for industrial accidents and the law of insurance. There is no doubt that in the latter area if the insurance indemnity represents only part of the actual loss, the insured party must take precedence if he and his insurer are both claiming from the party liable, and he does not have the financial means to pay the total damages. This is reaffirmed in a recent decision by this Court, in Ledingham v. Ontario Hospital Services Commission[8]. Although the point at issue involved a case from another province, I feel, in view of the provision in our Code, the principle is fully applicable to the case at bar.

In view of the foregoing, it stands to reason that I certainly could not accept the claim of the City, which seeks to be totally reimbursed before the innocent accident victim can receive any indemnity

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from the third party liable. The City bases its claim on s. 7(3) of the Act, which states that the employer “shall be subrogated pleno jure in the rights of the workman”. This overlooks the whole of which this phrase is only a part, and the fact that ss. 7 and 8 of the Act establish without any doubt that this subrogation is not to all the rights of the injured party. It also overlooks the fact in Mingarelli v. Montreal Tramways Company[9], Abbott J., speaking for this Court, said at p. 46:

The subrogation provided for in subsection 3 of section 7 is an exception to the general law; it must be strictly interpreted and, as Bissonnette J. has pointed out in Commission des Accidents du Travail de Québec v. Collet Frères Limitée, [1958] Que. Q.B. 331, at 334, the section provides only for a partial subrogation.

It remains for me to mention that while admitting they are without any clear authority to cite to this Court, the parties relied on various judgments, including the following: Adam and Schering Corporation Ltd. v. Dame Bouthillier[10]; Active Cartage Limited v. Quebec Workmen’s Compensation Commission[11]; Henry v. McMahon Transport Limited[12] and Mussens et al. v. Côté et al.[13]. In my opinion, none of these judgments can be of any help. In Adam, the third party was totally liable. In Active Cartage and Henry, the point at issue concerned the liability shared between the victim and the third party. In Mussens, only the exact meaning of s. 3 of the Highway Victims Indemnity Act was in dispute.

I think it should be added that the conclusion of this Court in Mingarelli has not always been read correctly and that it may be necessary to consider it again.

For all of these reasons, I would dismiss the main conclusions of the appeal but allow its additional conclusions. In the circumstances, I would award respondent Plaisance his costs in all courts, and award no costs to the City of Montreal.

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Main conclusions of the appeal dismissed, additional conclusions allowed.

Solicitors for the appellant: Leggat, Colby, Rioux, Flynn, Demers & Swift, Montreal.

Solicitors for the respondent, Plaisance: Addessky, Kingstone, Zerbisias & Poulin, Montreal.

Solicitors for the respondent, the City of Montreal: Côté, Péloquin & Bouchard, Montreal.