Trans-Canada Shoe Ltd. v. Travelers Indemnity Co., [1976] 2 SCR 46

Supreme Court of Canada

Trans-Canada Shoe Ltd. v. Travelers Indemnity Co., [1976] 2 S.C.R. 46

Date: 1975-03-26

Trans-Canada Shoe Ltd. and Romeo Lahaie (Defendants) Appellants;

and

The Travelers Indemnity Company (Plaintiff) Respondent.

1974: March 19; 1975: March 26.

Present: Judson, Ritchie, Pigeon, Dickson and Beetz JJ.

ON APPEAL FROM THE COURT OF QUEEN’S BENCH, PROVINCE OF QUEBEC

Fault—Fire in rented store—Cause not determined—Human factor admitted by lower courts—Evidence justifying liability of tenant but not of manager.

Appellant Trans-Canada Shoe Ltd. was the tenant of a store that was damaged by a fire. The cause of the fire was not established. Only the human factor was admitted, and solely on the basis of presumed but unspecified fault the lower courts attributed liability to Trans‑Canada Shoe Ltd. and its manager, Roméo Lahaie, who were ordered to indemnify respondent for the compensation which it had to pay for damage caused to another tenant by this fire. Hence the appeal to this Court.

Held (Ritchie and Dickson JJ. dissenting): The appeal should be allowed only with respect to Roméo Lahaie.

Per Judson, Pigeon and Beetz JJ.: The evidence produced did not support a finding of presumed fault by the manager. It is not enough to show that he was the last to be on the premises and that the fire occurred a short time after his departure. It was correctly pointed out that the fire started at the back of the store, to which the public had no access. However, there were other employees who left the premises only a short time before the manager. The emphasis placed on the fact that the latter was a heavy smoker implies that he might very well have thrown a smouldering cigarette butt into combustible material. Yet why was it necessarily Lahaie who committed this error, and not one of the other employees?

As for Trans-Canada Shoe Ltd., all that remained was simply the evidence contained in the plans, according to which the installation was to comply with all safety requirements, and the opinion of the expert witness that the equipment installed was “fool-proof”. Such evidence is not sufficient to support a conclusion that the tenant is responsible for a fire occurring in the leased

[Page 47]

premises, when the presumption of art. 1629 C.C. is inapplicable. It cannot be concluded that the lower courts made a manifest error as in the case of the manager.

Per Ritchie and Dickson JJ. (dissenting): The courts below concurred in finding against Lahaie, and against his employer vicariously. No palpable or manifest error has been shown or is evident, to warrant intervention by this Court. However, if there were grounds for relieving Lahaie of liability, it would also be necessary to relieve his employer, for in the absence of vicarious liability for the actions of Lahaie there would be in the record little cause to hold the company liable.

[Cummer-Yonge Investments Limited v. Agnew-Surpass Shoe Stores Limited, [1972] 2 O.R. 341, and Landels v. Christie, [1923] S.C.R. 39, referred to]

APPEAL from a judgment of the Court of Queen’s Bench, province of Quebec, affirming a judgment of the Superior Court. Appeal allowed with respect to Roméo Lahaie only, Ritchie and Dickson JJ. dissenting.

F. Mercier, Q.C. for the defendants, appellants.

Guy Pépin and R.L. Gouin for the plaintiff, respondent.

The judgment of Judson, Pigeon and Beetz JJ. was delivered by

PIGEON J.—The Court of Appeal has affirmed, Owen J.A. dissenting, the judgment of the Superior Court condemning the appellants to indemnify the respondent for the consequences of a fire that occurred on July 25, 1964.

Trans-Canada Shoe Ltd. was the tenant of a store in the Trois-Rivières Ouest shopping centre, and Roméo Lahaie was the manager of this store. Respondent is the insurer of another tenant and is claiming by subrogation to the rights of the latter. The outcome of a number of similar claims depends on the final disposition of the case at bar. As the action was not instituted by the lessor or his assigns, it is conceded that the presumption of art. 1629 C.C. is not applicable. The only point at issue is whether the facts proven in the instant case were sufficient to support the presumption of fault drawn from them by the Quebec Courts. The

[Page 48]

cause of the fire was not established, and liability was attributed to Trans-Canada Shoe Ltd. and its manager solely on the basis of a presumed fault, without any precise indication of the nature of this fault.

The trial judge summarized the relevant facts and arrived at his conclusion on liability as follows:

[TRANSLATION] The relevant facts submitted in evidence may be summarized as follows:

(a) the fire originated in No. 28, the premises occupied by the principal defendant; the call to the Fire Department of the Town of Trois-Rivières Ouest was received at about 6:15 p.m. on July 25, 1964, a Saturday;

(b) the premises occupied by the principal defendant had been built three years before; the concrete block walls had a plaster surface; the floor was concrete and the ceiling, attached to a metal structure, was covered with tiles; hot water heating was provided and the boiler was located 400 feet away from the premises of the principal defendant; type BX electric wiring was enclosed in a metal covering, with rigid steel piping in addition; the electric switches met specifications as to their number and capacity; after construction the electrical installation was approved by the Inspection Service of the Department of Labour;

(c) according to plaintiffs expert witness, Guy Perreault, a consulting engineer, who for four or five years has specialized in the investigation of the causes of fires, all so-called “independent” factors must be ruled out as explanations of the disaster that occurred; independent factors involve the construction itself, and the electrical, plumbing, heating and air conditioning fixtures; these fixtures, which were adequate and were three years old, had not had enough wear and tear to have deteriorated, and had not been found defective since the first occupation of the building; nor, according to Perreault, can the cause of the fire be attributed to spontaneous combustion, since there were in defendant’s establishment no volatile substances which could have produced spontaneous combustion, taking into account all the necessary ingredients for such a reaction; in conclusion, the expert witness could see no other explanation of the cause of the fire but the human element; and the expert testimony produced by plaintiff was not contradicted by the principal defendants;

[Page 49]

(d) defendant Roméo Lahaie, who was manager for the principal defendant on the day of the fire, was the last employee to leave the premises at about 5:40 p.m., or about twenty minutes before the usual closing time; he was a heavy smoker at the time; before leaving the store, he checked the ashtrays, locked the doors and turned out the lights; after leaving, he consumed two small bottles of beer; according to the testimony of Léo-Paul Désilets, a police officer of the Town of Trois-Rivières Ouest, he appeared to be inebriated when he returned to the premises shortly after 7 p.m.; however, the testimony of J.A. Mongrain, Léo-Paul Pépin and Réal Vincent was that Lahaie was merely in a state of extreme anxiety.

Taking into consideration all of the above stated facts, the Court really feels that the fire, which originated in defendant company’s store, and which was reported to the Fire Department of the Town of Trois-Rivières Ouest at 6:15 p.m., that is about twenty minutes after defendant Lahaie allegedly left and closed up the premises, can only be attributed to the human element, namely to the negligence of Lahaie in failing to make certain inter alia, that cigarette butts that might have been scattered about the premises were fully extinguished; defendant Lahaie indeed admitted that he was a heavy smoker at the time, and said he had checked the ashtrays before leaving the premises; the latter statement of Lahaie is not sufficient to offset the weighty evidence of significant, specific and concurrent presumptions submitted by plaintiff.

After quoting this conclusion Owen J.A., dissenting in the Court of Appeal, stated:

In my opinion the Plaintiff (Travelers) did not discharge the burden of proving by indirect evidence that the fire was caused by negligent acts on the part of Lahaie. There is the uncontradicted evidence of Lahaie that before leaving the premises he checked the ashtrays and turned out all the lights. Against this we have the evidence of the expert Perreault to the effect that the fire was not caused by any defect in the building but by some human factor. There is also the fact that Lahaie was a heavy smoker and that he was the last one to leave the premises about thirty-five minutes before the fire was reported. However without any evidence that the fire was caused by smouldering cigarette butts it is a very long step from the finding that the fire was caused by some human factor to the inference that it was caused by the imprudence of Lahaie in not making sure before his departure that all cigarette butts were extinguished. In my opinion these facts did not give rise to

[Page 50]

presumptions, “graves, précises et concordantes” that the fire was caused by the negligence of Lahaie.

In my opinion Owen J.A. was perfectly correct in saying that the evidence produced did not support a finding of presumed fault by the store manager. It is not enough to show that the person allegedly responsible was the last to be on the premises, and that the fire occurred a short time after his departure. This would imply a definite assumption that a careful man does not fail to discover any cause of fire that may exist. It was correctly pointed out that the fire started at the back of the store, to which the public had no access. However, there were other employees who left the premises only a short time before the manager. The emphasis placed on the fact that the latter was a heavy smoker implies that he might very well have thrown a smouldering cigarette butt into combustible material, since the fire was clearly not caused by butts in the ashtrays. Yet why was it necessarily Lahaie who committed this error, and not one of the other employees? In answer to this question counsel for the respondent replied that it would make no difference as to the liability of Trans-Canada Shoe Ltd. That is true, but it does make a significant difference so far as Roméo Lahaie is concerned.

In a comparable case which also involved a shoe store Hartt J., of the Supreme Court of Ontario, finding insufficient evidence to establish the cause of the fire with reasonable certainty, held the tenant responsible but not the employees Cummer-Yonge Investments Limited v. Agnew-Surpass Shoe Stores Limited[1]. This judgment was appealed[2] and taken to this Court, but not on the issue of responsibility.

So far as Trans-Canada Shoe Ltd. is concerned, the only material points in the evidence adduced against it may be summarized as follows.

[Page 51]

After a vain attempt to subpoena the records of the Fire Commission, the building plans and specifications were produced. Then, an electrical inspector who visited the scene six days after the fire filed a report stating (and this is also the substance of his testimony):

[TRANSLATION] 1.—This installation requires almost complete overhaul.

2.—Finding:

Service connection of 200 amps. at 110/220 volts, normal. Distribution panel with breakers all normal at 15 amps. each.

3.—Ground connection normal.

4.—With regard to wiring and outlets, these were too badly damaged by the fire to make any findings and give an opinion on the origin of the fire.

Then, plaintiff called as a witness appellant Roméo Lahaie who said he had closed up the store when he left at 5:40 p.m., and who admitted being a heavy smoker. Next, the chief of the Fire Department was called, and he stated:

[TRANSLATION] When we got in to where we could see—I should point out that at the very beginning it was almost impossible due to the heavy smoke filled with soot—we were able to see that the fire—the main fire—was at the rear of the store.

Finally, counsel called an engineer who had never investigated the fire in question, and had seen nothing before the day of the trial. Basing himself only on the testimony and exhibits, he concluded:

[TRANSLATION] In the present circumstances, however, as I did not participate in anything subsequent, all I can tell you is that I eliminate all independent causes, thus leaving only human causes; but I can go no further than this.

The only argument advanced by counsel for the appellants at the hearing against the validity of the expert witness’s conclusion was that the testimony of the electrical inspector did not really eliminate electricity as a possible “independent cause” of the fire. The inspector was unable to examine most of the electrical installation, namely the wiring and the equipment. Therefore, all that remained was

[Page 52]

simply the evidence contained in the plans, according to which the installation was to comply with all safety requirements, and the opinion of the expert witness that the equipment installed was “foolproof”. I am far from being persuaded that such evidence is sufficient to support a conclusion that the tenant is responsible for a fire occurring in the leased premises, when the presumption of art. 1629 C.C. is inapplicable. However, I am unable to conclude that a manifest error was made, whereas in respect of Roméo Lahaie I do consider such an error was made. The testimony of the expert witness, merely eliminating independent causes, was no basis for holding that Roméo Lahaie, rather than some other employee, was the “human cause”. With respect to Trans-Canada Shoe Ltd., the position of the latter in this Court seems to me to be essentially the same as that of the tenant in Landels v. Christie[3].

I therefore conclude that the appeal should be allowed only to the extent of dismissing the action against defendant Roméo Lahaie, with costs in the Superior Court only, since he was represented on appeal and in this Court by counsel for Trans-Canada Shoe Ltd.; but I would dismiss the appeal with costs against the latter.

The judgment of Ritchie and Dickson JJ. was delivered by

DICKSON J. (dissenting)—In these proceedings an insurance company seeks to recover from the owner of a shop in which a fire originated the amount paid by the company in satisfaction of claims for fire damage sustained by owners of adjoining shops. At trial the insurance company produced two expert witnesses who catalogued the possible causes of the fire and then proceeded to eliminate each, except human error. The company sought then to establish that the defendant Lahaie, manager of the shop on the day of the fire, was the person responsible for the error. The evidence showed that: (i) Lahaie was the last employee to leave the premises, at about 5:40 p.m., some thirty-five minutes before the fire was reported; (ii) Lahaie was a heavy smoker; (iii) he had two

[Page 53]

ashtrays on the counter and one on his desk at the rear of the premises; (iv) the fire would appear to have started at the rear of the premises in an area to which the public did not have access; in that area shoes were stored and cardboard cartons, wrapping paper and the like were collected for later disposal; (v) when Lahaie returned to the scene at about 7:00 p.m. he gave the impression, to at least one witness, of being inebriated and extremely anxious. The evidence in Lahaie’s favour was (i) that he had checked the ashtrays before leaving the premises; his evidence is none too clear on this point and can be understood to mean merely that it was his custom to check ashtrays before turning off the lights and locking the doors; (ii) one of the experts, Perreault, had not visited the scene of the fire; his knowledge was based only upon building plans and discussions with other witnesses. The trial judge came to the conclusion, after considering all of the evidence, that Lahaie had been the cause of the fire and the Court of Appeal for the Province of Quebec, by a majority, affirmed. The dissenting member of the Court, Owen J.A., would have dismissed the action against Lahaie and against his employer.

The issues raised in this appeal concern findings of fact and inferences to be drawn from those findings. The courts below have concurred in finding against Lahaie, and against his employer vicariously, and in my opinion no palpable or manifest error has been shown or is evident, to warrant intervention by this Court. In Sénésac v. The Central Vermont Railway Company[4]., in an action against a railway company for damages for loss of property by fire alleged to have been occasioned by sparks from an engine or hot-box of a passing train, the Court held, p. 646:

The jurisprudence of the Privy Council and of this court has been not to disturb judgments appealed from upon

[Page 54]

mere questions of fact, unless clearly wrong or erroneous.

The principle was reiterated in The Grand Trunk Railway Company of Canada v. Rainville[5], in another action against a railway company in consequence of fire alleged to have been caused by sparks from an engine of the company. In both of these cases there was no direct evidence of how the fire occurred and concurrent findings in the lower courts, in favour of the defendant railway in Sénésac and against the defendant railway in Rainville, were not disturbed in this Court. The principle has been applied repeatedly: The Dominion Fish Company v. Isbester[6], at p. 638, “…the appellant must put his finger on the mistake made by the trial judge….”; Weller v. The McDonald-McMillan Company[7], at p. 87, the Court will only interfere when satisfied that “the conclusion reached is absolutely wrong”; Landels v. Christie[8]; Labadie v. McMillan[9]. The Court will not reverse even though the evidence on which the courts below based their findings of fact might appear weak: George Matthews Company v. Bouchard[10]. And in Swyrd v. Tulloch[11], Rinfret C.J.C. said, p. 200:

The Appellate Division confirmed the judgment of the trial judge. There are therefore concurrent findings of facts and the invariable rule, always followed by our Court, applies.

See also Levy v. Manley[12].

It is true some of the earlier cases fail to distinguish between the finding of specific facts, sometimes termed the perception function, and the finding of fact which is really an inference from

[Page 55]

facts specifically found, sometimes termed the evaluation function: Benmax v. Austin Motor Company Ltd.[13] and Professor Goodhart’s article in (1955) L.Q.R. 402, “Appeals on Questions of Fact”. It is true also that the function being exercised on appeal in this case is largely one of evaluation. Nevertheless, except in exceptional cases the attitude of a second appellate court in my opinion should be one of non-intervention when the trial court and the first appellate court are like-minded in the conclusions they reach in the exercise of their perception and evaluation functions. There was evidence in the present case from which the trial judge could conclude that Lahaie was responsible for the fire, and with concurrent findings in the courts of Quebec, I would think this appeal should be dismissed. I would add only that had I been inclined to relieve Lahaie of liability, I would also have relieved his employer for in the absence of vicarious liability for the actions of Lahaie I can find in the record little cause to hold the company liable.

I would accordingly dismiss the appeal with costs.

Appeal allowed in part, RITCHIE and DICKSON JJ. dissenting.

Solicitors for the defendants, appellants: Stikeman, Elliott, Tamaki, Mercier & Robb, Montreal.

Solicitors for the plaintiff, respondent: Lajoie, Gouin, Desaulniers & Lajoie, Trois-Rivières.