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REPORT

CONTRIBUTION AMONG WRONGDOERS AND
CONTRIBUTORY NEGLIGENCE

ONTARIO LAW REFORM COMMISSION

Ministry of the 1988

Attorney

General

Digitized by the Internet Archive

in 2011 with funding from

Osgoode Hall Law School and Law Commission of Ontario

http://www.archive.org/details/reportoncontribuOOonta

REPORT

CONTRIBUTION AMONG WRONGDOERS AND
CONTRIBUTORY NEGLIGENCE

ONTARIO LAW REFORM COMMISSION

Ministry of the 1988

Attorney

General

The Ontario Law Reform Commission was established by the Ontario
Law Reform Commission Act for the purpose of reforming the law, legal
procedures, and legal institutions. The Commissioners are:

James R. Breithaupt, CStJ, CD, QC, MA, LLB, Chairman

H. Allan Leal, OC, QC, LSM, LLM, LLD, DCL, Vice Chairman

Earl A. Cherniak, QC

J. Robert S. Prichard, MBA, LLM

Margaret A. Ross, BA (Hon.), LLB

M. Patricia Richardson, MA, LLB, is Counsel to the Commission. The
Commission's office is located on the Fifteenth Floor at 18 King Street East,
Toronto, Ontario, Canada, M5C 1C5

The Commission wishes to acknowledge the contribution of four
former Commissioners: Dr. Derek Mendes da Costa, QC, SJD, LLD,
former Chairman of the Commission, Hon. Richard A. Bell, PC, QC, LLD,
Mr. William R. Poole, QC, and Mr. Barry A. Percival, QC, whose tenure at
the Commission extended through much of this Project.

ISBN 0-7729-3815-6

TABLE OF CONTENTS

Page

Letter of Transmittal ix

Chapter 1 Introduction 1

Recommendation 6

Chapter 2 Joint and Several Liability 7

L Introduction 7

2. Present Law 7

(a) Joint Tortfeasors and Several Tortfeasors 7

(b) Joint Contractors and Several Contractors 19

3. Reform and Proposals for Reform in Other Jurisdictions ... 20

4. Conclusions 23

(a) The Judgment Bar and Release Bar Rules and Offers

of Settlement 23

(b) The Single Judgment Rule 27

Recommendations 29

Chapter 3 In Solidum Liability 31

1. Introduction 31

2. The Debate Regarding In Solidum Liability 33

(a) The "Fairness" Argument 33

(b) The Insurance Argument 36

(d) Other Ramifications for the Tort System 39

3. The Law in the United States 40

(a) Introduction 40

(b) Reform in the Context of Comparative Fault 41

States 43

4. Conclusions 46

Recommendations 48

Chapter 4 The Nature and Scope of the Right to

Contribution 49

1. Introduction 49

2. Contribution and Related Claims: Common Law, Equity,

and the Principle of Unjust Enrichment 49

[iii]

3. The Scope of the Right to Contribution 55

(a) Torts 55

(i) Should the Right to Contribution Be

Abohshed? 55

(ii) The Present Law 59

(iii) The Case for Expansion 61

(iv) Other Jurisdictions 63

(v) Conclusions 65

(b) Other Kinds of Civil Liability 65

(i) The Present Law 66

(ii) The Case for Expansion 70

(iii) Other Jurisdictions 71

(iv) Conclusions 73

a. Concurrent Wrongdoers 73

b. Concurrent Debtors 74

(d) Remedies Available to the Claimant for Contribution 81

(e) Binding the Crown 82

Recommendations 82

Chapter 5 Settlements and Contribution Claims 85

1. Introduction 85

2. The Present Law 85

3. Reform of the Law 90

(a) Should There be a Right of Contribution Following a

Full Settlement? 90

(b) Dl's Liability to P: Its Relevance to Contribution

Claims 91

(i) Introduction 96

(ii) Alternatives for Reform 98

a. No Change in the Law 98

b. No Right of Contribution 99

c. One Way Contribution 104

(iii) Conclusions 105

Recommendations 108

Chapter 6 Defences to Contribution Claims: Liability to

THE Injured Person Ill

1. Introduction Ill

2. Liability of Dl to P 112

3. Liability of D2 to P 117

(a) General 117

(b) The Present Law 121

(i) No Change in the Law 124

(ii) Reduction of Damages of Injured Person .... 126

(iii) Exemption Clause No Defence to

Contribution Claim 127

(d) Conclusions 128

(i) Contractual Defences to Claims for

Contribution 128

a. Exemption Clauses 128

b. Limited Liability Clauses 129

(ii) Non-Contractual Defences to Claims for

Contribution 135

a. Contributory Negligence 136

b. Other Defences 138

Recommendations 139

Chapter 7 Defences to Contribution Claims: Subsequent

Immunities 141

1. Introduction 141

2. Contribution and Limitation Periods 144

(a) The Present Law 144

(b) Alternatives for Reform 150

3. The Effect of a Judgment in Favour of D2 in Proceedings
Instituted by P 160

(a) Introduction 160

(b) The Present Law 161

(d) Conclusions 168

4. The Effect Upon the Right to Contribution of a Settlement,

Release, or Waiver by P of D2's Liability 169

Recommendations 170

Chapter 8 The Assessment of Contribution 173

1. Introduction 173

2. The Contributable Sum 173

(a) General 173

(b) Settlements 175

(i) General 175

(ii) The Present Law 177

(iii) Other Jurisdictions 178

a. Final Settlement 178

b. Partial Settlement 180

(iv) Conclusions 180

a. Final Settlement 180

b. Partial Settlement 181

3. The Division of the Contributable Sum: Who Must
Contribute? 186

4. The Division of the Contributable Sum: Quantifying the
Portions 188

(a) The Present Law 188

(b) Reforming the Law 190

(i) General 190

(ii) Approaches to Reform 192

Recommendations 198

Chapter 9 Some Procedural Aspects of Contribution

Claims 201

1. Introduction 201

2. Proceedings for Claiming Contribution 202

(a) The Present Law 202

(i) Claims Against Co-Defendants 202

(ii) Claims Against a Plaintiff 203

(iii) Claiming Contribution by Adding a Party to

the Action 204

Vll

(iv) Claiming Contribution in an Independent

Action 206

(v) The Rule in Cohen v. S. McCord & Co. Ltd . . 209

(b) Alternatives for Reform 211

3. Contribution Claims and Limitation Periods 217

(a) Introduction 217

(b) The Present Law 218

(d) Conclusions 222

4. Enforcing the Right to Contribution 223

Recommendations 227

Chapter 10 Contributory Negligence 229

1. Introduction 229

(a) The Common Law Background 229

(b) Apportionment Legislation 230

2. Legal Wrongs Subject to Apportionment 233

(a) Introduction 233

(b) Torts 233

(i) Nominate Torts Involving Negligence 233

(ii) Torts of Strict Liabihty 234

(iii) Intentional Torts 234

a. Assault and Battery 235

b. Trespass and Nuisance 237

c. Fraud 238

d. Conversion and Related Torts 239

e. Defamation 239

(i) Present Law 240

(ii) Should All Breaches of Contract be Affected? 242

a. General 242

b. Possible Approaches to Apportionment

for Breach of Contract 245

(1) Breach of Warranty and Physical

Damage 245

Vlll

(2) Reliance on Promised Performance . . 246

(3) Deliberate Breach 248

c. Conclusions 248

(d) Breach of Statutory Duty 249

(e) Breach of Fiduciary Duty 249

(f) Losses Subject to Apportionment 252

3. Set Off and Counterclaim 253

4. Costs 255

5. Contributory Negligence and Multiple Wrongdoers 257

(a) Absent or Insolvent Wrongdoer 257

(b) P Liable to Dl and D2 on Counterclaims, and Dl and

D2 Liable to Each Other 258

6. Doctrine of Last Clear Chance 259

7. Imputed Contributory Negligence 260

8. Fact and Law 261

9. Existing Rights of Apportionment 262

Recommendations 264

Summary of Recommendations 267

Conclusion 279

Appendix Draft Bill: An Act to revise the Law respecting
comparative Fault and Contribution among

Wrongdoers 281

Ontario
Law Reform
Commission

The Honourable Ian G. Scott, QC
Attorney General for Ontario

Dear Mr. Attorney:

We have the honour to submit herewith our Report on Contribution
Among Wrongdoers and Contributory Negligence .

{ ix ]

CHAPTER 1

INTRODUCTION

This Report is concerned principally with the rights and obligations, as
between themselves, of persons whose wrongful conduct has caused a single
loss to another. Such persons are commonly called "concurrent wrong-
doers", since their wrongful acts concur, or coincide in some way (although
not necessarily contemporaneously), to give rise to a single loss, that is, a loss
that cannot be divided so that part may be attributed to one wrongdoer and
part to another wrongdoer. The bundle of rights and obligations of concur-
rent wrongdoers as between themselves— or, more accurately, the right of
one concurrent wrongdoer, who has paid more than his lawful share of the
damage award, to obtain compensation from the other wrongdoer— is
referred to generally as the "right to contribution".

Our review of rights of contribution and related matters has revealed a
number of deficiencies in the present law. Given their importance, brief
mention of the most critical issues seems appropriate here.

Before doing so, however, we wish to emphasize the fundamental,
unifying principle that lies behind contribution and other allied rights,
namely, the restitutionary principle of unjust enrichment, which compels
the non-paying concurrent wrongdoer to pay for the benefit he received as a
result of the full or partial satisfaction of the injured person's judgment by
another concurrent wrongdoer. Our assessment of the utility of the present
law, and of various alternatives for reform, is influenced largely by the
centrality of this restitutionary principle.

Bearing this overarching principle in mind, the Commission examines
in some detail the nature and scope of existing rights to contribution among
concurrent wrongdoers.

One of the most substantial defects in existing law is the limited, and
ambiguous, scope of the Negligence Act^—Xht main legislative enactment
governing contribution— whose purview is restricted to concurrent tortfea-
sors (and perhaps not even all tortfeasors). In the Commission's view, the
general absence of a right of contribution in the case of non-tortious conduct
unjustifiably allows the injured person to choose one concurrent wrongdoer
to bear the entire loss.

• Negligence Act, R.S.O. 1980, c. 315.

[1]

Tested against prevailing restitutionary principles, this exclusion of
other kinds of civil liability— for example, breach of contract— is untenable.
Having regard to the restrictions and uncertainties in existing law, the
difficulties experienced by courts in establishing a coherent set of rules on a
case-by-case basis, and the likelihood of discrepancies between the statutory
rights of tortfeasors and the non-statutory rights of other wrongdoers, there
is a compelling case for a legislative solution.

Once it has been concluded that a right of contribution ought to exist
among all concurrent wrongdoers, it becomes essential to grapple with the
many complex intricacies of contribution law. While existing law may well
deal satisfactorily with one or more aspects of contribution, substantial
reform in many areas is needed, particularly in light of the expansion of the
right of contribution discussed above. Difficult and controversial issues-
involving, for example, the relationship between settlements and contribu-
tion claims, contractual and other defences to such claims, the effect of
Hmitation periods vis-d-vis each concurrent wrongdoer, the assessment of
contribution, the legal basis of apportioning loss between concurrent wrong-
doers, and the execution of contribution orders— must, we beUeve, be re-
examined and resolved.

While this Report focuses mainly on the right to contribution among
concurrent wrongdoers, it considers three further, related matters. The first
pertains to the rights, not of the wrongdoers as between themselves, but of
the injured person whose loss has been caused by two or more concurrent
wrongdoers. From this perspective, we shall discuss the two classes of
concurrent wrongdoers, namely, "joint" concurrent wrongdoers, "where
there is not only a concurrence in the chain of causation leading to the single
damage but also. . .mental concurrence in some enterprise",^ and "several"
concurrent wrongdoers, "where the concurrence is exclusively in the realm
of causation".^

At common law, four consequences flowed from the distinction
between joint and several concurrent liability. Most of these distinctions
have now been superseded by legislation. However, one of them continues
to apply and, as well, some further anomahes still exist. The holdovers from
the common law are, in our view, entirely unjustifiable and ought no longer
to govern.

A second critical issue, also relating to the rights of an injured person
against concurrent wrongdoers, concerns the liability in solidum of each
joint or several concurrent wrongdoer. A fundamental principle of the
common law is that a plaintiff's right to recover damages for the whole loss
caused by the wrongful conduct of one concurrently Uable defendant is not
diminished by the fact that the plaintiff may also be entitled to sue another
concurrently Uable defendant for that loss. Hence, each concurrent wrong-

Williams, Joint Torts and Contributory Negligence (1951), at 1.
3 Ibid.

doer is liable in solidum, for the whole loss, as if there were no other
wrongdoer against whom the injured person has a claim (although clearly
the injured person may not recover damages that exceed the total amount of
the loss). Liability in solidum, which existed at common law and continues
today in Ontario under the Negligence Act ,^ gives rise to claims for contribu-
tion by one concurrent wrongdoer against another, the principal subject
matter of this Report.

A heated debate has raged for some time concerning the desirability of
retaining the principle of in solidum liability, particularly in the context of
the so-called liability insurance "crisis" in Ontario. But commentators assail
or justify the principle also from the perspective of "fairness" to defendants
(especially where all but one of the concurrently liable wrongdoers are
insolvent), the deterrence of activity that may harm others, and the opera-
tion of the tort system as a whole.

With respect to the insurance issue, detractors argue that the operation
of the principle has broad socio-economic consequences. It is said that
injured persons seek out "deep pocket" defendants— that is, those who are
the most solvent or best insured— which in turn allegedly compels such
defendants to settle, well in excess of their proportionate hability. Such
settlements are reflected in higher insurance premiums, which then affect
the provision of goods and services to the public by increasing their cost and
reducing their availability. It is the legitimacy of this argument, as well as
others, to which we direct our attention.

The third topic that relates to, but is not directly concerned with, the
right of contribution is the effect of the plaintiff's contributory negligence or
"fault" on the liability to the plaintiff of a single wrongdoer or concurrent
wrongdoers.

Section 4 of the Negligence Act provides for a power of apportionment
in the case of a plaintiff and a defendant. However, its coverage is limited,
since it speaks only in terms of the "fault or negligence" of both parties. Just
as in the case of contribution, then, there is a need to re-examine the scope of
the legislation: consideration must be given to the role, if any, of apportion-
ment in the context of intentional torts, defamation, fraud, breach of
contract, and breach of a statutory or fiduciary duty.

In considering the various issues that arise in our study of contribution
and related matters, particular attention is paid to the 1984 Uniform
Contributory Fault Act, adopted by the Uniform Law Conference of

^ Supra, note 1, s. 2. In this connection, see Williams, supra, note 2, at 3-4 and 5, and
Cheifetz, Apportionment of Fault in Tort (1981), at 7. Section 2 of the Negligence Act is
somewhat confusing on this point, since it provides that, "where two or more persons
are found at fault or negligent, they are Jointly and severally liable"' to the injured party.
As we shall see infra, ch. 2, sec. 2(a), this language was intended simply "to declare that
the liability of concurrent tortfeasors is in solidum, and no operation should be given to
the legislation beyond this": Williams, supra, note 2, at 6.

Canada.^ We do so both in order to take full advantage of the research of the
Alberta Institute of Law Research and Reform, on which the Uniform Act is
based,^ and because, in the interests of uniformity, the provisions of that Act
ought, at the very least, to be given serious consideration.

Our review of the law governing the rights and obligations, as between
themselves, of concurrent wrongdoers, as well as the rights of the injured
person vis-d-vis such wrongdoers and the effect of the injured person's
contributory negligence, reveals a tension between the desire to protect the
interests of injured persons and the need to deal fairly with concurrent
wrongdoers. This tension inevitably gives rise to dramatically different
perspectives on each issue; it also serves to explain the often highly sophisti-
cated and subtle arguments marshalled on behalf of one alternative for
reform or another.

More frequently than not, a perfect solution, which meets to the full the
interests of all parties, cannot be reached. We believe, however, that the
reform measures fashioned in this Report strike a reasonable and equitable
balance between competing objectives.

In some instances, statutory reform of existing common law is envis-
aged; in other instances, where existing legislation— mainly the Negligence
Act— is seen to be inadequate, statutory change of that legislation is pro-
posed. In any event, whether a legislative solution is recommended, or
whether the law would be allowed to develop on a case-by-case basis,
without express statutory assistance, the Commission is of the view that the
law in this area must be rationalized. As part of this process, we recommend
the repeal of the Negligence Act and the enactment of a new Contribution
and Comparative Fault Act to deal comprehensively with the matters
referred to above. ^

Before turning to our discussion of the law and our proposals for
reform, two matters relating to terminology need to be addressed.

Uniform Law Conference of Canada, Proceedings of the Sixty-Sixth Annual Meeting
(1984), Appendix F, Uniform Contributory Fauh Act .

The Uniform Act was first adopted in 1924 and revised in 1935 and 1953. See
Proceedings of the Seventh Annual Meeting of the Conference of Commissioners on
Uniformity of Legislation in Canada (1934), Appendix B; Proceedings of the Eighteenth
Annual Meeting of the Conference of Commissioners on Uniformity of Legislation in
Canada (1935), Appendix E; and Proceedings of the Thirty-Fifth Annual Meeting of the
Conference of Commissioners on Uniformity of Legislation in Canada (1953), Appen-
dix I.

See Alberta, Institute of Law Research and Reform, Contributory Negligence and
Concurrent Wrongdoers, Report No. 31 (1979). See, also, the Institute's Working Paper:
Contributory Negligence and Concurrent Tortfeasors (1975).

It should be noted that the former Uniform Act (see supra, note 5) remains in
force in Alberta. See the Alberta Contributory Negligence Act, R.S.A. 1980, c. C-23.

The proposed Contribution and Comparative Fauh Act (hereinafter referred to as
"Draft Act") appears as an Appendix of this Report. See, especially, s. 23, which deals
with the application of the Act, and s. 24, which repeals the Negligence Act .

As we shall see in chapter 4, rights of contribution may arise by statute,
at common law, in equity, or by contract. In many instances— indeed, under
the Ontario Negligence Act— a. right of "contribution" is juxtaposed in the
same section with a right to "indemnity".^ Where the statutory or contrac-
tual provision referring to "contribution and indemnity" is intended to
provide for the case where one concurrent wrongdoer may recover a sum
from another concurrent wrongdoer after the former has paid to the injured
person more than his lawful share of the damages, the reference to an
"indemnity" is simply a reference to full, or 100 percent, contribution. In
these cases, the terms "contribution" and "indemnity" are both used where
one concurrent wrongdoer is more at fault or more negligent than another,
and where the determination of the rights of the wrongdoers, as between
themselves, involves a comparison of their respective degrees of fault or
negligence. In this Report, the Commission will use the term "contribution"
to refer to cases of this sort, including where a court orders one wrongdoer to
pay 100 percent contribution, or no contribution, to another. In this context,
therefore, we shall not refer to "indemnity" to mean simply 100 percent
contribution.^

The term "indemnity" has, however, a meaning other than the one
discussed above. More narrowly defined, it refers to the case where two
persons are liable for the same debt or damages, but the liability of one is
primary and the liability of the other is secondary. Where the person
primarily liable defaults in his obligation, and the person secondarily liable
pays in his stead, as in the classic case of a guarantee, the payor may
normally seek "indemnity" from the other; that is, in the absence of any
contractual provision to the contrary, for example, the payor may recover
full compensation from the person primarily Uable. Unlike in the case of
contribution, the determination of indemnity claims is based not on com-
parative fault or negligence, but on the nature of the relationship between
the parties. It is in the above sense, then, that we shall use the term
"indemnity" in this Report. We shall return to the right to indemnity in
chapter 4, where we discuss, among other things, the application of our
recommendations to such a right. ^^

The second terminological point concerns the short-hand designation
of the parties to whom our reform proposals relate. Throughout this Report,

^ Under s. 2 of the Negligence Act , each concurrent tortfeasor is Hable "to make contribu-
tion and indemnify each other". Section 2(4) of the Dog Owners' Liability Act, R.S.O.
1980, c. 124, for example, refers to a right "to recover contribution and indemnity".
Other statutory, and contractual, examples may be found.

^ See Williams, supra, note 2, at 80: "Where the contribution is of the whole of the sum so
paid it is referred to specifically as an indemnity". Williams continues as follows (ibid.,
n. 1): "It is convenient to take 'contribution' to include indemnity, and the word is so
used in the Tortfeasors Act. Some judges and writers, however, treat them as distinct;. . .
It is frequently convenient to speak of 'contribution or indemnity,' here using the word
contribution in the narrower sense".

With respect to the power of a court to order 100%, or no, contribution, see Draft
Act, s. 9(2).

See Draft Act, s. 7(3).

the person sustaining the loss is designated as "P"; the person against whom
P may have a cause of action in respect of that loss, and who claims
contribution, is designated as "Dl"; and the person against whom P may
have a cause of action for the loss, and against whom Dl claims contribu-
tion, is designated as "D2".

The Commission wishes to express its gratitude to the Project Director,
Professor John M. Evans, of Osgoode Hall Law School, York University.
Professor Evans' deep understanding of this difficult and important area of
the law is evident throughout this Report, and his cooperation and patience
during all stages of the Project is most sincerely appreciated. We also wish to
record our thanks to Professor Stephen M. Waddams and Professor J. Bruce
Dunlop, both of the Faculty of Law, University of Toronto, for their
preparation of material relating to the effect of a plaintiff's contributory
fault on the liability of single and concurrent wrongdoers.

In order to understand more fully the debate concerning in solidum
liability, we commissioned a research paper from Professor George L. Priest,
the John M. Olin Professor of Law and Economics, Yale Law School. In
March, 1987, the Commission met to discuss the paper and, more generally,
to consider the question whether the current rule of in solidum liability
should be abolished or modified. The Commission was greatly assisted by
the participation of a number of prominent academics in the field of tort
law, to whom we wish to express our appreciation. These participants were
Professor Priest; Professor Marc Galanter, of the School of Law, University
of Wisconsin; Professors Michael J. Trebilcock, Stephen M. Waddams, and
Ernest J. Weinrib, of the Faculty of Law, University of Toronto; and the
Project Director, Professor John Evans.

Finally, the Commission wishes to acknowledge the invaluable contri-
bution of Mr. Arthur N. Stone, Q.C., former Senior Legislative Counsel for
Ontario. Mr. Stone drafted the Commission's proposed Contribution and
Comparative Fault Act.

Recommendation

The Commission makes the following recommendation:

The Negligence Act should be repealed and a new Contribution and
Comparative Fault Act should be enacted to deal comprehensively with the
rights and obligations, as between themselves, of concurrent wrongdoers,
the rights of the injured person vis-a-vis such wrongdoers, and the effect of
the injured person's contributory fault on the issue of liability.

CHAPTER 2

JOINT AND SEVERAL
LIABILITY

1. INTRODUCTION

While "[t]he modern tendency has been to assimilate to a considerable
extent the position of joint tortfeasors and several tortfeasors whose acts
concur to produce the same damage, . . . some differences remain". • This
chapter describes the characteristics of joint concurrent wrongdoers and
several concurrent wrongdoers, whether the damage was caused by a tort, or
a breach of contract or trust, or some combination. It then discusses the
essential differences between these two classes of concurrent wrongdoers,
and proposes recommendations for reform.

In the following section, we begin with an examination of the law
pertaining to joint and several tortfeasors. It bears noting at the outset that
the law in this area, as well as the law relating to concurrent contract
breakers, is dominated almost exclusively by common law principles. Until
recently, few legislative inroads have been made.

2. PRESENT LAW

(a) Joint Tortfeasors and Several Tortfeasors

At common law, two or more tortfeasors whose conduct has caused
damage to another person may be concurrently liable (either jointly or
severally) or non-concurrently, and therefore only severally, liable. Glanville
Williams, the leading commentator on concurrent wrongdoing, describes
these three classes of tortfeasors as follows:^

The term 'joint tortfeasor' is, in essence, well understood. Two or more
tortfeasors are joint tortfeasors (a) where one is the principal of or vicariously
responsible for the other, or (b) where a duty imposed jointly upon them is not
performed, or (c) where there is concerted action between them to a common
end. Except in the case of nonfeasance in breach of a joint duty, parties cannot
be joint tortfeasors unless they have mentally combined together for some
purpose.

' Williams, Joint Torts and Contributory Negligence (1951), at 1.
2 Ibid.

[ 7 1

Where tortfeasors are not joint they are necessarily 'several', 'separate', or
'independent'. Several {i.e. separate or independent) tortfeasors are of two
kinds: several tortfeasors whose acts combine to produce the same damage, and
several tortfeasors whose acts cause different damage.

As indicated, this Report is concerned with the rights, as between
themselves, of concurrent tortfeasors— that is, persons whose conduct causes
a single loss to another; it is not concerned with non-concurrent, several
tortfeasors, whose acts produce different damage to the same individual.
Nevertheless, in order to highlight the nature of the liability of concurrent
tortfeasors, two essential differences between concurrent tortfeasors (both
joint and several), on the one hand, and non-concurrent, several tortfeasors,
on the other, should be noted. ^

First, each of two or more concurrent wrongdoers, whether joint or
several, is liable in solidum for the whole of the loss suffered by P."* However,
in the case of non-concurrent, several tortfeasors, whose acts have produced
different damage, each tortfeasor is liable to P only for the damage he has
caused. P's "total damage must therefore be apportioned between the
defendants" who are severally, but not concurrently, liable.^ Secondly,

Williams distinguishes between concurrent tortfeasors and others in the following way
{supra, note 1, at 3-4):

(1) Concurrent tortfeasors are, unlike other tortfeasors, liable in full for damage
done by all, and it does not matter whether the concurrence is joint or merely
several.

(2) Concurrent tortfeasors may generally be joined as co-defendants in an

action In proper circumstances other tortfeasors may similarly be joined; but

the general principle is that non-concurrent tortfeasors must be sued separately.

(3) Since concurrent tortfeasors are responsible for the same damage, satisfac-
tion by one discharges all This is not true for other tortfeasors.

(4) There is a certain right of contribution between concurrent tortfeasors, but
not generally between others

See Williams, ibid., at 1 and 5, discussing the common law position, and Negligence Act ,
R.S.0. 1980, c. 315, s. 2. See supra, ch. 1, note 4, and, in more detail, infra, ch. 3.

Williams, supra, note 1, at 20, and, generally, at 20-23.

The question whether several tortfeasors are or are not concurrently liable, and
therefore the question whether the damages can be divided, or apportioned, is one of
fact. It appears that no clear test as to when damages will be considered divisible has
been developed by either the courts or academic commentators in Britain, Canada, or
the United States. Fleming states that "[wjhether injury is susceptible to apportionment
seems to depend on pragmatic, rather than theoretical, considerations" (Fleming, The
Law of Torts (5th ed., 1977), at 187). Prosser and Keeton are of the view that the question
of divisibility of harm is not primarily one of causation, "but of the feasibility and
practical convenience of splitting up the total harm into separate parts which may be
attributed to each of two or more causes" (Dobbs, Keeton, and Owen (eds.), Prosser and
Keeton on the Law of Torts (5th ed., 1984) (hereinafter referred to as "Prosser and
Keeton"), at 345).

because concurrent tortfeasors are responsible for the same damage, satis-
faction by one discharges them all.^ Accordingly, as we shall see in chapter 4,
there may be rights of contribution between such wrongdoers. In the case of
non-concurrent, several wrongdoers, on the other hand, no issue of contri-
bution can arise, since neither defendant is legally responsible for the
damage caused by the other.

We now turn to the main focus of our discussion, the distinction
between joint and several concurrent tortfeasors. It will be recalled that the
essential difference between the two is that, while in both cases there is a
coincidence in the chain of causation leading to the same damage, in the
case of joint tortfeasors it has been said that generally there is, in addition,
some type of mental concurrence in some enterprise.^ The injured party has
the same cause of action against joint tortfeasors, but different, independent
causes of action against several, concurrent tortfeasors.

The distinguishing features of the three classes of joint (as opposed to
several) concurrent tortfeasors referred to by Williams, and reproduced
above, need not detain us unduly.^ The general principle of joint liability in
the context of vicarious liability, including principal and agent and master
and servant, has not created much difficulty, despite occasional authority to
the contrary. Nor has the notion that, where a breach of a statutory or other

Williams, neming, and Prosser and Keeton all rely on illustrative examples from
various cases to indicate in what circumstances finders of fact, whether judges or juries,
have determined that a certain damage is or is not divisible. Prosser and Keeton are less
than illuminating when they state that "[t]he distinction is one between injuries which
are reasonably capable of being separated, and injuries which are not" (ibid., at 314).
Nevertheless, Williams refers to the following illustration by Prosser of the notion or
process of divisibility (Williams, supra, note I, at 17, quoting from Prosser, Handbook of
the Law of Torts (1941), at 328):

If two defendants, struggling for a single gun, succeed in shooting the plaintiff,
there is no reasonable basis for dividing the injury, and each will be liable for all of
it. If they shoot him independently, with separate guns, and he dies, there can still
be no division, for death cannot be apportioned except by an arbitrary rule. If they
merely inflict separate wounds, and the plaintiff survives, a basis for division exists,
because it is possible to regard the two wounds as separate injuries. There will be
obvious difficulties of proof as to the apportionment of certain elements of
damages, such as physical and mental suffering and medical expenses, but such
difficulties are not insuperable, and it is better to attempt some rough division than
to hold one defendant [liable] for the wound inflicted by the other. Upon the same
basis, if two defendants each pollute a stream with oil, it is possible to say that each
has interfered to a separate extent with the plaintiff's rights in the water, and to
make some division of the damages. It is not possible if the oil is ignited, and burns
the plaintiff's barn.

Williams, supra, note 1, at 3, reproduced supra, note 3 (para. 3).

Williams states that "[e]xcept in the case of nonfeasance in breach of a joint duty, parties
cannot be joint tortfeasors unless they have mentally combined together for some
purpose" (supra, note 1, at 1).

See, generally, ibid. , at 6- 16.

duty imposed on two or more persons is a tort, the wrongdoers are joint
tortfeasors.^ However, difficulty has occasionally arisen in determining
whether there has been a joint purpose or "concerted action to a common
end",*^ and not merely "a coincidence of separate acts which by their
conjoined effect cause damage".'^

Williams indicates that concerted action to a common end means,
broadly speaking, a "conspiracy where all the conspirators are active in the
furtherance of the wrong". ^^ In a commonly cited case,'^ where the plaintiff
was set upon by three men, one of whom committed battery, one of whom
committed false imprisonment, and one of whom committed robbery, all
were held liable for the entire damage.

However, Williams cautions that the term "conspiracy" does not
necessarily mean that the tortfeasors realize they are committing a tort, let
alone that there be an express agreement to do so.^"^ An example of a joint
negligent tort would be a case in which two drivers are racing on a highway
and one driver kills a third person. Williams states that, under these
circumstances, the second driver "probably" would be liable for the damage
caused by the act of the first, even though the second driver had retained
control of the car at all times and injured no one. '^ Another commonly cited
example of a joint negligent tort involved a landlord and the landlord's
tenant, both carrying candles, looking for a gas leak. The tenant struck a
match, causing an explosion. The landlord and the tenant were held jointly
liable for the damage, since they were acting together and assisting each
other in attempting to locate the leak. ^^

^ Ibid., at 6-9.

^^ TheKoursk, [1924] P. 140, at 151, [1924] All E.R. Rep. 168 (C.A.) (subsequent reference is
to [1924] R).

^' //7/flf., at 160.

^^ Williams, supra , note 1, at 10. The principle appears to have been first stated in Heydon 's
Case (1612), 11 Co. Rep. 5a, 77 E.R. 1150, at 1151 (K.B.), where it was said that "all
coming to do an unlawful act, and of one party, the act of one is the act of all of the same
party being present".

^^ Smithson v. Garth (1691), 3 Lev. 324, 83 E.R. 711 (K.B.), cited by Williams, supra, note 1,
at 3. See, also, Fleming, supra, note 5, at 238, and Prosser and Keeton, supra, note 5, at
323.

^^ Williams, supra, note 1, at 10.

^^ Ibid., at 13. See McDonald v. Dalgleish, [1973] 2 O.R. 826, 35 D.L.R. (3d) 486 (H.C.J.).

'^ Brooke v. Bool, [1928] 2 K.B. 578. For a recent example, see Bushell v. Hamilton (1980),
39 N.S.R. (2d) 691, 113 D.L.R. (3d) 498 (S.C, App. Div) (defendants liable as joint
tortfeasors for damage caused by a fire lit in the course of a joint venture). See, also,
Beecham v. Henderson and Houston, [1951] 1 D.L.R. 628 (B.C.S.C.); Harpe v. Lefebvre,
Belcourt and Meunier (1976), 1 C.C.L.T. 331 (Alta. Dist. Ct.); and Q. v. Minto Manage-
ment Ltd (1985), 49 O.R. (2d) 531 (H.C.J.), at 543-44, aff'd (1986), 57 O.R. (2d) 781
(C.A.).

Other examples, involving various kinds of tort, may, of course, be
given. Suffice it here to repeat Williams' conclusion that, "at the present day
there is no tort that is incapable of being committed jointly".'^

More frequently, however, tortfeasors who cause the same damage are
only severally liable to the injured person. For example, an infant (P) is run
down in the street by a car negligently driven by Dl, at a time when D2 (P's
nursery school teacher) had negligently allowed P to wander out of the
nursery premises. Or, P, a passenger in Dl's car, is injured in an automobile
collision caused by the negligence of Dl and the driver of the other vehicle,
D2.

At common law, four important legal and practical consequences flow
from the distinction between joint and several concurrent liability. These
may be summarized as follows: (1) judgment against one joint tortfeasor
bars any action against the other joint tortfeasors (the "judgment bar rule");
(2) release of, or accord with, one joint tortfeasor discharges the others (the
"release bar rule"); (3) where joint tortfeasors are sued together, only one
judgment can be given against them, and damages cannot be severed or
apportioned (the "single judgment rule"); and (4) joint tortfeasors, but not
several, concurrent tortfeasors, may be joined in a single action as co-
defendants. As we shall see, all but the single judgment rule have been
superseded by section 149 of the Courts of Justice Act, 1984 J^

We turn first to the judgment bar rule. It should be noted that the
rationale of the rule, first established in Brinsmead v. Harrison , '^ was not
that P would otherwise recover twice for a single loss. The rule barred P
from suing D2, even though the defendant who had been sued (Dl) turned
out to be insolvent and the judgment in P's favour was not satisfied. The
rationale of the rule was that P had a single cause of action against joint
tortfeasors, which merged in the judgment. Indeed, the judgment bar rule
could prevent P from recovering anything at all. On the other hand, if Dl
and D2 were only several, concurrent tortfeasors, P could proceed against
D2 and recover from D2 the balance of any loss that P was unable to secure
when judgment was executed against Dl.

Prior to the enactment of section 149 of the Courts of Justice Act,
1984,^^ discussed below, the rule in Brinsmead v. Harrison had been
modified in some respects by the former Ontario Rules of Practice.^^ Rule

^^ Williams, supra, note 1, at 14.

'^ Courts of Justice Act, 1984, S.O. 1984, c. 11.

•^ (1872),L.R.7C.P547(Ex.).

^^ Supra, note 18.

2' R.R.O. 1980, Reg. 540.

54^^ of the Rules of Practice enabled a plaintiff to sign default judgment
without prejudice to his right to proceed against any other defendant. Rule
65^^ of the Rules of Practice provided that, on any motion for judgment,
judgment could be awarded against any defendant without prejudice to the
plaintiff's right to proceed against another.

However, these provisions in the former Rules of Practice far from
exhausted the possible effects of the rule in Brinsmead v. Harrison?'^ For
example, it was unclear whether the Rules enabled the plaintiff to proceed
against a joint tortfeasor who was not a party to the proceedings when the
default judgment or motion for judgment was obtained. In addition, since
Rule 54 required that the writ be specially endorsed, it would not avail the
victim of a breach of contract or tort. Nor would Rule 65 assist a plaintiff
suing for unliquidated damages where the plaintiff could secure a judgment
only after trial.

A second consequence at common law of characterizing the liability of
concurrent tortfeasors as joint, rather than merely several, was that if P
settled his claim against Dl and released him, this had the effect of releasing
any others who might be joint tortfeasors with Dl. Even though the amount
paid to P under the release was less than the damage that P had suffered, P
would be unable to maintain an action for the balance against the other joint
tortfeasors. The explanation for this rule that was given in the earlier cases
was that the release was regarded as a "satisfaction in law", although later
cases also relied upon the notion that, since the cause of action was single,

Rule 54 provided as follows:

54. Where the plaintiff is entitled to sign default judgment, the judgment may
be signed notwithstanding that the writ may be endorsed with any other claim and
any such judgment shall be without prejudice to his right to proceed against any
other defendant for the same relief or against any defendant for any other relief.

This Rule did not apply when the liability of the defendants was alternative rather than
joint and several: Kohn v. Devon Mortgage Ltd. (1983), 3 D.L.R. (4th) 466 (Alta. Q.B.),
interpreting a similar provision in the Alberta Rules of Court (R. 148).

Section 149(1) of the Courts of Justice Act, 1984, supra, note 18 (discussed infra,
this sec), made former R. 54 redundant. New r. 19.08 of the Rules of Civil Procedure, O.
Reg. 560/84, simply preserves the plaintiff's right to proceed against the same defend-
ant for any other relief where a default judgment has been obtained against the
defendant.

Rule 65 provided:

65. On any motion for judgment, judgment may be awarded against any
defendant and any such judgment shall be without prejudice to the plaintiff's right
to proceed against any other defendant for the same relief or against any defendant
for any other relief.

The new Rule corresponding to former R. 65— r. 20.07 of the Rules of Civil
Procedure, supra, note 22— provides that "[a] plaintiff who obtains summary judgment
may proceed against the same defendant for any other relief".

Supra, note 19. For examples of the operation of these rules, see Capital Carbon and
Ribbon Co. Ltd. v. West End Bakery, [1948] O.W.N. 815 (C.A.), and G. Solway & Sons
Ltd. V. Pearlman andEzrin, [1964] 1 O.R. 1 (H.C.J.).

when it was barred against one it was barred against all. Interestingly,
however, a mere settlement of P's claim against Dl, without a release, did not
bar subsequent proceedings against D2.

The potential for injustice of the common law rule respecting releases
could, however, be mitigated. Thus, it is clear that if the release contained an
express reservation of P's rights against other joint wrongdoers, P's action
against them was not barred. And if the court construed the transaction
between P and Dl as a release of Dl alone, this would not release the other
joint tortfeasors.^^ In either event, D2's liability to compensate P was
reduced by the amount that P received from Dl.

A settlement of a joint liability made in one of these ways would
therefore have the same effect as either a release, with or without an express
reservation of rights against others, or a covenant not to sue, made between
P and one of merely several, rather than joint, tortfeasors; that is, this type of
settlement would not in fact bar an action against the other concurrent
wrongdoer. When a settlement was made between the injured person and
one concurrent wrongdoer in a way that did not bar an action against
another, the settling wrongdoer would normally seek an indemnity from the
injured person against any liability to pay contribution to any concurrent
wrongdoer who was held liable for the plaintiff's loss.

The common law rule that an action against the remaining joint
tortfeasors was barred by a release of one was thus easily avoided in most
cases where the injured person received proper legal advice. Over the years,
it had become little more than a technical trap for the unwary, and was
criticized by Lord Denning M.R. His Lordship concluded that the courts
should abandon the rule that a release barred further action, where this was
not what the parties intended and the plaintiff had not been fully satisfied.^^

We wish to note one apparently anomalous situation concerning the
distinction between joint and several concurrent tortfeasors. This con-
cerned the effect of a plaintiff's acceptance of a payment into court made by
one of many defendants to an action. In such a situation, it has been held in
cases like Reaney v. National Trust Co. ^"^ that the plaintiff's action against
the non-paying defendants should be dismissed, whether their concurrent

^^ See, for example, Dixon v. The Queen in right of British Columbia (1979), 12 B.C.L.R.
1 10, 99 D.L.R. (3d) 652 (S.C), aff'd (1980), 24 B.C.L.R. 382, 128 D.L.R. (3d) 389 (C.A.)
(subsequent reference is to 99 D.L.R. (3d)).

26 Bryanston Finance Ltd. v. de Vries, [1975] Q.B. 703, at 723, [1975] 2 All E.R. 609 (C.A.)
(subsequent reference is to [1975] Q.B.).

2^ Reaney v. National Trust Co. , [1964] 1 O.R. 461, 42 D.L.R. (2d) 703 (H.C.J.). See, also,
Cassimjee v. Jarrett (1975), 8 O.R. (2d) 726, 59 D.L.R. (3d) 174 (H.C.J.).

The reasoning in these cases has been trenchantly criticized: see Teplitsky and
Gomberg, "Acceptance of Money Paid into Court by One of Several Defendants:
Lawyer Beware" (1977-78), 1 Advocates' Q. 123. An English case, Beadon v. Capital

liability was joint or merely several. Accepting the payment was deemed to
satisfy the plaintiff's claim against all the defendants to the action, even
though the sum might not fully compensate the plaintiff for his recoverable
loss. One possible explanation was that the terms of the payment indicated
that it was intended to be in satisfaction of the plaintiff's action against the
payor and all other defendants. However, since the plaintiff wished to
proceed against the non-paying defendants, it must be at least doubtful
whether a total satisfaction of all the plaintiff's claims was intended.

An important change to the common law respecting the judgment bar
rule and the release bar rule was effected in 1984 by the Courts of Justice Act,
1984?^ Section 149(1) of the Act provides as follows:^^

149.— (1) Where two or more persons are jointly liable in respect of the same
cause of action, a judgment against or release of one of them does not preclude
judgment against any other in the same or a separate proceeding.

Section 149(1) has the effect of abrogating the judgment bar rule and the
release bar rule, both of which prejudicially affected plaintiffs who success-
fully sued or released one of several joint wrongdoers.^^

In order to discourage an injured person, who may have claims against
two or more persons for the same damage, from bringing unnecessary
multiple proceedings, section 149(2) of the Act provides as follows:

149.— (2) Where a person who has suffered damage brings two or more
proceedings in respect of the damage, the person is not entitled to costs in any of
the proceedings, except the first proceeding in which judgment is obtained,
unless the court is of the opinion that there were reasonable grounds for
bringing more than one proceeding.

It should be noted that the "single award of costs" rule applies irrespective of
whether the defendants' liability is joint or merely several.

Syndicate (Ltd.) (1912), 28 T.L.R. 394 (K.B.), aff 'd 28 T.L.R. 427 (C.A.), relied upon in
Reaney, apparently concerned the joint liability of the defendant for the tort of
conspiracy. But its relevance to a case where the defendants' liability is merely several is
highly dubious. Moreover, the money paid into court was the amount claimed by the
plaintiff in her action; therefore, its acceptance may well have satisfied in full the
plaintiffs' claims against all the defendants.

2^ Supra, note 18.

2^ See Royal Bank of Canada v. Metcalfe (1985), 3 C.P.C. (2d) 228 (Ont. Dist. Ct.).

With respect to the effect of s. 149 on the payment into court rule enunciated in Reaney
V. National Trust Co. , supra, note 27, see discussion infra, this ch., sec. 4(a).

It bears noting here that the repeal of the common law rule by s. 149 of the Courts
of Justice Act, 1984 is not restricted to joint liability in tort, but includes any case in
which the plaintiff has a "single cause of action" against two or more persons. See infra,
this ch., sec. 2(b).

A third consequence at common law of characterizing concurrent
tortfeasors as joint, rather than merely several, and one that was not
addressed by section 149 of the Courts of Justice Act, 1984, is that only a
single award of damages may be made in respect of a loss or debt for which
two or more defendants are jointly liable. Where, today, such defendants are
pursued in separate proceedings, the plaintiff is restricted to the maximum
damages awarded in the first action in which judgment was obtained.
Where jointly liable defendants are sued together, only one judgment is
possible and, therefore, the award of damages can only be for a single sum.
Thus, if D2 is liable to pay punitive damages to P, but Dl is not, judgment
must be entered for the lowest common figure for which both are liable.^'

Since, as a result of section 149, joint tortfeasors can now be sued in
successive actions, a plaintiff must calculate whether it is in his interest to
commence proceedings against joint tortfeasor Dl, who may be liable to pay
punitive damages, but whose liability may be more difficult to establish or
whose ability to satisfy a judgment against him may be dubious. On the
other hand, P may conclude that, even though D2 will be liable to pay a
smaller sum, his liability is easy to establish and his ability to pay beyond
doubt. No such quandary faces the person who has been injured by
tortfeasors who are severally liable: separate assessments can be made
against different tortfeasors, and they can be sued in successive actions.

The final consequence of the distinction between the two classes of
concurrent tortfeasors was that, at common law, joint tortfeasors could, but
need not, be joined by the injured party as co-defendants in the same
action. ^2 While joint tortfeasors could be sued separately, several concurrent
tortfeasors had to be sued separately, although, as we have seen, they too
were liable to the plaintiff /« solidum}^

The rule prohibiting joinder of several concurrent tortfeasors applied in
Ontario until 1913. Under Rule 186 of the 1897 Consolidated Rules of
Practice and Procedure,^"^ it was held that, for concurrent tortfeasors to be

^' Cassell& Co. Ltd. v. Broome, [1972] A.C. 1027, at 1062-64, [1972] 1 All E.R. 801 (H.L.),
and Bryanston Finance Ltd. v. de Vries, supra, note 26, at lll-ll).

^^ Williams states that the common law rule respecting the joinder of several tortfeasors
has gone through a "curious evolution" {supra, note 1, at 51). He notes that while,
theoretically, the rule has always been that several tortfeasors could not be sued in the
same action, there did develop a line of cases that allowed a plaintiff to succeed in his
action, and to recover separate, apportioned damages against each of the several
tortfeasors, if the plaintiff believed or alleged in his writ (although erroneously) that the
defendants were in fact joint tortfeasors. However, the decision of the House of Lords in
Sadler v. The Great Western Railway Co., [1896] A.C. 450 (H.L.), reaffirmed the
original rule that claims for damages against two or more defendants, in respect of their
liability for separate, concurrent torts, could not be joined in one action.

^^ Williams, supra, note 1, at 51.

'^^' See Holmested and Langton, The Judicature Act of Ontario and the Consolidated Rules
of Practice and Procedure of the Supreme Court of Judicature for Ontario (2d ed., 1898),
at 307-08.

joined, "however numerous the defendants, there must be only one claim
for relief, based on one injuria in which all are alleged to be implicated". ^^

In 1913, the Consolidated Rules of Practice and Procedure were
amended,^^ replacing former Rule 186 with Rule 67, which provided as
follows:

67.— (1) Where the plaintiff claims that the same transaction or occurrence,
or series of transactions or occurrences, give him a cause of action against one
or more persons, or where he is in doubt as to the person from whom he is
entitled to redress, he may join as defendants all persons against whom he
claims any right to relief, whether jointly, severally, or in the alternative; and
judgment may be given against one or more of the defendants according to their
respective liabilities.

(2) The court may order separate trials or make such other order as may be
deemed expedient, if such joinder is deemed oppressive or unfair.

Rule 67 remained essentially unaltered^^ until replaced in 1984 by rule
5.02(2) of the current Rules of Civil Procedure.^^ Rule 5.02(2) provides as
follows:

5.02(2) Two or more persons may be joined as defendants or respondents
where,

(a) there are asserted against them, whether jointly, severally or in the
alternative, any claims to relief arising out of the same transaction or
occurrence, or series of transactions or occurrences;

(b) a common question of law or fact may arise in the proceeding;

(d) damage or loss has been caused to the same plaintiff or applicant by
more than one person, whether or not there is any factual connection
between the several claims apart from the involvenient of the plaintiff

^^ Vachon v. Crown Reserve Mining Co. (1910), 2. O.W.N. 378 (Master S.C.O.), at 379. See,
also, Hinds v. The Corp. of the Town ofBarrie (1903), 6 O.L.R. 656 (C.A.).

It bears repeating here that, in the case of several concurrent tortfeasors, the
""damnum is single, but each commits a separate injuria'' (Williams, supra, note 1, at
16).

^^ See Holmested, The Judicature Act of Ontario and the Consolidated Rules of Practice
and Procedure of the Supreme Court of Judicature for Ontario (4th ed., 1915), at 419. See,
generally, Gale and Mintah (eds.), Holmested and Gale on the Judicature Act of Ontario
and Rules of Practice (Annotated) (1983), at 873-82.

^^ The word "deemed" was deleted and the word "considered" substituted: see ibid., at
873.

^* 5M/7ra, note 22.

or applicant, and there is doubt as to the person or persons from
whom the plaintiff or applicant is entitled to relief or the respective
amounts for which each may be liable; or

(e) it appears that their being joined in the same proceeding may pro-
mote the convenient administration of justice.

Rule 5.02(2) simplifies the language of former Rule 67 and broadens
somewhat the right to join parties in a single action. ^^

The purpose of former Rule 67 and present rule 5.02(2) was and is
procedural convenience:"^^

[Rule 67] was introduced to get over the difficulties and inconveniences found

in the old practice [N]ow, if the same series of transactions, etc., gives a cause

of action against more than one, they can all be sued in the same action, though
the causes of action be not the same.

It is not necessary that each cause of action should be identical; several
wrongdoers liable for distinct damages can be joined, since "[t]he object of
the rule is to avoid, if possible, the expense and delay of bringing two actions,
if relief without inconvenience, expense or embarrassment can be given in
one action".'*' Claims sounding in contract and in tort can be joined where
they arise from the same transaction or occurrence or series of transactions
or occurrences.'*^

As we have said, joinder of defendants at common law was permissive,
not mandatory.'*^ At common law, a plaintiff could choose to sue joint
tortfeasors severally, subject to the single judgment rule, discussed above.
This permissive joinder was not changed by rules 67 or 5.02(2), and a

^^ It should also be noted here that the court appears to have an expanded power under
current r. 5.03 to join persons who have not been joined by the parties. Rule 5.03(1) of
the Rules of Civil Procedure, supra, note 22, provides that "[e]very person whose
presence is necessary to enable the court to adjudicate effectively and completely on the
issues in a proceeding shall be joined as a party to the proceeding". In addition, r. 5.03(4)
provides that "[tjhe court may order that any person who ought to have been joined as a
party or whose presence as a party is necessary to enable the court to adjudicate
effectively and completely on the issues in the proceeding shall be added as a party".
Conversely under the Rules of Civil Procedure, the court retains a discretion to sever
joinder of parties where joinder is "required" under R. 5 (r. 5.03(6)) or "[w]here it
appears that the joinder of multiple claims or parties in the same proceeding may
unduly complicate or delay the hearing or cause undue prejudice to a party" (r. 5.05).

'*0 Campbell Flour Mills Co. Ltd. v. Bowes (1914), 32 O.L.R. 270 (App. Div), at 282.

"*' Canadian Steel Corp. Ltd. v. Standard Lithographic Co. Ltd. , [1933] O.R. 624 (C.A.), at
630.

"^2 Tellier v. Bank of Montreal (1982), 32 C.PC. 17 (Master S.C.O.).
"^^ Williams, supra, note 1, at 50 and 53.

plaintiff can pursue joint or several concurrent tortfeasors severally if he
chooses to do so, provided that the successive actions are not vexatious or an
abuse of the court's process."^"* However, as indicated earlier, pursuing
separate actions may now have significant costs consequences, as a result of
section 149(2) of the Courts of Justice Act, 1984 J^^

In connection with the distinction between joint and several concur-
rent tortfeasors, now (as we have seen) rendered irrelevant in Ontario except
in one particular, one further point should be made. It has been suggested
that section 2 of the Negligence Act,^^ first enacted in 1930,'^'' makes all
concurrent wrongdoers joint wrongdoers. Section 2 provides as follows:

(2) 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.

If section 2 does, in fact, transform several concurrent wrongdoers into
joint concurrent wrongdoers, then, prior to the legislative changes described
earlier, a plaintiff who released or obtained judgment against one concur-
rent tortfeasor would be barred from proceeding against another, even
though at common law their liability was merely several, and not joint. The
latter argument was made in Reaney v. National Trust Co. ^^ and apparently
rejected. In Dodsworth v. Holt,^^ the similarly worded Alberta statute was
held not to have made all concurrent tortfeasors jointly liable, in the sense
that a release of one barred the plaintiff's action against other concurrent
defendants who, at common law, would have been severally liable to the
plaintiff.

The argument that section 2 turns all concurrent tortfeasors into joint
tortfeasors, thereby prejudicing plaintiffs injured by the acts of concurrent

"^ Ibid., at 53. See Thomson v. Lambert, 11938] S.C.R. 253, [1938] 2 D.L.R. 545.

'^^ Supra, note 18. While there was no equivalent express costs sanction to discourage a
multiplicity of actions under the former Rules of Practice, supra, note 21, such a power
may have been exercised under the court's general discretion as to costs: Williams,
supra, note 1, at 53, and Standard Industries Ltd. v. E-F Wood Specialties Inc. (1977), 16
O.R. (2d) 398 (H.C.J.).

^^ Supra, note 4.

^ Section 2 first appeared, in slightly different form, as s. 3 of The Negligence Act, 1930,
S.O. 1930, c. 27. This legislation created a right of contribution among concurrent
wrongdoers.

^* Supra, novt 21.

"^^ (1964), 44 D.L.R. (2d) 480, 47 W.W.R. 243 (Alta. S.C, T.D.). See, also, Dixon v. The
Queen in right of British Columbia, supra, note 25, at 661.

tortfeasors who are merely severally liable, does not appear to have been
accepted in any reported Ontario judgment, although it is noted by Williams
as a possible, although unfortunate, effect of the wording of that section. ^^ In
any event, the argument has, as we have seen, been rendered largely
academic by the enactment of section 149 of the Courts of Justice Act, 1984^^
and by the Rules of Civil Procedure,^^ especially rule 5.02(2). Its relevance is
now confined to the one remaining consequence of the distinction between
joint and several concurrent tortfeasors, namely, the single judgment rule.

With respect to the somewhat confusing language of section 2 of the
Negligence Act, Williams states that the "intention [of legislation like
section 2] was merely to declare that the liability of concurrent tortfeasors is
in solidum, and no operation should be given to the legislation beyond
this".^^ As noted earlier in this chapter and in chapter 1, each concurrent
wrongdoer is liable in solidum for the whole of the plaintiff's loss, as if no
other wrongdoer existed, whether the concurrent wrongdoer is jointly liable
or merely severally liable. The provision in section 2 that concurrent
wrongdoers are "jointly and severally liable" likely reflects the not uncom-
mon use of that phrase, both in the past and today, to mean liability in
solidum.

(b) Joint Contractors and Several Contractors

At common law, many of the consequences of joint liability in tort
appUed equally to defendants who were joint promisors. Thus, in Kendall v.
Hamilton, ^"^ the House of Lords held, by analogy with the rule for joint
tortfeasors, that judgment against one joint promisor barred P from suing
the others. Similarly, a release of one joint promisor released the others. This
latter proposition was examined in Canadian Imperial Bank of Commerce
V. Vopni,^^ where a release effected with the knowledge and consent of the
other promisors, who were sureties, was held not to bar recovery. Nonethe-
less, the continued vitality of the release bar rule was not doubted.

In addition, these same common law rules respecting joint liability in
contract generally applied as well to what is called "joint and several"
liability, an intermediate category of liability in contract between joint

^^ Williams, supra, note 1, at 5-6. See, also, Cheifetz, Apportionment of Fault in Tort (1981),
at 8 and 20.

^^ Supra, note 18.

^^ Supra, note 22.

^^ Williams, supra, note 1, at 6. Cheifetz also uses the "jointly and severally liable"
language (supra, note 50, at 8).

5^* (1879), 4 App. Cas. 504, 3 CRD. 403 (H.L.).

55 (1978), 86 D.L.R. (3d) 383, 11978] 4 W.W.R. 76 (Man. Q.B.).

liability and purely several liability. ^^ Accordingly, when contractors were
jointly and severally liable, the cause of action might be extinguished in the
safne circumstances as it would have been if they had been only jointly
liable. Consequently, the release of one released the others.^^ However, the
liability of trustees, which is also joint and several, was not barred by a
judgment against or a release of one.^^

It will be recalled that section 149(1) of the Courts of Justice Act, 1984^^
abolished the common law judgment bar and release bar rules "[w]here two
or more persons are jointly liable in respect of the same cause of action".
Accordingly, the repeal of the judgment bar and release bar rules is not
restricted to joint liability in tort, but extends, for example, to joint debts
and joint liability (as well as "joint and several" liability) for breach of
contract. Moreover, the single award of costs rule in section 149(2) applies
irrespective of the legal basis of the liability, so long as the plaintiff has
suffered "damage".

3. REFORM AND PROPOSALS FOR REFORM IN OTHER
JURISDICTIONS

In addition to the recent reform in Ontario, various aspects of the
common law relating to joint liability have attracted attention in other
jurisdictions. For instance, in the United Kingdom, the Law Reform (Mar-
ried Women and Tortfeasors) Act, 1935^^ abolished the judgment bar rule
for joint tortfeasors. However, in order to discourage unnecessary litigation,
where a plaintiff had sued concurrent tortfeasors (whether their liability was
joint or merely several) in separate proceedings, the Act provided that costs
would not be awarded to the successful plaintiff in any suit brought after he
had obtained judgment against one defendant, unless there were reasonable
grounds for his failure to join the defendants in one action.^* Moreover, a
plaintiff could not be awarded damages in subsequent proceedings that
exceeded in aggregate the sum awarded to the plaintiff in the first action.^^

The 1935 Act was amended by the Civil Liability (Contribution) Act
1978.^^ The first change effected by the 1978 legislation abolished the rule

^^ Williams, Joint Obligations (1949), ch. 1, esp. at 33-41.

^^ Ibid., at 135-37. However, whether judgment against one promisor bars the action
against other co-promisors is less clear {ibid., at 103-04).

^^ Ibid., at 159-60.

^^ Supra, note 18.

^^ Law Reform (Married Women and Tortfeasors) Act, 1935, c. 30, s. 6(1 )(a).

^' Ibid., s.6{\){b).

^2 Ibid.

^^ Civil Liability (Contribution) Act 1978, c. 47.

limiting the maximum amount of damages recoverable in subsequent
proceedings.^'* This was partly because the reason for its inclusion in the
1935 Act— namely, the fear that plaintiffs might be encouraged to sue
defendants separately in the hope of obtaining a greater sum from another
jury— had largely disappeared, presumably as a result of the virtual elimina-
tion in England of jury trials in civil litigation.

The second change made by the 1978 Act extended the abolition of the
judgment bar rule by enabUng P, even though he has obtained judgment
against Dl, to sue "any other person who is (apart from any such bar) jointly
liable with him in respect of the same debt or damage".^^ While, under the
1935 Act, the judgment bar rule was abolished in respect of joint liability for
damages in tort, the rule is now effectively abolished for all causes of action
for damages and debt.

Thirdly, the costs sanction contained in the 1935 Act was extended to all
actions in respect of the same debt or damage brought successively against
concurrent wrongdoers. However, costs may still be awarded where the
court is of the opinion that it was not unreasonable to bring more than one
action. ^^

The judgment bar rule has also been abolished in most jurisdictions in
the United States, although some states limit the amount that the plaintiff
may recover in subsequent litigation to the sum awarded in the first suit.^^

The Irish Civil Liability Act, 1961^^ allows all concurrent wrongdoers
to be sued in separate proceedings, but, like the English Act of 1935, provides
that damages awarded in subsequent proceedings may not exceed the sum
awarded in the first action, and that a plaintiff who had no reasonable
ground for instituting more than one action is not entitled to costs in a
subsequent action.^^

^^ Section 6(l)(b) of the Law Reform (Married Women and Tortfeasors) Act, 1935, supra,
note 60, was repealed by s. 9(2) of the Civil Liability (Contribution) Act 1978, supra,
note 63. See, now, s. 4 of the 1978 Act. For a similar proposal, see New Zealand,
Contracts and Commercial Law Reform Committee, Working Paper on Contribution in
Civil Cases i\9S3), at 2\-22.

^^ Supra, note 63, s. 3. The Privy Council has held that the abolition extended to a
situation where P sued Dl and D2 in a single action and obtained judgment first against
Dl: Wah Tat Bank Ltd v. Chan Cheng Kum, [1975] A.C. 507, [1975] 2 All E.R. 257
(PC).

^^ See s. 4 of the 1978 Act, supra, note 63. See, also, the similar recommendations of The
Law Reform Commission of Hong Kong in its Report on the Law Relating To
Contribution Between Wrongdoers, Topic 5 (1984), paras. 9.1-9.2, at 45.

^^ See Prosser, supra, note 5, at 330-32.

^^ Civil Liability Act. 1961, No. 41.

^^ Ibid.,s. 18(l)(b).

The rule has also been abolished in some Canadian provinces, includ-
ing Alberta^^ and Manitoba,^' and in a number of other Commonwealth
jurisdictions.^^ The Uniform Contributory Fault Act, adopted by the Uni-
form Law Conference of Canada in 1984^^ abolishes the judgment bar rule
in respect of damages (although not debt)7^ subject to the two limitations
contained in the English Act of 1935, namely, that costs may be awarded to
the plaintiff only in the first action,^^ and that the plaintiff may not obtain
judgment against concurrent wrongdoers for an amount that exceeds the
damages awarded against another who is concurrently liable with them.^^

By way of contrast, the release bar rule has received less legislative
scrutiny. It has remained untouched by statute in the United Kingdom,
although the Rules of the Supreme Court provide that in an action for
defamation against defendants who are allegedly jointly liable, a plaintiff
who accepts a payment into court by a defendant is not thereby barred from
pursuing other joint wrongdoers, whose liability is reduced pro tanto by the
amount so accepted.^^ However, the rule has been abolished in the Republic
of Ireland by section 17 of the Civil Liability Act, 1961,^^ as it has been in
Tasmania^^ and most jurisdictions in the United States.^^ In Canada, the
Alberta Institute of Law Research and Reform has recommended that a
release should not bar action against joint tortfeasors,^* and the Uniform
Contributory Fault Act also contains a provision abolishing the release bar
rule.^^

"^^ The Tort-FeasorsAct, R.S.A. 1980, c. T-6,s. 3(l)(a),issimilartotheEnglish Actof 1935,
supra, note 60.

^' The Tortfeasors and Contributory Negligence Act, R.S.M. 1970, c. T-90, s. 3(l)(a).

^^ See Fleming, supra, note 5, at 240, n. 30.

^^ Uniform Law Conference of Canada, Proceedings of the Sixty-Sixth Annual Meeting
(1984), Appendix F, Uniform Contributory Fault Act, s. 15(b).

^^ Ibid., s. 15(b).

^5 Ibid,s. 16(2).

^^ Ibid.,s. 16(1).

^^ R.S.C. 1965, O. 82, r. 4. In other instances of joint liability, acceptance of a payment by
one party stays proceedings against the others: R.S.C. 1965, O. 22, r. 3(4).

^^ Supra, note 6S.

^^ Tortfeasors and Contributory Negligence Act 1954, No. 4 of 1954, s. 3(3). This Act may
be found in Tasmanian Statutes 1826-1959 (Reprint), Vol. 6.

^^ Prosser and Keeton, supra, note 5, at 301-05. See, also. National Conference of
Commissioners on Uniform State Laws, Uniform Comparative Fault Act, Uniform
Laws Annotated, Vol. 12 (1987 Pocket Part), §6. The Act was approved by the Commis-
sioners in 1977.

^' Alberta, Institute of Law Research and Reform, Contributory Negligence and Concur-
rent Wrongdoers, Report No. 31 (1979), at 27-30, recommendation 6. See, also, The Law
Reform Commission of Hong Kong, supra, note 66, paras. 4.8-4.9, at 17.

^2 Supra, note 73, s. 15(a).

4. CONCLUSIONS

(a) The Judgment Bar and Release Bar Rules and Offers
OF Settlement

When section 149 of the Courts of Justice Act, 1984 was enacted, the
Commission had already decided to recommend the abolition of the com-
mon law rules that prevented an injured person from suing a joint wrong-
doer or debtor simply because he had already obtained judgment against,
settled with, or released another who was jointly liable for the same damage
or debt. We are of the view that to distinguish so sharply between joint and
several liability for concurrent wrongdoers perpetuates a technical distinc-
tion from a much earlier pciiod in legal development and can lead to
injustice. The Commission had also decided that a costs sanction of the kind
now contained in section 149(2) should be imposed in order to discourage
the unnecessary institution of multiple litigation in respect of a single loss or
debt, and that it should apply irrespective of whether the liability was joint
or only several.

The Commission, therefore, welcomes the reforms that have been
effected by section 149 of the Courts of Justice Act, 1984, although we would
place the provisions dealing with joint liability, as amended in accordance
with the following recommendations, in the Commission's proposed Con-
tribution and Comparative Fault Act. The Commission agrees that the
abolition of the judgment bar and release bar rules should apply to both
joint debt and joint liability for wrongdoing, including breach of contract,
and recommends that the new Act so provide.^^

However, notwithstanding the recent statutory changes, a few points
may still be appropriately made. We deal first with settlements. In this
connection, we recommend that legislation should make it clear that, if a
person who settles with a concurrent wrongdoer or debtor expressly gives up
his right to sue any person who is liable for the damage or debt, he should
not subsequently be able to institute a proceeding in respect of the damage
or debt against a concurrent wrongdoer or debtor who was not a party to the
settlement.^"^

Where P does not expressly give up his right to proceed against the non-
settling concurrent wrongdoer, the law remains, in part, unclear. It will be
recalled that, at common law, a mere settlement with Dl, without a release,
did not preclude P from proceeding against D2. However, where P settled by
accepting money paid into court by Dl, it was held in Reaney v. National

^^ See the Commission's proposed Contribution and Comparative Fault Act (hereinafter
referred to as "Draft Act"), ss. 5(1) and 6. The Draft Act appears as an Appendix of this
Report.

^'^ Draft Act, s. 6.

Trust Co.^^ that P's action against the non-paying defendants should be
dismissed, whether the defendants were jointly or severally liable.^^

The effect of section 149(1) of the Courts of Justice Act, 1984 on the
payment into court rule enunciated in Reaney is problematic. Section 149(1)
is a rather narrowly circumscribed provision and refers, among other things,
to a release of a jointly liable wrongdoer. The payment into court rule
encompasses a somewhat different, although related, situation; under that
rule, no judgment has been obtained and no release has necessarily been
provided. Moreover, the payment into court rule precludes P from pursuing
any non-paying defendant, whether jointly or severally liable, whereas
section 149(1), even if otherwise relevant, removes a prohibition against only
joint wrongdoers, leaving severally liable co-defendants immune from suit
under the rule in Reaney.

The Rules of Civil Procedure^^ have been significantly recast in this
area, and provide for offers to settle, replacing, and to some extent
integrating,^^ the former payment into court rules. They are silent on the
problem considered in Reaney. ^^

The rule in Reaney is unsatisfactory in a number of respects if, and to
the extent that, it prevents the plaintiff from continuing his action against
the non-paying defendants, whether or not the terms of the payment
expressly exclude the plaintiff's suing the other defendants to judgment, and
whether or not the amount paid into court fully compensates the plaintiff
for his loss. First, it may discourage the plaintiff from accepting a payment
by one defendant in partial satisfaction: a plaintiff will not be able to accept
a defendant's estimate of his own share of the concurrent liability of the
defendants in the action if the plaintiff is thereby barred from continuing the
action against other co-defendants.

Secondly, it seems anomalous to bar a plaintiff who settles a claim by
accepting money paid into court by one defendant from proceeding against
the other defendants, when, today, neither a judgment against, a release of,
nor an out-of-court settlement with, one defendant has this effect (unless, in
the latter situation, this was clearly the parties' intention).^^ Thirdly, the rule

^^ Supra, note 27.

^^ See supra, this ch., sec. 2(a).

^"^ Supra, note 22, R. 49.

^^ Ibid., T. 49.07(3H4).

Although, to the extent that, under R. 49, a plaintiff may settle a claim by accepting
money paid into court by one joint co-defendant, and then release that defendant,
s. 149(1) of the Courts of Justice Act, 1984 may be invoked by the plaintiff to permit him
to proceed against the other, non-paying joint defendants.

A plaintiff to whom an offer to settle his own share of the liability is made by one
defendant could presumably preserve his right to proceed against the other defendants

does not operate fairly, for it is likely to prejudice only the plaintiff who is
unrepresented or who has not been properly advised of the consequences of
accepting money paid into court by one of many co-defendants.^'

The Commission is of the view that statutory reform is needed in this
area in order to clarify the law. Accordingly, we recommend that legislation
should abolish the rule in Reaney v. National Trust Co. and provide
expressly that an offer of settlement made pursuant to Rule 49 of the Rules
of Civil Procedure should be treated like any other settlement; that is, it
should not prevent the injured person from pursuing his claim against
others who may be concurrently liable to him in respect of the same loss,
unless, of course, the offer of settlement extends to any claim that the
plaintiff may have against other defendants.^^

Another aspect of the release bar rule, aside from the payment into
court anomaly considered above, concerns the release of concurrent debtors
(as opposed to wrongdoers). In this connection, the Commission is of the
view that section 149(1) of the Courts of Justice Act, 1984 may cast too wide
a net. We have in mind circumstances under which the release of one debtor
also releases security that that debtor has provided in respect of the debt,
where the release of the security would prejudice the other co-debtor by
preventing the latter from resorting to it. For the sake of fairness to the latter,
we recommend that a person who has released a debtor should be barred
from proceeding against any other joint or joint and several debtor^^ if the
release of the first debtor has prejudiced the second debtor.^"^

A third matter concerning the scope of section 149 of the Courts of
Justice Act, 1984 pertains to costs. Even though section 149(1) repeals the
judgment bar rule for all causes of action in respect of which two or more
persons are jointly liable, the costs sanction contained in section 149(2)
seems not to deal with cases in which the plaintiff has proceeded in separate

by proposing a settlement outside R. 49 of the Rules of Civil Procedure. The settling
wrongdoer would then cease to be a defendant, and the plaintiff could proceed against
the other defendants.

^' See Teplitsky and Gomberg, supra, note 27.

The relevant rules in force when these decisions were made were Rr. 306, 311, and
315 of the former Rules of Practice, supra, note 21. The analogous English Rules of the
Supreme Court have recently been held to prevent a continuation of the action against
those jointly liable or those sued in the alternative: Townsend v. Stone Toms & Partners
(a firm), [1981] 1 W.L.R. 1153, [1981] 2 All E.R. 690 (C.A.). The acceptance of payment
made by one defendant does not, however, bar the plaintiff from continuing the
proceedings against other defendants severally liable for the same loss.

^2 Draft Act, s. 6.

See discussion, supra, this ch., sec. 2(b).
^'* Draft Act, s. 6.

actions against concurrent debtors, since the latter provision applies only
where the plaintiff is a person who has suffered "damage". The Commission
therefore recommends that the costs sanction rule should apply to all cases
of concurrent liability for which the plaintiff institutes separate pro-
ceedings.^^

Finally, we wish to deal with the effect of the Federal Court Act,^^ which
has added a new complication to proceedings against joint wrongdoers. The
federal Crown can be sued only in the Federal Court, while servants of the
federal Crown must normally be sued in a court in a province.^^ As a result,
in most cases a person cannot sue the servant and the Crown in the same
proceeding. If, for example, judgment is obtained first against the servant,
who is unable to satisfy the judgment, proceedings against the Crown, on the
basis that it is vicariously and, therefore, jointly liable, will be barred, since
there is no equivalent in Federal Court proceedings to section 149(1) of the
Courts of Justice Act, 1984.

The Commission is of the view that the law in this area is anomalous
and ought to be reformed. Accordingly, we recommend that the Parliament
of Canada should be requested to enact legislation that would abrogate the
judgment bar and release bar rules respecting proceedings in the Federal
Court.

^^ Ibid., s. 5(2). See, also, s. 24, which repeals s. 149 of the Courts of Justice Act, 1984.

^^ S.C. 1970-71-72, c. 1.

^^ Although s. 17(4)(b) confers concurrent jurisdiction upon the Federal Court over suits
against servants of the federal Crown, if liability is not founded upon existing and
applicable federal law the Court cannot constitutionally be given jurisdiction over the
action: Tomossy v. Hammond, [19791 2 EC. 232 (T.D.), and Pacific Western Airlines
Ltd. and Canadian Acceptance Corp. Ltd. v. The Queen in right of Canada, [1980] 1 EC.
86 (C.A.). On the difficulties created by the Act and the constitutional limitations upon
federal jurisdiction, see, generally, Evans, "Federal Jurisdiction— A Lamentable Situa-
tion" (1981), 59 Can. B. Rev. 124.

Recent decisions in the Trial Division of the Federal Court have attempted to
expand the jurisdiction of the Federal Court in certain circumstances over the whole
cause of action. It has been said that, in order to justify this assumption of jurisdiction,
the facts of the case must be "so intimately intertwined. . .as to cry out for common trial
and ultimate final resolution, [and] it would matter not if in some aspect, an issue
bearing upon a party impinges upon provincial law, so long as in its pith and substance,
the issue is a necessary incidence or consequence of a valid federal law and of the relative
position of the parties with respect to it": Roberts v. Canada, [1987] 1 EC. 155 (T.D.), at
167.

See, also, ibid., at 161 and 165-66, and Marshall v. The Queen, [1986] 1 EC. 437
(T.D.), at 447-48. However, on the appeal in the Roberts case {sub nom. Wewayakum
Indian Band v. Canada and Wewayakai Indian Band (1987), 73 N.R. 234 (FC.A.)), only
MacGuigan J. of the Federal Court of Appeal agreed that the Federal Court Act
conferred jurisdiction on the Federal Court over the whole cause of action, despite
impingement on provincial law, where the claims in the action were "intimately
intertwined".

(b) The Single Judgment Rule

In one respect, the Commission believes that the Courts of Justice Act,
1984^^ does not go far enough in abolishing the common law distinctions
between joint and merely several concurrent liability. This is in connection
with the rule that only a single award of damages may be made in respect of
a loss or debt for which two or more defendants are jointly liable.

A case may be made for extending the single judgment rule to all
concurrent wrongdoers, that is, for recommending a reform in the law that
would restrict plaintiffs who pursue concurrent wrongdoers in separate
actions, whether jointly or severally liable, to the maximum damages
awarded in the first action in which they obtained judgment. Such a rule
would undoubtedly provide a strong incentive to institute a single action,
and would prevent relitigation of the same or very similar issues. This
solution has found acceptance in a number of jurisdictions, and its recent
rejection in the United Kingdom may be less persuasive in Ontario, where
many civil actions continue to be tried by juries that may be more prone to
differ in their assessment of damages than are judges. Moreover, in Canada,
the Uniform Contributory Fault Act^^ provides that when a judgment has
determined "an amount of damages against one or more concurrent wrong-
doers, the person suffering the damage is not entitled to have the damages
determined in a higher amount by a judgment in the same or any other
actions against any concurrent wrongdoer".

On the other hand, to impose an artificial restriction upon the maxi-
mum damages that may be awarded in the subsequent litigation may work
injustice on the plaintiff by preventing his recovering from a wrongdoer the
full amount of the loss for which that defendant would have been liable had
the plaintiff not already obtained judgment in a previous action.*^ If the
present single judgment rule were extended to all cases of concurrent
liability, then a plaintiff who had obtained judgment against one defendant
could not be awarded a greater sum against a severally liable wrongdoer in
the following circumstances: where his injury turned out to be more serious
than was apparent when he obtained judgment in the first action; where the
court in the later action assessed the plaintiff's damages higher than the
court in the first action had done; where the defendant in the first action had
a defence that was not available to the defendant in subsequent actions
(contractually limited liability, for example);'^' or where the defendant in

^^ Supra, note 18.

^^ Supra, note 73, s. 16(1).

'^ For a criticism of the single judgment rule, see Williams, supra, note 1, at 63-72. Cheifetz
suggests that the effect of s. 2 of the Negligence Act, supra, note 4, is that, where
concurrent tortfeasors are sued in one action, a single award of damages must be made
since the Act states that they are jointly and severally liable {supra, note 50, at 20 and
128). But see discussion supra, this ch., sec. 2(a).

'^' However, this rule may not apply when P obtains judgment against Dl for less than P's
full loss because Dl's liability is limited by statute or contract: see Plant v. Calderwood,
[1969] N.Z.L.R. 752 (S.C), rev'd on other grounds [1970] N.Z.L.R. 296 (C.A.).

the second action was liable to pay exemplary or punitive damages, which
the defendant in the first action was not.

On balance, the Commission does not recommend that a plaintiff's
right to recover his full loss should be restricted to the amount awarded in
the plaintiff's first action. ^^^ jj^g absence of any such ceiling from the
present law in the case of several concurrent wrongdoers does not appear to
occasion serious inconvenience, and the recent abolition of the judgment
bar rule for joint liability is unlikely to add significantly to the number of
cases in which a plaintiff will pursue his claim against concurrent wrong-
doers in separate actions.

Moreover, under the present law, it remains open to a severally liable
defendant to seek to establish that the plaintiff's loss was less than that found
by a court in an earlier proceeding by the plaintiff against a concurrent
wrongdoer. To introduce, in effect, the controversial principle of non-
mutual issue estoppel in this one area of the law does not seem to be
warranted by any pressing difficulty in the operation of the law as it is at
present. '^^ The Commission believes that the costs sanction under section
149(2) of the Courts of Justice Act, 1984, as expanded by our earlier
recommendation, should prove a sufficient inducement to plaintiffs to join
concurrent wrongdoers in a single action without imposing the further and
often arbitrary penalty of limiting the amount that they can recover. The
Commission therefore recommends that the present law with respect to
separate awards of damages against defendants who are severally liable
should be extended to those whose liability is joint. A plaintiff should always
be able to prove the extent of the loss for which a particular defendant is
liable, without regard to the sum awarded to the plaintiff against another,
concurrently liable defendant. '^'^

102

103

104

The importance currently attached to the plaintiff's right to choose his defendants is
aptly illustrated by the refusal of the courts to allow a defendant to join as a party-
defendant a person against whom the defendant claims contribution if that person was
not already a party to the action and the plaintiff has not consented to that person being
so joined. See, for example, Cameron v. Murray, [1931] O.R. 83 (H.C. Div.), and
Terminal Warehouses Ltd. v. Byam, [1946] O.W.N. 382 (Master S.C.O.), where it was
held that the plaintiff's right to choose his defendants was not overridden by a provision
similar to what is now s. 6 of the Negligence Act, supra, note 4. Section 6 provides that
"[w]herever it appears that a person not already a party to an action is or may be wholly
or partly responsible for the damages claimed, such person may be added as a party
defendant to the action upon such terms as are considered just. . .". See, also, Cheifetz,
supra, note 50, at 261-64.

For a recent decision on the scope of this principle, see Parklane Hosiery Co.. Inc. v.
Shore, 439 U.S. 322 (1979). In England, the House of Lords has held that "issue
estoppel" is restricted to civil actions between the same parties, although the courts'
power to strike out actions as an abuse of process may in some cases address a similar
issue: Hunter v. Chief Constable of the West Midlands Police, [1982] A.C. 529, [1981] 3
AllE.R. 727(H.L.).

Draft Act, s. 5(3).

Recommendations

The Commission makes the following recommendations:

1. The provisions currently contained in section 149 of the Courts of
Justice Act, 1984, as modified in accordance with the following recom-
mendations, should be placed in the proposed new Contribution and
Comparative Fault Act .

2. A person who has obtained judgment against a defendant should not
thereby be precluded from instituting or continuing an action against
another in respect of the same debt or damage for which the defendants
are jointly liable.

3. (1) Subject to paragraphs (2) and (3), a person who releases a person

should not thereby be barred from proceeding against any other
person who is concurrently liable in respect of the same debt or
damage.

(2) Where a person who settles with a concurrent wrongdoer or debtor
expressly gives up his right to sue any person who is liable for the
damage or debt, he should not subsequently be able to institute a
proceeding in respect of the damage or debt against a concurrent
wrongdoer or debtor who was not a party to the settlement.

(3) A person who has released a debtor should not be entitled to
proceed against another who is concurrently liable in respect of the
debt if the second debtor has been prejudiced by the release of the
first.

(4) The payment into court rule, enunciated in Reaney v. National
Trust Co. , should be abolished. An offer of settlement made under
Rule 49 of the Rules of Civil Procedure should be treated like any
other settlement. That is, a person who accepts an offer of settle-
ment should not be precluded from continuing or instituting an
action against any other person who is or may be concurrently
liable for the debt or damage in respect of which the offer of
settlement was made, unless the settlement is expressly made in
respect of the claim that the plaintiff may have against other
persons.

4. The Parliament of Canada should be requested to enact legislation that
would abrogate the judgment bar and release bar rules respecting
proceedings in the Federal Court.

5. The single judgment rule should be abolished, so that the present law
with respect to separate awards of damages against concurrent defen-
dants who are severally liable would be extended to those whose
liability is joint. A plaintiff should always be able to prove the extent of

the loss for which a particular defendant is liable, without regard to the
sum awarded to the plaintiff against another, concurrently liable
defendant.

A person who proceeds in separate actions against two or more persons
who are concurrently liable in respect of the same damage or debt
should be entitled to costs only in the first action, unless that person
satisfies the court that there were reasonable grounds for bringing more
than one action.

CHAPTER 3

INSOLIDUM LIABILITY

1. INTRODUCTION

As discussed in chapter 2, wrongdoers whose acts concur to cause a
single, indivisible harm' are each liable to the injured person for the entire
amount of the damage suffered. While the injured person is not entitled to
recover an amount in excess of the total damage incurred, she can obtain
judgment for the full amount of damage against one or all of the wrong-
doers, either in a single action or in separate, successive actions. Since each
concurrent wrongdoer is liable for the entire loss, each is said to be liable in
solidum.

In this chapter, we shall discuss the rationale for, and the criticisms of,
the principle of z/i solidum liability, and consider whether any reform of the
rule is warranted. As discussed below, the issue of in solidum liability is
central to the whole area of contribution among wrongdoers, and the
necessity for reform of the rule was considered by the Commission at the
outset of this Project. Subsequent to the Commission's initial deliberations
and recommendations with respect to in solidum liability, this issue gained
prominence in the context of the liability insurance "crisis" in Ontario that
had resulted in the appointment of the Ontario Task Force on Liability
Insurance. The Final Report of the Task Force identified the principle of /«
solidum Uability as a reform issue, and recommended that this Commission
should give consideration to the question of its retention, modification, or
abolition.^ At the same time, it became apparent that the question of reform
of the principle of in solidum liability had been recently addressed by a
number of American jurisdictions, as one aspect of a wide variety of tort
reform legislation being implemented in response to the liability insurance
crisis.

While we were confident that, as a matter of principle, we had fully
considered the issue of in solidum liability, we decided, in light of these
subsequent developments, to recanvass the issue, having particular regard
to recent developments in the United States. In order to do so, we requested,
from every American legislature, copies of all legislation, including bills and
statutes, relating to reform of the rule of m solidum liability, as well as copies

' For discussion of the concept of "divisible" and "indivisible" damage or harm , see
supra, ch. 2, note 5.

^ Ontario, Ministry of Financial Institutions, Final Report of the Ontario Task Force on
Insurance (1986) (hereinafter referred to as "Slater Report"), at 90.

[ 31 ]

of any empirical studies, reports, and legal policy analyses that had
informed such reform measures. Furthermore, we commissioned a
research paper from one of the leading American academics in this field,
Professor George L. Priest, the John M. Olin Professor of Law and Econom-
ics, Yale Law School. Professor Priest provided a summary of the current
academic analysis of the issue of m solidum liability, as well as a synopsis of
the major American reports and studies that had considered the reform of
the rule.

In March, 1987, the Commission met to reconsider the question
whether the current rule of in solidum liability should be abolished or
modified. The Commission was greatly assisted in its deliberations by the
participation of a number of prominent academics in the field of tort law.
These participants were Professor Priest; Professor Marc Galanter, of the
School of Law, University of Wisconsin; Professors Michael J. Trebilcock,
Stephen M. Waddams, and Ernest J. Weinrib, of the Faculty of Law,
University of Toronto; and the Project Director, Professor John Evans. We
are grateful for their invaluable advice and assistance. We feel confident
that, with the benefit of their extensive experience in and knowledge of this
area, the various legal, economic, and practical aspects of the operation of
the rule of in solidum liability, as well as the issues of principle, were fully
explored.

Before proceeding, a matter of terminology should be clarified. In
Ontario, in solidum Uability is more commonly referred to as "joint and
several" liability.^ However, used in this way, the latter term is a misnomer.
The term more accurately refers to essentially procedural matters: as we
discussed in chapter 2,"^ at common law four important legal and practical
consequences flowed from the distinction between joint liability and several
concurrent liability, all but one of which has now been superseded by section
149 of the Courts of Justice Act, 1984.^ For the purposes of the present
chapter, this facet of the law respecting joint and several liability has nothing
to do with in solidum liability and is, therefore, irrelevant. We need repeat
only that all concurrent wrongdoers, whether jointly or severally Hable, are
liable in solidum. Accordingly, we shall use the more precise, if less famiUar,
term "/« solidum hability" when referring to the liability of each concurrent
wrongdoer for the plaintiff's entire loss.

The principle of in solidum liability is clearly of great benefit to an
injured person. At a minimum, the rule provides a plaintiff with control of
her action; as we have said, a plaintiff can choose to sue only one or each of
the wrongdoers, in a single action or in separate, successive actions. The rule
also facilitates satisfaction of a plaintiff 's judgment, which, if the plaintiff so
chooses, may be fully satisfied by execution against only one wrongdoer,
presumably the best insured or most solvent.

^ See, for example, Negligence Act, R.S.O. 1980, c. 315, s. 2.
^ Supra, oh. 2, sec. 2(a).
5 S.0. 1984,0. 11.

Prior to the development of the principles of contribution among
wrongdoers, discussed in chapter 4, this procedural advantage enjoyed by an
injured person was particularly controversial, since it allowed a plaintiff "to
determine the incidence of loss distribution between co-tortfeasors at his
own uncontrolled discretion, allowing him to throw the whole loss, if he was
so minded, on one of them and completely exempt the other".^ Now it is
generally a matter of procedural convenience only, since, as we shall see
below, a concurrent wrongdoer who has satisfied a plaintiff's judgment can
usually recover contribution from the other wrongdoer.

However, a scheme of contribution can benefit one wrongdoer only
where the other wrongdoer is available and capable of satisfying her portion
of the liability. Under the current law, the most significant advantage to an
injured person of the principle of /« solidum liability is that it imposes on a
concurrent wrongdoer the risk that the other wrongdoer may be insolvent or
otherwise unavailable to satisfy her share of the liability to the injured
person. The principle operates primarily to ensure full compensation to the
injured person, to the occasional detriment of a solvent wrongdoer who is
required to satisfy the entire liability, regardless of her degree of fault.

It is this latter effect of in solidum liability that remains controversial,
giving rise to criticism of the rule and calls for its modification or abolition.
A variety of arguments have been raised by those advocating change, some
based on principle and others based on pragmatic or practical concerns.
These include arguments regarding the relative fairness of the operation of
the rule as between an injured party and a solvent wrongdoer, the impact of
the rule on the cost and availability of liability insurance and on the goals of
deterrence and risk management, and the potential ramifications for the
tort system generally of change to the existing rule. Each of these arguments
will be canvassed briefly in this chapter.

Before considering the debate about the retention, abolition or modifi-
cation of the principle of in solidum liability, an important, although
perhaps obvious, point should be re-emphasized. It is the rule of in solidum
liability that makes necessary the principle of contribution among wrong-
doers; if every wrongdoer, concurrent or otherwise, were liable only for that
portion of the damages equal to her degree of fault, there would be no need
for a scheme of recovery— that is, contribution— from other wrongdoers.
Accordingly, the question whether in solidum liabihty should be retained is,
in effect, the starting point of this Report.

2. THE DEBATE REGARDING IN SOLIDUM LIABILITY

(a) The "Fairness" Argument

The central rationale offered for the principle of in solidum liability is
that, since the conduct of each concurrent wrongdoer was a cause of the
indivisible damage suffered by the injured person, it is fundamentally just

^ Heming, The Law of Torts (6th ed., 1983), at 232-33.

that each should be fully liable to the injured person for the consequences.
The fact that the conduct of another wrongdoer may have also contributed
to the same injury should not prejudice the right of the injured person to
obtain full compensation for the damage; rather, it should merely be a
matter for resolution as between concurrent wrongdoers themselves. Pro-
ponents of this view acknowledge that there may be some unfairness where a
solvent wrongdoer is required to satisfy the entire liability without contribu-
tion from the other concurrent wrongdoer. However, they emphasize that
the unfairness would be much greater if an injured person were undercom-
pensated for the single indivisible harm caused by the fault of that same
wrongdoer.^

Opponents of in solidum liability disagree that this concern with
providing full compensation to an injured person should override con-
siderations of fairness to defendants. In their view, a plaintiff should have no
greater claim to the sympathy of the court than a defendant. They observe
that, where there is only one defendant, a plaintiff must bear the risk that she
may be insolvent, and they ask why a plaintiff should be in a better position
merely because the damage suffered was caused by more than one person.^

Moreover, critics of in solidum liability point out that circumstances
have changed since the rule was developed. The principle was originally of
benefit only to a completely innocent plaintiff; at common law, a person
who had contributed to her own injury, even to a minor degree, was
completely barred from recovering against any other person whose fault was
also a cause of the injury. However, the abolition of the rule of contributory
negligence^ allowed a plaintiff who was also at fault to recover from other
wrongdoers, even though such wrongdoers remained liable in solidum . This
modification of the common law has given rise to circumstances in which

For an excellent discussion of the rationale for in solidum liability, see the decision of the
California Supreme Court in American Motorcycle Association v. The Superior Court of
the State of California for the County of Los Angeles , 20 Cal. 3d 578, 578 P. 2d 899 (Sup.
Ct. 1978) (subsequent references are to 20 Cal. 3d). See, generally, Adler, "Allocation of
Responsibility After American Motorcycle Association v. Superior Court" (1978), 6
Pepperdine L. Rev. 603; Reming, "Report to the Joint Committee of the California
Legislature on Tort Liability on the Problems Associated with American Motorcycle
Association v. Superior Court"" (1979), 30 Hastings L.J. 1465; Pearson, "Apportionment
of Losses under Comparative Fault Laws— An Analysis of the Alternatives" (1980), 40
La. L. Rev. 343; and Bachrach, "Damage Apportionment in Maine: A Proposal for
Reform" (1982), 34 Maine L. Rev. 367.

These arguments were made in the following American cases that abolished in solidum
liability: Laubach v. Morgan, 588 P 2d 1071 (Okla. Sup. Ct. 1978); Brown v. Keill, 224
Kan. 195, 580 P 2d 867 (Sup. Ct. 1978) (subsequent references are to 224 Kan.); and
Bartlett v. New Mexico Welding Supply Inc., 9% N.M. 152, 646 P 2d 579 (Ct. App. 1982)
(subsequent references are to 646 P. 2d). See, further, infra, this ch., sec. 3(b).

The contributory negligence rule was abolished in Ontario in 1930 and replaced by a
scheme of comparative fault. Under this scheme, the plaintiff may recover damages, but
the award is reduced by an amount proportional to the plaintiff's degree of fault: The
Negligence Act, 1930, S.O. 1930, c. 27, s. 5, now Negligence Act, supra, note 3, s. 4.

the operation of the rule of in solidum Habihty is most severely criticized for
unfairness to defendants, that is, where a plaintiff's degree of fault is equal
to, or exceeds, that of the solvent wrongdoer. Take, for example, a case
where the respective degrees of fault of P, Dl, and D2 are 25, 60, and 15
percent, respectively. By operation of the rule of in solidum liability, where
Dl is insolvent, D2, whose degree of fault was 15 percent, would be liable for
75 percent of the entire damage, although P's degree of fault was almost
twice that of D2.

Opponents of /« solidum liability assert that the retention of the rule is
inconsistent with the principle underlying comparative fault, '^ which, they
argue, contemplates each party being liable only in proportion to her
respective degree of fault. In their view, the introduction of a regime of
comparative fault essentially realigned the equities between plaintiffs and
defendants and, accordingly, should have involved a change of the rule of m
solidum liability.^' The contention is that the abolition of in solidum
liability, to the benefit of defendants generally, should have been the quid pro
quo for the abolition of the contributory negligence rule, which expanded
the scope of recovery for all plaintiffs. ^^

The response to these arguments of those who favour in solidum
liability is twofold. First, it is said that the abolition of the rule would
prejudice not only the negligent, but also the completely innocent, plaintiff;
it would be anomalous if reform of the doctrine of contributory negligence
were achieved at the expense of the rights of a plaintiff who was completely
without fault. ^^ Secondly, it is argued that the nature of the fault attributed to
an injured person differs qualitatively from that of defendants; a plaintiff's
fault merely constitutes failure to take care of herself, while the defendants'
fault lies in failure to take care to avoid danger to others. ^^ Moreover, the
percentage attributed to the plaintiff's failure to take care is sometimes a
conventional figure, ^^ which is applied automatically, even where defen-
dants are grossly negligent; such a figure may bear little relationship to the
actual relative fault of the plaintiff. Proponents of in solidum liability say
that a reduction of the plaintiff's claim in proportion to her degree of fault is
a sufficient penalty to reflect the plaintiff's lack of care, and that abolition of
in solidum liability is unwarranted.

*^ Laubach v. Morgan, supra, note 8, at 1074.

'' Brown v. Keill, supra, note 8, at 203.

^^ Bartlett v. New Mexico Welding Supply, Inc. , supra, note 8, at 582.

'^ American Motorcycle Association v. The Superior Court of the State of California for the
County of Los Angeles , supra, note 7, at 589-90.

Ibid.

'^ For instance, in Ontario, between 10% and 30% is generally deducted from an award for
failure to wear a seat belt. Some have suggested that the degree of contributory
negligence in such cases is determined arbitrarily See infra, ch. 10, sec. 1(b).

(b) The Insurance Argument

The issue of in solidum liability has arisen most recently for debate in
the context of dramatic changes in the liability insurance market in the past
few years. These changes, characterized by some as an insurance "crisis",
have resulted in sharply increased costs, and shrinking availability, of
liability insurance to the public, particularly to businesses and public
entities. As a result, beneficial goods and services have become more costly
and less widely available, as those who provide such goods and services are
required either to pass on the higher premium costs, or to withdraw goods
and services for which the cost of insurance has become prohibitive.

While the cause or causes of this insurance "crisis" have been the
subject of heated debate, it is alleged by some, particularly public and
private corporations and their insurers, that the operation of the principle of
in solidum liability is a key contributing factor to these recent
developments. '^ Critics of in solidum liability say that the rule has its most
significant impact on what have become commonly known as "deep
pocket" defendants, that is, defendants or potential defendants who are the
most solvent or best insured. It is said that, because such defendants are the
most likely source of full recovery by an injured person, they are often
joined in an action even if they are only marginally Uable, or not liable at all.
It has been suggested that sympathetic finders of fact may attribute small
degrees of fault to innocent deep pocket defendants in order to ensure
compensation to a victim who might not otherwise recover. ^^ Moreover, it is
argued that the prospect of being found liable to pay the entire award of
compensation to the plaintiff, even where the percentage of fault attribut-
able to the deep pocket defendant is very small, or non-existent, places
intense pressure on such defendants to settle for amounts well in excess of
the amount proportional to their actual share of fault— payments that must
be reflected ultimately in higher insurance premiums.

In addition, opponents of /« solidum liability suggest that the impact of
the rule on premiums is not simply a reflection of increases in actual
payouts, either by way of settlement or judgment. They say that the
uncertainty created by the rule also leads to increased premiums. Critics of
the rule argue that in solidum liability, in effect, requires deep pocket
defendants to insure not only against their own negligence but also against

See, generally, Slater Report, supra, note 2, at 53-55; Insurance Brokers Association of
Ontario and Toronto Insurance Conference, "Response to Slater Task Force" (1986), at
4; Lilly, "Professional Liability Insurance" (1986), Appendix 10 to the Slater Report, at
19-20; Rorida, Senate Committee on Commerce, A Review of Historical Analysis-
Current Perspectives of the Doctrine of Joint and Several Liability (1986) (hereinafter
referred to as "Rorida Report"), at 36-46; United States, Justice Department, Report of
the Tort Policy Working Group on the Causes, Extent and Policy Implications of the
Current Crisis in Insurance Availability and Affordability (1986); and New York,
Insuring Our Future: Report of the Governor's Advisory Commission on Liability
Insurance (1986) (hereinafter referred to as "New York Report"), at 129-32.

Slater Report, supra, note 2, at 62.

the possible insolvency of a concurrent wrongdoer. The risk of insolvency of
an unknown co-defendant is one that is said to be extremely difficult to
predict or insure against. In calculating an insurance premium, an insurer
must make a prediction of not only the likely average judgment or claim
over a specified period, but also the range of potential outcomes. As the
range of outcomes increases or decreases, so premiums increase or decrease.
It is said that, because the operation of in solidum liability makes these
predictions more difficult, an additional, sometimes substantial, risk pre-
mium must be added to the cost of liability insurance.

Critics of in solidum liability contend that imposing the risk of poten-
tial insolvency of a concurrent wrongdoer on defendants is inefficient, and
that it is unfair that the costs of such inefficiency should be borne by society
generally in the form of higher costs and diminished availability of goods
and services. They suggest that, from an economic perspective, it would be
more efficient for a plaintiff to absorb that risk, for which she could insure
on a first party basis.

Proponents of in solidum liability are skeptical regarding these claims
by deep pocket defendants and their insurers about the impact of the rule on
insurance premiums. They acknowledge that the in solidum rule creates
some risk that marginally liable defendants will be held liable for the entire
loss, and thereby encourages settlement. However, they assert that such
defendants cannot seriously be considered to be "held for ransom" since, in
most cases where a defendant is marginally liable, there is an equally strong
incentive for the plaintiff to settle for a reasonable amount, roughly com-
mensurate with the likely degree of fault, or face the risk that no liability will
be attributed to that defendant at trial. On this argument, the impact of in
solidum liability cannot be significant, because an insurer need establish
premiums based on Uability for the full award of damages only in respect of
the very small percentage of cases that are actually litigated.

Advocates of m solidum Uability also dispute the occasional allegations
of intellectual dishonesty attributed to triers of fact. It has been denied that
there is any evidence that judges or juries in Ontario, or indeed elsewhere,
are finding Uability where none exists, in order to compensate victims.'^
Moreover, it is argued that, even if judges or juries were disposed to ascribe
Uability where none existed, the appropriate response should be to control
such conduct, and not to abolish a just and valid legal principle.

Those who favour retaining in solidum liability emphasize that there is
little evidence that the rule is an element, let alone a major cause, of the
insurance crisis. Such evidence as exists is, in fact, largely anecdotal. It
appears that there have been no empirical studies done in Canada with

'^ Canadian Bar Association-Ontario, Submission to the Minister of Financial Institutions
in Response to the Ontario Task Force on Insurance (July, 1986), at 28-29, and The
Committee for Fair Action in Insurance Reforms, A Report in Response to the Ontario
Task Force on Insurance (1986), at 13-14.

respect to the impact of the rule. In the United States, where there has been
a flurry of legislative reforms of the principle of in solidum liability, •^ only
two studies appear to have produced any empirical data relating to the
operation of the rule, and their findings are general and inconclusive.^^ The
data that might provide reliable empirical evidence of the impact of the rule,
such as the magnitude of the incidence of insolvency, is in the hands of the
insurers. It has been suggested that the failure of the insurance industry to
provide such "hard" evidence renders the claims suspect. ^^

While arguments can be marshalled on either side of the insurance
issue, it is apparent to us that, without further empirical evidence, conclu-
sions respecting this aspect of the debate regarding in solidum liability will
remain speculative, and, therefore, provide an unsatisfactory basis on which
to amend, much less aboUsh, the present rule.

The arguments regarding issues of fairness and insurance canvassed
thus far are concerned with one of the central aims of the tort system, which
is compensation of the injured party. This section considers arguments
about in solidum liability in relation to another widely acknowledged
purpose of the tort system, namely, deterrence of activity that may cause
harm to others. ^^ Simply stated, our system of tort Uability requires people
to take responsibility for their actions, that is, to be safety conscious. It is
expected that people who know that they will be held accountable for their
actions will take precautions in order to avoid liability, and that optimal
precautions will be taken where the cost of prevention is less than the cost of
potential liability. The greater the potential liability, the greater the resources
that will be allocated to accident prevention.

^^ See infra, this ch., sec. 3(c).

^^ The first is a study made for the State of New York, which estimated that 9% of annual
claims payouts of the City of New York were attributable to the operation of the doctrine
of joint and several liability: New York Report, supra, note 16, at 131. The Report gives
no details of how the study arrived at this figure.

The second study was prepared for the Florida Senate Committee on Commerce
in December, 1985: Dimento, Harrison and Belsky, "Joint and Several Liability: A
Study of the Fiscal and Social Impact of Change in the Doctrine" (University of Florida,
College of Law, mimeograph, December, 1985). Comparing information and data from
five states that had abolished the doctrine, five states that had limited the doctrine, and
seven states in which the doctrine operated, the authors tentatively concluded that
insurance coverage and rates appeared to be increasing in all the jurisdictions studied.
Moreover, they found that a greater percentage of respondents from states that had
abolished the doctrine reported insurance increases than those that had modified or
retained the doctrine. However, in a recent conversation with a representative of the
Commission, one of the authors of the study cautioned against placing much reliance on
the findings of the study. The study also contained broad disclaimers of its reliability.

^' Florida Report, supra, note 16, at 51 and 61.

For a legal-economic analysis of the tort system and accident prevention, see Posner, "A
Theory of Negligence" (1972), 1 J. Legal Stud. 29.

As with the insurance issue, there is disagreement regarding the impact
that aboHtion of in solidum liability would have on the goal of deterrence. It
has been argued that abolition probably would not affect the risk manage-
ment behaviour of potential defendants.^^ The argument is that any poten-
tial party to an accident will take optimal precautions to prevent an
accident, if that party expects that it might bear the entire cost of the
accident. According to this argument, because no person could know, in
advance, that the negligent conduct of another might also be a cause of the
same damage, a person will always have the necessary incentive to take
optimal precautions to avoid the risk of accident.

However, advocates of in solidum liability assert that exposing concur-
rent wrongdoers to potential liability for the entire award of damages
motivates potential defendants, particularly deep pocket defendants, to
implement safety measures that otherwise might be considered
uneconomical. 2"^ They suggest that decreasing such potential liability by
abolishing the in solidum rule would necessarily reduce the incentive for
effective accident prevention. For example, assume that a highway autho-
rity negligently fails to clear a spill on the highway caused by another,
unidentified person. Under the present in solidum rule, the highway autho-
rity could be liable for 100 percent of the damage caused by its failure to
clean the spill. If the rule were abolished, the highway authority might be
held liable for only a small percentage. Advocates of in solidum liability say
that, if the rule were abolished, the highway authority would clearly have
diminished incentive to allocate resources to ensure the safety of highways.

Unfortunately, as with the insurance issue, we are without reliable data
and persuasive empirical evidence. Accordingly, the aspect of the debate
that focuses on the effect of in solidum liability on deterrence also will
remain theoretical and speculative.

(d) Other Ramifications for the Tort System

Competing arguments have also been made regarding the effect that a
change to the doctrine oUn solidum Uability would have on the operation of
the tort system as a whole, including such aspects of that system as settle-
ment behaviour, litigation strategy, defence costs, and the administration of
the courts. 25 For example, it has been suggested that, because defendants'

^^ Rea, "The Economics of Comparative Negligence" (University of Toronto, unpub-
lished mimeograph, April 10, 1986). See, also, Easterbrook, Landes and Posner, "Contri-
bution Among Antitrust Defendants: A Legal and Economic Analysis" (1980), 23. J.L.
& Econ. 331, and Polinsky and Shavell, "Contribution and Claim Reduction Among
Antitrust Defendants: An Economic Analysis" (1981), 33 Stan. L. Rev. 447, in which this
analysis has been applied in the context of contribution.

^^ Dimento, Harrison and Belsky, supra. , note 20, at 30-33.

^^ See, generally Dimento, Harrison and Belsky ibid., at 24-28, and Rorida Report,
supra, note 16, at 56-61.

liability would be lower and more easily predicted if the doctrine were
abolished, it is possible that more settlements would be reached.^^

Others have argued that abolition of in solidum liability could result in
fewer settlements, with resulting increased costs of litigation to the parties
and a further burden on the already overtaxed resources of the civil justice
system. The fact that the potential liability of each defendant would be lower
and more predictable is seen as reducing significantly the defendant's risk at
trial, thereby reducing her incentive to settle.^^ Similarly, it is argued, a
plaintiff would be less inclined to settle because of uncertainty with respect
to the degree of liability of a settling defendant, and concern that the
remaining defendants would successfully argue that the absent, settling
defendant was primarily at fault.^^ Advocates of in solidum liability also
caution that abolition of the rule would result in longer and more compli-
cated trials, and increased defence costs, as plaintiffs would feel compelled
to join every possible defendant in order to ensure full recovery. ^^

Once again, these arguments are speculative. While abolition or modi-
fication of the principle of in solidum liability would undoubtedly have
ramifications for the operation of the tort system as a whole, without further
study it is not possible to predict whether the overall impact would be
beneficial, or to whom.

3. THE LAW IN THE UNITED STATES

(a) Introduction

In the United States, in solidum liability, uniformly called "joint and
several Uability", applies to what are referred to as "joint torts" and "joint
tortfeasors". Although American principles governing joint and several
concurrent wrongdoers developed from the English common law principles
described in chapter 2, it has been noted that the American concept of joint
torts and joint tortfeasors, through "loose usage", have become uncertain
and confused. ^^ It appears that the term "joint tortfeasor" includes not only
persons acting in concert, but also independent, concurrent wrongdoers.^*
Further, the term has been defined to mean two or more persons joined in
the same action. ^^ This latter definition appears to have given rise to the

^^ See the discussion in the Florida Report, ibid., at 60.

^^ Dimento, Harrison and Belsky, supra, note 20, at 24-27.

28 Ibid., at 27.

2^ Florida Report, supra, note 16, at 56-59.

^^ Dobbs, Keeton, and Owen (eds.), Prosser andKeeton on the Law of Torts (5th ed., 1984)
(hereinafter referred to as "Prosser and Keeton"), at 322.

^* Ibid., ai 323.

^2 Ibid., at 324.

unfortunate possibility that independent, non-concurrent wrongdoers,
liable for different, distinct damages, but joined for procedural convenience
in the same action, may be held "jointly and severally" liable for the entire
amount of damages awarded in the action, a clearly unwarranted extension
of the doctrine. ^^

(b) Reform in the Context of Comparative Fault

The question whether the principle of in solidum liability should be
abolished or retained in the United States was first debated in the context of
the widespread abolition of the doctrine of contributory negligence and the
implementation of a scheme of comparative fault by the majority of states.^'*
Most American lawmakers agreed that the contributory negligence rule,
under which contributory negligence operates as a complete bar to recovery,
often worked hardship, particularly with respect to a plaintiff whose fault
was slight. However, many jurisdictions believed that it was unfair that a
plaintiff whose fault was equal to, or exceeded, that of a particular defendant
should recover damages for the loss incurred. As a result, two types of
comparative fault system developed. ^^ Under the first type, "pure" compar-
ative negligence, a plaintiff's recovery is reduced, but not eUminated, by her
share of fault. For example, a plaintiff who is 99 percent at fault nevertheless
may recover 1 percent of her loss from a defendant. The second type,
"modified" comparative fault, takes one of two general forms: a plaintiff is
barred from recovery where her fault is (1) equal to, or (2) greater than, that
of one or more of the defendants.

Certain states in which a scheme of comparative fault was implemented
failed to address expressly the question whether the doctrine of in solidum
liability continued to apply in the context of comparative fault, and,
accordingly, the issue arose for judicial determination. A number of state
courts decided that the doctrine was no longer appropriate under a regime of
comparative fault. ^^ In abolishing the doctrine, these courts relied on

^^ Ibid., at 329. This extension of the doctrine was raised as part of the discussion of the
need for reform in an unpublished memorandum by Stephen Saltzman to the American
Trial Lawyers Task Force on Litigation Issues (June 8, 1986), at 190. Prosser and Keeton,
supra, note 30, at 329, indicate that this tendency to confuse liability for the entire
damages with joinder of parties has resulted in a reluctance on the part of American
courts to allow joinder in cases where cleariy it would be procedurally convenient to do
so, in order to avoid imposition oUn solidum liability on defendants otherwise liable for
different damages.

^^ In some jurisdictions, such as California, the reform was implemented by the courts: see
Li V. Yellow Cab. Co. of California, 119 Cal. Rptr. 858, 532 P. 2d 1226 (Sup. Ct. 1975).
However, in most states, the reform was by legislation. See, generally, Schwartz,
Comparative Negligence (2d ed., 1986), at 11-28.

^^ See, generally, Woods, Comparative Fault (2d ed., 1983), and Schwartz, supra, note 34.

^^ See, for example, Laubach v. Morgan, supra, note 8; Brown v. Keill, supra, note 8; and
Bartlett v. New Mexico Welding Supply, Inc., supra, note 8.

various arguments, discussed above, ^^ to the effect that the principle of
comparative fault called for a realignment of the equities between plaintiffs
and defendants. Perhaps most significantly, these courts rejected the notion
that a plaintiff has any greater claim upon the sympathy of the court than
defendants, or that concern with compensation of victims should override
concerns of fairness to defendants. ^^

However, in a leading case a contrary view was expressed and the
doctrine of in solidum liability was upheld, primarily on the ground of a
"pragmatic policy determination" that "from a reaUstic standpoint. . .[the]
suggested abandonment of the joint and several liability rule would work a
serious and unwarranted deleterious effect on the practical ability of negli-
gently injured persons to receive adequate compensation for their
injuries". ^^

Ultimately, the doctrine was retained in most American states. Never-
theless, it was apparent that both abolition and retention of the doctrine of
in solidum liability could give rise to some unfairness to either plaintiffs or
defendants. Many commentators argued that, while assurance of full com-
pensation for an innocent victim might well outweigh claims of fairness of a
solvent defendant whose conduct was a cause of the loss, the force of a
plaintiff's claim is diminished where she was also a cause of the loss, and
particularly if the degree of fault of the plaintiff exceeded that of the
defendant against whom the entire judgment would be satisfied.^^ These
commentators advocated a third alternative, a form of "risk-sharing",
which in their view was more consistent with the poUcy underlying compar-
ative fault than either outright abolition or retention of full wrongdoer
liability.

This reallocation alternative provides for sharing of the liability of an
insolvent or absent defendant by all remaining parties, including the plain-
tiff, in proportion to their respective degrees of fault. For example, if the
proportional fault of P, Dl, and D2 was 25, 50, and 25 percent, respectively,
and D2 was insolvent, P's share of fault would be increased by one-third and
Dl's share by two-thirds. If Dl was insolvent, the share of P and D2 would
increase equally. Such a reallocation scheme was adopted in section 2(d) of
the Uniform Comparative Fault Act,"^^ the Comment to which explains that
the reallocation "avoids the unfairness both of the common law rule of
joint-and-several liability, which would cast the total risk of uncoUectibility

^^ Supra, this ch., sec. 2(a).

^^ Laubach v. Morgan, supra, note 8; Brown v. Keill, supra, note 8; and Bartlett v. New
Mexico Welding Supply, Inc., supra, note 8.

^^ American Motorcycle Association v. The Superior Court of the State of California for the
County of Los Angeles , supra, note 7, at 589-90.

^^ Fleming, supra, note 7, at 1492; Bachrach, supra, note 7, at 396; and Pearson, supra,
note 7, at 364-65. Fleming indicates that the originator of this alternative was Gregory:
see Legislative Loss Distribution in Negligence Actions (1936), at 77-79.

^ National Conference of Commissioners on Uniform State Laws, Uniform Comparative

upon the solvent defendants, and of a rule abolishing joint-and-several

liability, which would cast the total risk of uncollectibility upon the
claimant".'^2

As in Ontario, more recent calls in the United States for the abolition or
modification of the doctrine of in solidum liability have been founded
almost invariably on the operation of the doctrine on "deep pocket"
defendants and the consequential effects on the public. The Preamble to
recent legislation in California that modified the doctrine articulates the
central concerns underlying such reform:"*^

The People of the State of California find and declare as follows:

(a) The legal doctrine of joint and several liability, also known as 'the
deep pocket rule', has resulted in a system of inequity and injustice
that has threatened financial bankruptcy of local governments, other
public agencies, private individuals and businesses and has resulted in
higher prices for goods and services to the public and in higher taxes to
the taxpayers .

(b) Some governmental and private defendants are perceived to have
substantial financial resources or insurance coverage and have thus
been included in lawsuits even though there was little or no basis for
finding them at fault. Under joint and several liability, if they are
found to share even a fraction of the fault, they often are held
financially liable for all the damage. The People— taxpayers and
consumers alike— ultimately pay for these lawsuits in the form of
higher taxes, higher prices and higher insurance premiums .

(c) Local governments have been forced to curtail some essential police,
fire and other protections because of the soaring costs of lawsuits and
insurance premiums.

Therefore, the People of the State of California declare that to remedy
these inequities, defendants in tort actions shall be held financially liable in
closer proportion to their degree of fault. To treat them differently is unfair and
inequitable.

Fault Act, Uniform Laws Annotated, Vol. 12 (1987 Pocket Part). Section 2(d) provides
as follows:

(d) Upon motion made not later than [one year] after judgment is entered, the
court shall determine whether all or part of a party's equitable share of the
obligation is uncollectible from that party, and shall reallocate any uncollect-
ible amount among the other parties, including a claimant at fault, according
to their respective percentages of fault. The party whose liability is reallo-
cated is nonetheless subject to contribution and to any continuing liability to
the claimant on the judgment.

^^ Ibid., 1987 Pocket Part, at 43.

"^^ Cal. Civ. Code, §1431.1 (West Supp. 1988).

The People of the State of CaHfornia further declare that reforms in the
liability laws in tort actions are necessary and proper to avoid catastrophic
economic consequences for state and local governmental bodies as well as
private individuals and businesses.

It seems apparent from this Preamble that the "inequity and injustice"
that this legislation is intended to address is the consequential impact of the
operation of the doctrine on the cost and availability of socially beneficial
goods and services to the public; it is less concerned with the relative equities
between plaintiffs and defendants. The legislation is premised on the
assumption that the rule of in solidum liability has been a major contribut-
ing factor to the recent increases in the cost, and diminished availability, of
liability insurance. However, as we have discussed,^'* this assumption, which
seems to be widely held in the United States, is based largely on anecdotal
evidence; it appears that no satisfactory studies have been conducted to
estimate the economic or social impact of the doctrine.

Most American states that have enacted or proposed reform measures
provide for the modification, rather than outright abolition, of the doctrine
of in solidum liability. These reform measures are of four general kinds.

The first type of reform abolishes in solidum liability with respect to
non-economic losses, that is, losses attributable to such matters as pain and
suffering."*^ This kind of measure would continue to ensure full compensa-
tion to the plaintiff for actual out-of-pocket expenses, including loss of
future income and costs of future care. Such a measure would presumably
be of greater significance in the United States, where very large awards for
non-economic losses have been made, than in Ontario, where there is an
upper limit on the amount of damages that may be awarded for non-
economic loss.^^

The second type of reform abolishes or modifies the doctrine with
respect to several types of defendant who might be particularly vulnerable as
"deep pockets", such as public bodies or certain professionals."*^ This kind of
measure is probably intended to encourage the continued provision of social

44
45
46

Supra, this ch., sec. 2(b).

See, for example, the California legislation, supra, note 43.

In 1978, the Supreme Court of Canada established a "rough upper limit" of $100,000 for
an award of damage for non-economic loss. Allowing for inflation, the current limit is
approximately $190,000. S,Qt Andrews v. Grand iSc Toy Alberta Ltd. , [1978] 2. S.C.R. 229,
83 D.L.R. (3d) 452; Thornton v. Board of School Trustees of School District No. 57
(Prince George), [1978] 2 S.C.R. 267, 83 D.L.R. (3d) 480; and Arnold v. Teno, [1978] 2
S.C.R. 287, 83 D.L.R. (3d) 609. In ch. 3 of the Commission's recent Report on
Compensation for Personal Injuries and Death (1987), the Commission has recom-
mended retention of the present law represented by these cases.

In West Virginia, the legislation modifies joint and several liability in medical malprac-
tice suits: W. Va. Code, §55-7B-9 (1986 Supp.). In New Jersey, the legislation abolishes
the rule with respect to public employees and public entities: S.B. 375 (1986).

services, such as playgrounds, daycare centres, or medical services, that
might otherwise be withdrawn because of the high cost of liability insurance.
The policy choice here would appear to be between the occasional hardship
to a plaintiff, even a totally innocent plaintiff, and the denial of socially
beneficial services. Of course, the efficacy of such measures depends on
whether deep pocket defendants are being unduly affected, a question
which, as we have seen, is debated by proponents of in solidum liability.

A third type of reform measure would retain in solidum liability with
respect to an innocent plaintiff, but would abolish or modify the doctrine
where the plaintiff's fault exceeds a specified degree— for example, 50
percent— or is greater than the fault of each defendant."*^ This type of reform
proposal is concerned with the relative degrees of fault between the plaintiff
and defendant, and appears to reflect the concerns of fairness as between a
defendant and a negligent plaintiff that animated the "modified" compara-
tive fault schemes.

A fourth type of measure focuses on the degree of fault of the defendant
and abolishes the doctrine where the degree of fault is small, for example,
less than 25 percent."^^ Such a measure would reduce the impact of the rule
on deep pocket defendants who are marginally at fault.

The criticism of the third and fourth types of reform measure is that
they may operate arbitrarily and perhaps illogically. For example, where in
solidum liability would be abolished if the plaintiff's fault is greater than 50
percent, a plaintiff who is 49 percent at fault would recover fully, while a
plaintiff who is 51 percent at fault would not. To quote the Prefatory Note on
the concept of "modified" comparative fault in the American Uniform
Comparative Fault Act, "a difference of a single point in the percentage of
fault allocated to the claimant may determine whether he can recover [in
full]. It is unreaUstic to expect a [fact finder] to reach a decision this
precise. . .".^^

Finally, a fifth type of reform measure^ • involves a reallocation scheme
of the kind provided for by the American Uniform Comparative Fault Act,
the rationale for which has been discussed above.^^

Reallocation schemes are subject to criticisms similar to some of those
directed at abolition of in solidum liability. "Risk-sharing" between the

^^ Fla. Tort Reform and Insurance Act of 1986, 1986, §768.81(3), and La. Civ. Code, art.

2324.

^^ 111. Rev. Stat., ch. 110, §§2-1117 and 2-1118 (Smith-Hurd Supp. 1987).

^^ Supra, note 41, 1987 Pocket Part, at 38.

^' In Michigan, the legislation abolishes joint and several liability where a plaintiff has
been contributorily negligent, but provides for reallocation if the plaintiff is unable to
recover from any one defendant: Mich. PA. 178, 1986, §6304(6).

^^ Supra, this ch., sec. 3(b).

injured person and wrongdoer is said to be inappropriate because the nature
of the injured person's negligence differs from that of the wrongdoer: the
conduct of the injured person has endangered herself only, while the
wrongdoer's conduct has jeopardized the safety of others. Furthermore, it is
unclear what effect a scheme of reallocation would have on the operation of
the tort system as a whole, including such matters as settlement and
litigation behaviour.

4. CONCLUSIONS

Any proposal for reform of the principle of in solidum hability raises a
fundamental question: who should bear the risk of the insolvency or
absence of a concurrent wrongdoer, the injured person or the other wrong-
doer? As we have discussed, the principle of in solidum liability helps to
assure the goal of full compensation to an injured person for losses attribut-
able to the fault of others, a goal that the Commission regards as fundamen-
tally just. Abolition of the rule would mean that some injured persons,
including those who are completely innocent, would remain undercompen-
sated for their losses. In our view, the burden of justifying change clearly lies
with those who propose reforms that would give rise to such a result.

We have not been persuaded that there is a sufficiently strong economic
argument to support the abolition or modification of in solidum liability.
From our review of the current debate in the context of the insurance
"crisis", it seems apparent that, at this time, there exists no persuasive
empirical evidence to support the contention that the principle of in
solidum liability constitutes a significant contributing factor in respect of
the escalating costs and diminished availability of liability insurance. It may
be that reliable data is available, from the insurance industry or elsewhere,
from which conclusions could be drawn concerning the dimensions of the
alleged dysfunctional impact of the rule. However, without such hard
evidence, economic arguments relating to insurance remain necessarily
theoretical and speculative. Moreover, while competing arguments have
been raised regarding the impact of the principle of /« solidum liability on
the goal of deterrence, and on the operation of the tort system as a whole, we
have no sound basis upon which to anticipate the overall effect that
abolition or modification of the rule would have on these aspects of the
existing regime of tort compensation.

As we have discussed,^^ arguments have also been made, in principle,
for the abolition or modification of the principle of in solidum liability on
the grounds of fairness to defendants. However, we have come to the
conclusion that these arguments, like those discussed above, do not weigh
sufficiently in favour of any change to the existing rule.

^^ Supra, this ch., sec. 2(a).

With respect to an innocent plaintiff, the Commission believes that
there is no reason, in principle, to deny full compensation to a person who
has been injured through the fault of another person, and through no fault of
her own. We share the view, often expressed, that whatever unfairness the
operation of the principle of /« solidum liability might create for a concur-
rent wrongdoer who is required to satisfy more than her share of liability, the
inequity would be much greater if a completely innocent victim were to be
undercompensated.

We recognize that the operation of the principle of /« solidum liability
raises more concern where the plaintiff has contributed to her own loss and
where one of the wrongdoers is either insolvent or absent. Arguably, as the
plaintiff's degree of fault increases, the force of claims concerning the
unfairness of incomplete compensation diminishes, particularly where the
degree of fault of the plaintiff exceeds that of the defendant against whom
the entire judgment would be satisfied. It has been suggested that the rule of
in solidum liability should be modified to require an injured person and the
remaining solvent wrongdoer to share the risk of the insolvency or absence
of the other wrongdoer.^"* Our response to this proposal is twofold.

First, we share the view that in many, although not all, instances, the
fault of the injured person and that of the wrongdoer differ in quality and
not just in degree; the negligence of a passenger in failing to wear a seatbelt
differs from that of the careless driver whose conduct caused the accident. In
such a case, the reduction of the plaintiff's claim in an amount proportional
to her contributory negligence may fairly be regarded as a sufficient penalty.

The second response is based on practical considerations. Although the
Commission recognizes some merit in the argument in favour of risk
sharing, we are concerned that a scheme for proportional reallocation of an
insolvent or absent wrongdoer's share of liability could create new uncer-
tainty and potential unfairness. We do not know, for example, what effect
the possibility of reallocation would have on settlement behaviour and
litigation strategy. The degree of fault of the insolvent or absent wrongdoer
could become a new issue to be litigated, as the solvent wrongdoer attempts
to shift part of the burden of the insolvency or absence to the plaintiff We
are concerned that plaintiffs would be encouraged to join all possible
defendants, in order that the degree of fault of a wrongdoer who has not been
made a party not be overestimated. The overall result could be increasingly
complex litigation, with its attendant delay and costs. Moreover, where it is
necessary to make further applications to the court for reallocation of an
uncollectible amount, the result would be additional costs to the parties and
an increased burden on an already overtaxed court system. In our view, the
potential inconvenience and uncertainty that could result from a modifica-
tion of the existing rule of in solidum liability outweighs the occasional
benefit it might offer to concurrent wrongdoers.

See supra, this ch., sec. 3(b).

For the foregoing reasons, the Commission recommends that there
should be no change in the law respecting the in solidum liability of
concurrent wrongdoers to a plaintiff, even where the plaintiff is contribu-
torily negligent.^^

We do, however, wish to address the issue of how the risk of insolvency
or absence on the part of one concurrent wrongdoer should be shared
among a number of solvent concurrent wrongdoers. Where there are more
than two wrongdoers, and one wrongdoer is insolvent or otherwise unavail-
able to satisfy her share of liability, the Negligence Act^^ is silent regarding
how the burden of the insolvent or unavailable wrongdoer's portion of
liability is to be absorbed as between the remaining solvent wrongdoers. In
such a case, we believe it would be equitable, and we therefore recommend,
that the liability of a concurrent wrongdoer who is unable to satisfy her share
of liability should be divided between the remaining concurrent wrongdoers
in proportion to their respective degrees of fault, without discharging the
liability to contribute of the defaulting concurrent wrongdoer. ^^

Recommendations

The Commission makes the following recommendations:

1. There should be no change in the law respecting the in solidum liability
of concurrent wrongdoers to a plaintiff, even where the plaintiff is
contributorily negligent.

2. Where there are more than two concurrent wrongdoers, and one
wrongdoer is insolvent or otherwise unavailable to satisfy her share of
liability, that share should be divided between the remaining wrong-
doers in proportion to their respective degrees of fault, without dis-
charging the liability to contribute of the defaulting concurrent
wrongdoer.

^^ See the Commission's proposed Contribution and Comparative Fault Act (hereinafter
referred to as "Draft Act"), s. 4. The Act appears as an Appendix of this Report.
Contributory negligence is considered infra, ch. 10.

^^ Supra, note 3.

^^ Draft Act, s. 9(6).

CHAPTER 4

THE NATURE AND SCOPE
OF THE RIGHT TO
CONTRIBUTION

1. INTRODUCTION

This chapter considers the nature, as well as the present and appropriate
scope, of a right to contribution among concurrent wrongdoers, including
contract breakers, and those whose civil liability depends upon a common
debt. We shall consider first the common law and equitable background
against which a right of contribution among concurrent tortfeasors was first
introduced in Ontario in The Negligence Act, 1930} In doing so, the
restitutionary principles upon which the right to contribution and other
similar rights are based will become clear. In the next section we examine
the types of liability that currently give rise to the right of contribution and,
after considering the principal objections to and justifications for retaining
the right, we recommend new legislation to extend the range of civil
liabilities from which a right to contribution can arise. Also addressed
briefly are the remedies that should be available to a person who is entitled
to contribution from another.

2. CONTRIBUTION AND RELATED CLAIMS: COMMON LAW,
EQUITY, AND THE PRINCIPLE OF UNJUST ENRICHMENT

We turn first to consider the common law and equitable foundations of
contribution and other related claims.^ While contribution claims are the
primary focus of this Report, related claims involving the discharge of D2's
liability to P by Dl form an important part of the backdrop to our later
discussion of the scope of the right to contribution. Moreover, as we shall
see, the fundamental, unifying principle that underlies all these claims—
and, indeed, that forms the basis of the present statutory right to contribu-
tion among tortfeasors— is essentially the same.

The common features of the several kinds of right to which reference
has just been made are that they enable a person (Dl), who is subject to a
common legal demand with another (D2) to a third person (P), to recover
from D2 the whole or part of a payment made by Dl to P that discharges all

' S.O. 1930,c. 27,s. 3.

^ See, generally, Goff and Jones, The Law ofRestitulion (2d ed., 1978), chs. 12, 13, and 14,
and Fridman and McLeod, Restitution (1982), chs. 11 and 12.

[49 ]

or part of the liability of D2 to P. In the case of contribution, Dl is entitled to
recover from D2 the amount that Dl paid to P that, as between Dl and D2,
exceeded the proportionate share of Dl's liability. Both Dl and D2 are, in
this sense, "equally" responsible for the discharge of the common liability to
P. This is to be distinguished from what has been called "recoupment"; in
the latter case, while both Dl and D2 are liable to P, Dl's right against D2
arises from the fact that D2 is primarily liable and that, under compulsion of
law, Dl has made a payment to P that has discharged fully D2's primary
liability. In the recoupment cases, Dl always seeks total reimbursement,
whereas in the contribution cases Dl seeks to recover only his proportionate
share.

In the case of both contribution and recoupment, D2 has received a
benefit by Dl's payment, since D2's liability to P has been discharged. Put
another way, it may be said that D2 has been unjustly enriched by Dl's
payment discharging D2's liability, whether the extent of the unjust enrich-
ment is merely as to the portion of the payment attributable to D2's share of
the liability (in the case of contribution) or as to the total amount of the
payment (in the case of recoupment). This restitutionary principle of unjust
enrichment forms the basis of nearly all contribution and related claims at
common law and in equity, and provides the underlying rationale of the
right to contribution among concurrent tortfeasors found in the Negligence
Act}

The classic restitutionary analysis, distinguishing contribution from
recoupment and other restitutionary claims, illustrates a somewhat tangled
skein of common law and equitable rules. While, for the most part, these
rules are unified by the governing principle of unjust enrichment, they
depend to some extent on the particular nature of the relationship between
Dl and D2. Indeed, the very distinction between contribution claims and
recoupment claims rests on this factor. We now turn briefly to a considera-
tion of these two sets of claims, beginning with the right to contribution.

Subject to any contractual provision to the contrary, rights of contribu-
tion have been granted by the courts between sureties, joint contractors,
trustees, company directors, partners, co-insurers, mortgagors, and joint
tenants, where one of the parties has paid more than her proportionate share
of the common obligation.

It has been said that it was in the surety cases, especially Deering v. The
Earl ofWinchelsea,^ that the nature of the right to contribution was first
determined.^ Before the start of the nineteenth century, it appears that a
claim to contribution had to be founded upon equitable principles, for the

^ Negligence Act, R.S.0. 1980, c. 315.

^ {\m), 2 Bos. & Pul. 270, 126 E.R. 1276 (Ex.).

^ Goff and Jones, supra, note 2, at 211. See, also, ibid., at 212-21.

early common law basically rejected such claims.^ The principles developed
initially by equity for the surety cases— principles that became dominant
after 1873^— were soon extended to the types of relationship noted in the
preceding paragraph. While "[c]omplete consistency of principle has not, of
course, been achieved", the divergences that arose from certain unique
attributes in the various types of relationship were, and remain, "compara-
tively insignificant".^ The governing equitable principle of unjust enrich-
ment permitted the courts to do justice where Dl conferred a benefit on D2
by discharging all or part of the latter 's liability to P, whether Dl and D2 were
jointly or only severally liable.^ The analogy of the surety cases continues to
prevail in almost all cases where concurrently liable obligors are involved.

A notable exception was in the case of concurrently liable tortfeasors.
As a general proposition, at common law no right of contribution was given
to a concurrent tortfeasor (Dl) who had discharged her liability to P
(whether as a result of an out-of-court payment or an adverse judgment) and
thereby satisfied, in whole or in part, P's cause of action against another (D2)
whose tortious conduct caused the same loss to P. The prohibition began in
the case of joint tortfeasors,'^ but was later said to govern the rights of
several, concurrent tortfeasors. •' At first blush, one would have expected
equity, animated by the restitutionary principle of unjust enrichment, to
have extended its reach to concurrent tortfeasors; but, somewhat surpris-
ingly in light of its expansion elsewhere, no such development took place.

The general refusal of the common law to countenance claims for
contribution among concurrent tortfeasors is usually traced to the decision

^ Ibid., Sit23l

'' Ibid., at 2\3.

^ Ibid., Sit 2n.

^ This is not to suggest that the law is completely satisfactory. For example, the equitable
doctrine of contribution applies in the case of trustees where they are both wrongdoers.
Trustees are liable in solidum to the beneficiaries for any loss caused by a breach of trust.
A trustee can claim by way of contribution from her co-trustees any sum that she has
paid to a beneficiary in respect of a breach of trust, for which all the trustees are liable,
that exceeds the total liability divided by the number of solvent trustees (see Waters, Law
of Trusts in Canada (2d ed., 1984), at 1006-08). However, the courts have generally
refused to investigate the comparative responsibility of the trustees. Thus, apart from
some exceptional circumstances in which one trustee is entitled to a complete indem-
nity from a co-trustee, the general rule is that the court can only order the trustees to
contribute in equal shares. In its Report on the Law of Trusts (1984), Vol. II, at 374-86,
this Commission recommended that courts be given a much greater discretion to
apportion the liability of trustees inter se.

•^ Merryweather v. Nixan (1799), 8 TR. 186, 101 E.R. 1337 (K.B.); Sutton v. Town of
Dundas (1908), 17. O.L.R. 556 (C.A.); and McGlade v. Pashnitzky and Macey Sign Co.
Ltd (1921), 50 O.L.R. 547, 64 D.L.R. 592 (App. Div).

•• Horwell v. London General Omnibus Co. Ltd (1877), 2 Ex. D. 365, at 379; Till v. Town of
Oakville (1914), 33 O.L.R. 120, 21 D.L.R. 113 (App. Div); and Esten v. Rosen, [1929] 1
D.L.R. 275 (Ont. App. Div). See, generally, Goff and Jones, supra, note 2, at 231 et seq.

in Merryweather v. Nixan.^^ The principal rationale of the rule was that the
law should not allow a person to found a cause of action upon his own
wrongdoing: ex turpi causa non oritur actio. Since the tort involved in
Merryweather v. Nixan was conversion, one might have thought that the
application of the reasoning in that case would be limited to intentional or
similar wrongdoing. However, the rule has been extended to unintentional
torts and, according to Goff and Jones, appears to have been "rapidly and
uncritically accepted"'^ as part of the law until the advent of statutory
reform.'^

The vice of the rule— which was said to have had a "baneful influence
on English law" '^— was that it enabled the injured person not only to select
which concurrently liable defendant to sue, but also by that choice to ensure,
if the plaintiff's action was successful, that the defendant against whom she
proceeded would bear the entire loss. Thus, the effect of the rule in
Merryweather v. Nixan was to prevent the person being sued from shifting
part of the loss to others who were equally liable to the plaintiff, and, indeed,
who might be more culpable than the party who had been required to
compensate the injured person. We shall return to a fuller consideration of
the common law position at a subsequent juncture. '^ Suffice it to note here
that the rule in Merryweather v. Nixan appeared increasingly anachronistic
as fault emerged as the fundamental notion upon which the law of torts
rested. As we have seen, the common law rule was abolished in Ontario in
1930. '7

We noted earlier in this section that the issue of compensation to Dl in
respect of Dl's payment to P may arise not only in the case of contribution,
where Dl has paid more than her proportionate portion of the common
liability shared with D2, but also in the case of recoupment, where Dl, who
is only secondarily liable to P, pays P under compulsion of law and thereby
discharges the full liability of D2, who is primarily liable to P.

The classic statement respecting recoupment appears in Moule v.
Garrett, ^^ where Cockburn C.J. stated:'^

1 9

Supra, note 10.

'^ Goff and Jones, supra, note 2, at 231.

^^ But see Williams, Joint Torts and Contributory Negligence (1951), at 83. Williams
discusses several exceptions to the rule in Merryweather v. Nixan and states that, "[i]n
view of these cases, and other American cases to the same effect, the view may be taken
that, even at common law, the rule. . .applies only as between conscious, wilful,
malicious or intentional tortfeasors". Goff and Jones note that the common law
exceptions to the rule were few {supra, note 2, at 231).

15
16

Ibid.

See infra, this ch., sec. 3(a)(i).

^^ See supra, note 1.

'^ (1872), 7-8 L.R. Exch. 101. See, generally, Goff and Jones, supra, note 2, ch. 14.

Supra, note 18, at 104.

Where the plaintiff has been compelled by law to pay, or being compellable by
law, has paid money which the defendant was ultimately liable to pay so that
the latter obtains the benefit of the payment by the discharge of his liability;
under such circumstances the defendant is held indebted to the plaintiff in the
amountJ^^l

Unlike the right to contribution, the origins of which may be traced to
equity, the "right to claim money paid as on the compulsory discharge of
another's liability has its roots in the common law action of money paid".-^'
This right to recoupment has been described as being a quasi-contractual
right,^^ often said to rest on the implied promise by D2 to reimburse Dl.
This latter notion has not been finally dispelled in England. Canadian
courts, on the other hand, have been much quicker to recognize that D2's
obligation to reimburse Dl is often imposed by operation of law, and that
whether the law will impose an obligation has much more to do with
restitutionary principles of unjust enrichment than with the presumed
intention of the parties.-^^

Viewed in this light, there are obvious similarities between the equit-
able right to contribution and the common law rule that enables Dl to
recover compensation from D2 where Dl has been compelled by law to
discharge an obligation that, as between Dl and D2, rested primarily or
ultimately upon D2. Even in England, the leading commentators state
unequivocally that the "basis of this right [to recoupment] is similar to that
which underlies the right to contribution". ^^^ Moreover, the English Court of
Appeal has recently noted the resemblance between the statutory right to
contribution among tortfeasors and the common law claim for money paid
to the use of the defendant who has, pro tanto, been relieved of a liability to
a third party. ^^ The principal difference is that a right to contribution
generally enables Dl to shift to D2 part of the cost of Dl's payment to P,
whereas under the common law rule respecting recoupment, Dl is normally
entitled to be reimbursed by D2 for the whole amount.

Despite the broad restitutionary basis of the claim to recoupment, the
types of case in which the rule in Moule v. Garrett has been applied have

^^ It bears noting here that another prerequisite to a successful claim for recoupment is that
Dl must not have officiously exposed herself to liability to P in order to make the
payment.

^' Fridman and McLeod, supra, note 2, at 348.

^^ Goffand Jones, supra, note 2, at 258.

^^ The decision in Deglman v. The Guaranty Trust Co. of Canada and Constant ineau,
[1954] S.C.R. 725, [1954] 3 D.L.R. 785, contains the first important statement of general
principle in this area of the law by the Supreme Court of Canada.

^'^ Goffand Jones, supra, note 2, at 244.

25 Ronex Properties Ltd v. John Laing Construction Ltd. , [ 1983] Q.B. 398, at 407, [ 1982] 3
All E. R. 961 (C.A.).

been relatively restricted. ^^ However, it has also been said that the very
nature of the principles governing recoupment means that the existing
categories of cases are not, in fact, closed.^^

Before we turn to an assessment of the present law, brief mention
should be made of one further, and related, type of restitutionary relief,
namely, subrogation, which has been said to be similar to a claim for
recoupment.^^

Although the extent to which the courts recognize a generalized right to
subrogation to prevent unjust enrichment is as yet unclear,^^ the situations
in which such a right is already accepted may be rationalized as follows.
Subject to contractual terms, a right to subrogation may be given where a
payment by Dl to P, which Dl is generally required by law to make, has
conferred a benefit upon D2— often by discharging a liability to P— and
where it is just to allow Dl the benefit of any rights or property available to P
against D2. In other words, Dl essentially stands in the shoes of P to enforce
P's rights against D2.

While the "actual origins of the doctrine of subrogation are unclear. . .
[t]he doctrine. . .appears to have originally developed in both law and
equity" and "can be regarded as a doctrine of general application through-
out the law of restitution".^^ One of the most familiar situations in which a
right to subrogation arises is when a surety has been required by the creditor
to pay on the surety's guarantee. The surety is entitled to enforce any
security that the creditor has taken from the principal debtor. An indemnity
insurer also has a right to be subrogated to the assured's cause of action
against a person who is legally liable to the assured for the loss.^' In addition.

^^ Goff and Jones, supra, note 2, at 245. The most familiar situations include the right of
the original lessee of premises to recover from the assignee of the lease any sum that the
former has been required to pay to the lessor for a breach of covenant committed while
the assignee was in possession. Other cases concern a person whose goods have been
distrained by a lessor while they were, with the consent of the tenant, on the leased
premises. Since the tenant has the ultimate obligation to pay the rent, the owner of the
distrained goods can recover from the tenant what the owner was required to pay to the
lessor in order to obtain the goods. The owner's payment will have discharged the
tenant's arrears in rent. A surety's right to indemnity from the principal debtor may also
be explained on similar principles. Finally, recoupment has been allowed in cases of
abatement of nuisances.

Ibid.

^^ At one point, Fridman and McLeod state that there is a similarity at a "definitional
level" (supra, note 2, at 347, n. 3). At another point, the authors say that the "doctrine
[of subrogation] is similar to the rules regulating the compulsory discharge of another's
liabihty" (ibid., at 385).

For a conservative view of the applicability of subrogation, see Orakpo v. Manson
Investments Ltd., [1978] A.C. 95, [1977] 3 W.L.R. 229 (H.L.). See, generally, Goff and
Jones, supra, note 2, ch. 27.

^^ Fridman and McLeod, supra, note 2, at 386.

•^' But here, it should be noted, the insurer's payment does not discharge the wrongdoer's
liability to the assured.

subrogation has been used in bills of exchange cases, trust cases, and "other
cases not falling within these subject areas where the general policy con-
siderations which led to the invocation of the doctrine in such areas were
also present". ^^

As in the case of contribution and recoupment, the principles in one
area of the law of subrogation are not always entirely consistent with those
developed in the other areas. However, a great deal of similarity exists,
particularly in respect of basic philosophy. Not surprisingly, it has been
observed that "the doctrine [of subrogation] is imposed to prevent an unjust
enrichment". ^^

As we said at the outset, recoupment, subrogation, and contribution
(including the statutory right to contribution among tortfeasors)^"^ exhibit
certain broad, common features that make it possible, despite certain
doctrinal differences, to identify a uniform rationale, namely, the restitu-
tionary principle of unjust enrichment. We shall return to this theme in the
following sections, where we consider the adequacy of existing rights to
contribution.

3. THE SCOPE OF THE RIGHT TO CONTRIBUTION

(a) Torts

(i) Should the Right to Contribution Be Abolished?

As we have seen, in Ontario, as in other common law jurisdictions,
rights of contribution among tortfeasors are the product of statute. When
reform was under active consideration in the United States, a spirited
defence of the rule in Merryweather v. Nixan,^^ but not its original rationale,
was made in a short article written in 1941 by Professor Fleming James Jr. of
the Yale Law School. ^^ James' main argument is that an essential function
of the law of torts is the efficient and equitable distribution of loss. An

^^ Fridman and McLeod, supra, note 2, at 386. The authors comment that "[w]hether the
cases falhng outside the estabhshed heads of subrogation are classed as examples of
subrogation or a right akin to subrogation is in large part a matter of semantics" {ibid.).
See, also, ibid., at 408.

Ibid.

^^ Goff and Jones state {supra, note 2, at 231) that, while "a tortfeasor's claim to
contribution is sui generis [in that it is statutory]. . .the broad principles governing it are
not dissimilar from the equitable principles which were established in Peering v. The
Earl of Winchelsea [supra, note 4]". For a similar view, sec Fridman and McLeod,
supra, note 2, at 378.

^^ Supra, note 10.

^^ James, "Contribution Among Joint Tortfeasors: A Pragmatic Criticism" (1940-41), 54
Harv. L. Rev. 1156. For a reply, see Gregory, "Contribution Among Joint Tortfeasors: A
Defense" (1940-41), 54 Harv. L. Rev. 1170. Further sallies by these commentators are
contained ibid., at 1 178 (James) and 1 184 (Gregory).

injured person who may have a claim for a loss against more than one
person will normally pursue the person from whom she is most sure of
recovering. Thus, the injured person will often seek a corporate defendant or
a person who is insured against the loss. To allow the defendant who is sued
by the plaintiff to claim contribution will often have the effect of redistribut-
ing the plaintiff's loss to those who are likely to be less well placed to pass it
on. Typically, this will be from an insurance company to an uninsured
individual, a result, James argues, that is economically inefficient and
socially unjust. He also points out that as the incidence of insurance
increases, the absence of a right to contribution will have no serious adverse
effects upon insurance premiums, since, over time, insurance companies
are likely to be the beneficiaries as often as they are the "victims" of a
defendant's inability to redistribute the loss for which the defendant is liable
to the plaintiff.

A well-known illustration of the argument that a right to contribution
or indemnity may well work hardship or frustrate policies of fair and
efficient loss distribution is provided by the decision of the House of Lords
in Lister v. Romford Ice and Cold Storage Co. Ltd. ^^ In that case, the insurer
of an employer, who had been held vicariously liable for personal injuries
caused by an employee, required the employer to sue for an indemnity from
the employee-tortfeasor.^^ The duties owed by parents to take reasonable
care to protect their children from injury may also give rise to contribution
claims from insured drivers who negligently injure a child. ^^

In addition to the arguments based upon equitable loss distribution,
opponents of a right to contribution among tortfeasors argue that the
addition of third parties from whom the party-defendant wishes to claim
contribution may make the litigation more lengthy, costly and complex, and

^■^ [1957] A.C. 555, [1957] 1 All E.R. 125 (H.L.).

^^ It should be noted, however, that in all probability this case would have been decided in
the same way even had the rule in Merryweather v. Nixan, supra, note 10, still existed.
The employer was able to rely not only upon his statutory right to contribution, but also
upon an implied term in the contract of employment that the employee would
indemnify the employer against any liability that the employer incurred as a result of the
employee's negligence.

After this decision, which was widely criticized, the insurance industry in England
agreed that insurance companies would generally not exercise any right of subrogation
when the employer was vicariously liable for an injury caused by one of the employees
to a co-employee. For a case that arose out of a situation not covered by this "under-
standing", see Morris v. Ford Motor Co. Ltd., [1973] Q.B. 792, [1973] 2 All E.R. 1084
(C.A.) (insurer refused a right to be subrogated to employer's right of action against
employee for injury done to an employee of another company). But see Greenwood
Shopping Plaza Ltd v. Beattie and Pettipas , [1980] 2 S.C.R. 228, 111 D.L.R. (3d) 257,
where an insurer was subrogated to the rights of its assured, a lessor, for damage to the
demised premises that was caused by the negligence of the tenant's employees.

The facts o^ Arnold v. Teno, [1978] 2. S.C.R. 287, provide an illustration, although, as it
happened, the parent was not found to have been negligent.

that this can only be to the detriment of the plaintiff.'*^ The plaintiff's
procedural and tactical advantages that flow from being in control of the
action should not, it is argued, be lightly dissipated. Moreover, many
contribution schemes contain provisions that prejudice the plaintiff's rights,
in the sense that the plaintiff may be worse off than she would have been had
one of the defendants been the sole tortfeasor. For instance, under the
American Uniform Comparative Fault Act, approved by the National
Conference of Commissioners on Uniform State Laws,'*' a plaintiff (espe-
cially if contributorily negligent) may be required to bear part of the risk of
the insolvency of one defendant; or if the plaintiff makes a poor settlement
with Dl, she may be unable to obtain full satisfaction from 02.^*2

Finally, it is argued, the reason contribution makes such a strong appeal
to our notions of justice is that we imagine the individual defendant having
to bear what might be a single, crippling loss as a result of one, perhaps
isolated, negligent act that has produced grave injurious consequences for
the plaintiff. To force this hapless individual to meet the entire loss, while
another equally negligent person walks away scot free, is intolerable. But this
image of the typical tortfeasor is but a caricature of reality, which is that, in a
great and increasing number of cases, defendants are insured; indeed, if they
are owners of vehicles they are legally required to carry insurance. The true
"defendants" are insurance companies who have exacted premiums for the

^^ Another commentator, writing more than forty years after Commonwealth jurisdic-
tions first abolished the rule in Merryweather v. Nixan, supra, note 10, sums up his
position as follows (Weir, Int'l Enc. Comp. L. XI Torts (1983), ch. 12 (Complex
Liabilities), at 78):

The right of recourse is born of the fear that the victim [P] will act arbitrarily and
the desire to promote equality between all those liable, an increasing number, by
bringing the loss home to those responsible. But the institution [that is, the right to
contribution], as developed, leads not only to complexities beyond the tolerable,
but also to unfairness at every step. Thanks to this device, prompted as it is by
powerful ideals, the victim finds his rights curtailed, their vindication complicated
and their settlement impeded. Thanks to this device also, the contributor finds
himself liable when he would not otherwise be liable for longer than he would
otherwise be, and liable to be sued a second time. That all this should be done at the
instance and for the benefit of one who was ex hypothesi liable to the victim seems
really excessive.

It is also worth noting that Dean Cecil A. Wright's attitude to the statutory abolition of
the common law rule prohibiting contribution amongst tortfeasors was somewhat
skeptical:

Apart from fundamental questions of policy, the contribution statutes certainly
open a number of new problems whose very complexity may in the end, outweigh
the theoretical value of spreading liability according to fault.

Wright, Cases on the Law of Torts (4th ed., 1967), at 393. The matter is discussed ibid., at
392-93.

"*' National Conference of Commissioners on Uniform State Laws, Uniform Comparative
Fault Act, Uniform Laws Annotated, Vol. 12 (1987 Pocket Part), §2(d). The Act was
approved by the Commissioners in 1977.

^'^ See, for example, the Irish Civil Liability Act. 1961, No. 41, s. 17(2).

policies and then try, through subrogation and contribution, to shift onto
other shoulders the cost of the risk that they have bargained with the assured
that they will bear. To allow the loss to lie where it falls will, in the long run,
benefit insurers as often as it harms them.

There are a number of ways in which these objections to contribution
may be met. First, the argument assumes that the primary function of the
law of torts is to distribute loss to those best able to bear it. But this ignores
the importance of fault, which, for better or worse, still permeates the law of
torts. Even if it is accepted that our law should be moving towards an
insurance-based no-fault system of liability, it has not yet done so. To
attempt to give partial effect to this ideal indirectly through the law of
contribution seems less than satisfactory. The issue needs to be met head on
by reforming, if necessary, the primary rights and obligations between the
injured person and the wrongdoer. The tail of secondary obligation should
not wag the dog of primary hability.

Secondly, simply to abolish the right to contribution among wrong-
doers would be an unsatisfactory way of achieving the goals of the abolition-
ists. For it would leave decisions about the optimal distribution of loss to the
plaintiff when she exercises her choice of defendants. It does not necessarily
follow that a plaintiff will always select as defendant the institution or person
who can most efficiently distribute the loss that the plaintiff has suffered.
For instance, one wrongdoer may be selected by the plaintiff because the
other is out of the jurisdiction. And what if the plaintiff selects, in error
perhaps, a defendant who is not insured? Or what if all possible defendants
carry insurance? Moreover, a right to contribution does not necessarily shift
a loss from the financially strong to those less well endowed, because lack of
resources may as effectively insulate a person from a claim for contribution
as from a claim for compensation by the injured person.

Thirdly, it is also possible that the abolition of a right to contribution
may discourage those who engage in risk-creating activities from insuring
against injury to another, in the hope that someone else will be insured and,
consequently, more likely to be sued by the injured person. By exposing all
who engage in activities that entail a risk of injury to others to the possibility
that they will have to bear a portion of any losses caused by their activities,
the law encourages the taking of proper care and the purchase of insurance.
A right of contribution thus may well promote the proper allocation of loss
by "internalizing" the risk.

Despite the attractiveness of some of the arguments advanced against a
right to contribution among tortfeasors, the Commission does not recom-
mend its abolition. Under the present fault-based tort regime, the Commis-
sion is firmly of the view that, as a matter of fairness, a right to contribution
is essential in order to preclude the unjust enrichment of the non-paying
concurrent wrongdoer. It may well be that a right to contribution would not
be efficacious or desirable under another type of legal regime. Accordingly,
the existence of such a right should be considered in the context of any

fundamental re-examination of the bases of primary liability for personal
injuries and the merits of extending compulsory insurance to a much wider
range of risk-creating activities. More limited solutions to the problem
illustrated by Lister v. Romford Ice and Cold Storage Co. Ltd. could include,
for example, amendments to the Insurance Act^^ to extend the benefit of the
policy to all whose activities are covered by it.

(ii) The Present Law

Having rejected, as a matter of policy, the abolition of a right of
contribution among tortfeasors, we now turn to consider the scope of the
present right of contribution under the Negligence Act.

Section 2 of the Ontario Negligence Act^^ provides for a right of
contribution "[w]here damages have been caused or contributed to by the
fault or neglect of two or more persons": the court is to determine the degree
in which each is "at fault or negligent" and make an order for contribution
accordingly. Later sections of the Act, which deal with more specific points
of the scheme, refer simply to a "tort feasor". Thus, section 3 provides for a
right to contribution after one person has made a settlement with the injured
party. "^^ The person claiming contribution and the person from whom it is
claimed are designated as "tort feasors". The same terminology is used in
section 9,^^ which provides for the effect upon a contribution claim of the
expiry of a limitation period within which P must sue D2.

^'^ R.S.0. 1980, c. 218.

^^ Supra, note 3. A specific right of contribution is provided by the Securities Act, R.S.O.
1980, c. 466, s. 126(8), among those liable under s. 126(1) for misrepresentations in a
company prospectus.

"^^ Section 3 reads:

3. A tort feasor may recover contribution or indemnity from any other tort
feasor 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
such damage, and thereafter commencing or continuing action against such other
tort feasor, in which event the tort feasor settling the damage shall satisfy the court
that the amount of the settlement was reasonable, and in the event that the court
finds the amount of the settlement was excessive it may fix the amount at which
the claim should have been settled.

^^ Section 9 reads:

9. Where an action is commenced against a tort feasor or where a tort feasor
settles with a person who has suffered damage as a result of a tort, within the
period of limitation prescribed for the commencement of actions by any relevant
statute, no proceedings for contribution or indemnity against another tort feasor
are defeated by the operation of any statute limiting the time for the commence-
ment of action against such other tort feasor provided,

(a) such proceedings are commenced within one year of the date of the
judgment in the action or the settlement, as the case may be; and

(b) there has been compliance with any statute requiring notice of claim
against such tort feasor.

A literal construction of the Negligence Act might support an argument
that, although the scope of section 2 is limited to those torts that involve
"fault or negligence", the scope of sections 3 and 9 extends to all torts. Such
an interpretation would, however, produce serious anomalies. For instance,
it could mean that a right to contribution would be available following a
settlement between the injured person and any type of tortfeasor, but that
there would have been no such right had the injured person obtained
judgment against a tortfeasor who was not "at fault or negligent". Nor
would it make any sense to say that section 9 enables a right of contribution
to be claimed after the expiry of a limitation period, but that if the tort on
which the claim depends is not one involving "fault or neglect", then no
claim could have been made if a limitation period had not expired, so that
resort to section 9 would have been unnecessary.

The better interpretation is to treat section 2 as the principal section
and to read the reference to "tort feasors" in the later sections as limited to
those who have committed torts that fall within section 2. This raises the
more important question of what torts are included within section 2. It
should also be noted that the availability of the partial defence of contribu-
tory negligence provided by section 4^^ is similarly limited to "any action for
damages that is founded upon ihQ fault or negligence of the defendant if fault
or negligence is found on the part of the plaintiff that contributed to the
damages". "^^

At times, the courts have taken a narrow view of the scope of these
sections and limited them to cases in which the plaintiff's action was for the
tort of negligence.'*^ Indeed, the very title of the Negligence Act may seem to
support this conclusion. ^^ A slightly more expanded version of this
approach can be found in some cases in which the Act has been held to apply
to tortfeasors who may not actually have been sued for the tort of negli-
gence, but whose conduct could have supported such an action.^' More
recently, however, the Ontario Court of Appeal has adopted a significantly
wider interpretation of the word "fault" and stated that it includes "a breach

48
49

'^^ Section 4 reads:

4. In any action for damages that is founded upon the fault or negligence of the
defendant if fault or negligence is found on the part of the plaintiff that contrib-
uted to the damages, the court shall apportion the damages in proportion to the
degree of fault or negligence found against the parties respectively.

Contributory negligence is discussed infra, ch. 10.

See Cheifetz, Apportionment of Fault in Tort (1981), at 24-36, where the author also
draws attention to dicta that seem to limit s. 2 to joint tortfeasors, but which he
convincingly demonstrates do not correctly state the law.

^^ See, in particular, Aselstine v. McAnallv, [19501 O.W.N. 229 (H.C.J. ); Hollehone v.
Barnard, [1954] O.W.N. 235, [1954] 2 D.L.R. 278 (H.C.J. ); Acker v. Kerr (1973), 2 O.R.
270, 42 D.L.R. (3d) 514 (Co. Ct.); and Chernesky v. Armadale Publishers Ltd. (1974), 53
D.L.R. (3d) 79, [1974] 6. W.W.R. 162 (Sask. C.A.).

^' See, for example, Parmley v. Parmlev, [1945] S.C.R. 635, at 650, [1945] 4 D.L.R. 81, and
Albion V. Cochrane, [1969] 2 O.R. 184, 4 D.L.R. (3d) 667 (Co. Ct.).

of statute or other act or omission giving rise to a liability in tort whether
negligent or not".^^ It has also expressly disapproved earlier cases that had
confined the Act to the tort of negligence, and has endorsed the following
statement of its scope:^^

Fault and negligence, as these words are used in the statute, are not the
same thing. Fault certainly includes negligence, but it is much broader than
that. Fault incorporates all intentional wrongdoing, as well as other types of
sub-standard conduct.

It would thus seem clear that, at the level of the Court of Appeal at least, the
Ontario Negligence Act provides for a right of contribution in respect of
torts that are based on some blameworthy conduct, including intentional
torts,^"^ and may even, perhaps, extend to torts of strict liability. ^^

(iii) The Case for Expansion

If it is accepted that rights of contribution are given in order to prevent
the unjust enrichment of D2, whose liability to P has been discharged by the
payment by Dl to P, then there is little reason to limit contribution by
reference to the kind of tort committed by Dl.^^ However, one possible
situation in which contribution may be thought inappropriate is where Dl's
tort is intentional, especially if it also amounts to a criminal offence. For

52 Dominion Chain Co. Ltd. v. Eastern Construction Co. Ltd. (1976), 12 O.R. (2d) 201, at
206, 68 D.L.R. (3d) 385 (C.A.), per Jessup J.A., aff'd {sub nom. Giffels Associates Ltd. v.
Eastern Construction Co. Ltd.) [1978] 2 S.C.R. 1346, 84 D.L.R. (3d) 344 (subsequent
references are to [1978] 2 S.C.R.). The Court of Appeal reversed the decision of the High
Court of Justice (1974), 3 O.R. (2d) 481, 46 D.L.R. (3d) 28 (H.C.J.).

53 Bell Canada v. Cope (Sarnia) Ltd (1980), 31. O.R. (2d) 571 (C.A.), at 572, quoting from
the judgment of Linden J. below ((1980), 1 1 C.C.L.T. 170 (Ont. H.C.J.), at 180), which the
Court of Appeal upheld. See Long v. Gardner (1983), 144 D.L.R. (3d) 73 (Ont. H.C.J.),
where s. 4 of the Negligence Act, supra, note 3, was held to apply to the tort of
intentional assault. See, also, Anderson and G. W. Anderson Holdings Ltd. v. Stevens
(1981), 29 B.C.L.R. 355, 125 D.L.R. (3d) 736 (S.C), where contribution was allowed
between fraudulent and negligent tortfeasors.

5"* In Parmley v. Parmley, supra, note 51, the Supreme Court of Canada did not affirm the
statement in the British Columbia Court of Appeal that the statute applied to inten-
tional as well as negligent trespass.

55 Only the dictum of Jessup J.A. in the Dominion Chain Co. Ltd. case, supra, note 52,
supports this view, although Dokuchia v. Domansch, [1945] O.R. 141, [1945] 1 D.L.R.
757 (C.A.) would also seem to be to this effect. Inconsistent with this view is Pickin v.
Hesk and Lawrence, [1954] O.R. 713, [1954] 4 D.L.R. 90 (C.A.), in which a claim for
contribution was made by an employer against a person for whose tortious conduct he
had been held vicariously liable. See, however, Lang v. Hooey, [1932] O.R. 363, [1932] 2
D.L.R. 778 (C.A.), and Flamant v. Knelson (1971), 21 D.L.R. (3d) 357 (B.C.S.C).

5^ That there are no general reasons of public policy for denying a right to contribution in
respect of strict liability is indicated by the Dog Owners' Liability Act, R.S.O. 1980,
c. 124. Under this Act, a person may be liable for personal injuries caused by her dog,
irrespective of any fault on the part of the owner (s. 2(3)), and a right of contribution
(s. 2(4)) can arise even though the defendant was not at fault.

instance, should a thief, who has been held liable to P for the conversion of
P's goods, recover contribution from the innocent purchaser to whom the
thief sold them, who, in turn, may well also be liable to the true owner for
conversion or detinue? In most cases, it is suggested, a court will be able to
take into account any dishonesty or other form of intentional wrongdoing
by Dl by the exercise of its discretion to apportion the amount of contribu-
tion payable in accordance with the defendants' respective degrees of fault.
In the hypothetical suggested above, the quantum of D2's contribution
would almost certainly be nil.

What then of the case where the torts of both Dl and D2 amount to
criminal offences for which a guilty intention is required? Should a thief be
entitled to contribution from the thief's accomplice who disposed of the
property in full knowledge that it had been stolen? There is a natural
reaction against requiring the courts to adjust the mutual rights and obliga-
tions of those who have deliberately broken the law. It is tempting to fall
back upon the maxims ex turpi causa non oritur actio and in pari delicto
potior est conditio possidentis. In addition, a right to contribution will
undermine any punitive or deterrent aspects of liability for intentional torts,
including cases in which the conduct in question is criminal. ^^

More careful analysis strongly suggests, however, that the above max-
ims do not always provide a satisfactory solution. First, there is the difficulty
of defining the tortious conduct that would be excluded from a right to
contribution; to exclude torts that are also crimes is unsatisfactory because
this could include minor offences or offences of strict liability. To define the
exception in terms of "serious crimes" or "crimes of moral blameworthi-
ness" may be unduly vague. Alternatively, a defendant could be denied a
right to contribution if the defendant has committed an intentional tort. But
this is also likely to be an inadequate method of screening out those persons
who ought not to be allowed to profit from their own wrong. Is it so clear
that the intentional trespasser to land, for example, is obviously less entitled
to relief, than, say, the grossly negligent driver who kills a pedestrian?

Secondly, it might be argued that the punishment of wrongdoing is
principally the function of the criminal law, with its special evidentiary rules
and procedural protections. It is not easy to see why D2, who may be as
morally blameworthy as Dl, should reap the benefit of a rule designed to
penalize Dl. Nor is it inherently likely that an absolute denial of contribu-
tion will deter potential wrongdoers: such a regime offers one wrongdoer the
chance of keeping the fruits of her crime. ^^ Experience suggests that a high
probability of detection and punishment is a more effective deterrent than a

C-7

These considerations appear to have been influential in the decision of the Supreme
Court of the United States to deny a right to contribution to those found guilty of anti-
competitive conduct and liable to pay treble damages: see infra, notes 71-73.

Criticisms along these lines have also been levelled at the common law rule that a party
to an illegal contract is generally barred from recovering any money paid or benefit
conferred under it: see Goff and Jones, supra, note 2, at 340-42.

low probability of suffering a Draconian penalty. In any event, each wrong-
doer will normally be required to bear part of the loss caused by the unlawful
conduct.

Thirdly, whatever policy is sought to be achieved by excluding certain
torts from an accompanying right to contribution is always at the mercy of
the plaintiff's choice of defendant. If Dl and D2 are both blameworthy, then
it seems somewhat capricious to allow P to choose upon whom the entire
burden of the loss is to fall. The loss that could fall upon Dl may be quite
disproportionate to the seriousness of Dl's wrong, especially if the other
wrongdoer escapes.

A further question is whether a defendant who has been held liable to
pay punitive damages to the injured person should be able to claim contri-
bution from other persons who are concurrently liable to the plaintiff. Of
course, the issue arises only where D2 is (or would, if sued) be liable to pay a
sum that is at least as great, and in respect of the same loss, as Dl. If D2 is not
so liable, then Dl's payment confers no benefit upon D2, for Dl's payment
has not discharged a liability that D2 would otherwise have had to bear.^^

It may be argued that the purpose of imposing punitive damages is to
punish and deter, and that these purposes will be frustrated if the defendant
is allowed to pass on part of her "punishment" to another. It is submitted,
however, that the reasoning here is no more attractive than the arguments
considered above for excluding from potential contribution claims inten-
tional tortfeasors or those whose torts constitute crimes. The deterrent effect
of refusing contribution must be, at best, equivocal. And to concentrate on
the justice of Dl's "taking her punishment" ignores the fact that another
wrongdoer is escaping. Again, if there were no right of contribution, then the
plaintiff's choice of defendant would determine which wrongdoer was to be
punished.

(iv) Other Jurisdictions

Statutes in other jurisdictions differ quite markedly in their approach to
the range of torts that can give rise to a right to contribution. For instance,
section 6(1) of the English Law Reform (Married Women and Tortfeasors)
Act, 1935^^ provided that a right to contribution arose "[w]here damage is
suffered by any person as a result of a tort (whether a crime or not). . .".
Although the words in parenthesis are not included in the more recent Civil
Liability (Contribution) Act 1978,^^ there is no indication that Pariiament in

^^ See, generally, infra, ch. 8, sec. 2, dealing with the calculation of the sum to be paid by D2
toDl.

^^ Law Reform (Married Women and Tortfeasors) Act, 1935, c. 30 (U.K.).

^^ Civil Liability (Contribution) Act 1978, c. 47 (U.K.). Section 9(2) of this Act repealed
s. 6 of the 1935 Act.

any way intended to impose a narrower scope to the wrongs capable of
giving rise to a claim to contribution. Indeed, since the 1978 Act has given a
right to contribution in respect of a much wider range of civil liabilities than
that contemplated by the earUer statute,^^ it is unlikely that the omission of
any specific mention of intentional wrongs should be regarded as signalling
a legislative intention to limit the availability of contribution. The Irish Civil
Liability Act, 1961^^ specifically includes in the definition of "wrongdoer" a
"person who commits or is otherwise responsible for a wrong", "whether or
not the act is also a crime, and whether or not the wrong is intentional".^"^
The Report prepared by the Alberta Institute of Law Research and Reform
also recommends that a reformed contribution statute should not exclude
intentional torts,^^ and the Uniform Contributory Fault Act, adopted by the
Uniform Law Conference of Canada,^^ includes intentional torts within the
"wrongful act" that may give rise to contribution.^^

On the other hand, many jurisdictions in the United States, and
elsewhere, exclude intentional tortfeasors from contribution claims. ^^ The
1955 American Uniform Contribution Among Tortfeasors Act^^ provided:

1.— (c) There is no right of contribution in favour of any tortfeasor who has
intentionally [wilfully or wantonly] caused or contributed to the injury or
wrongful death.

However, the American Uniform Comparative Fault Act,^^ approved in
1977, does not contain this explicit exclusion. It is also interesting to note in
this context that at one time some Circuit Courts of Appeals in the United
States favoured a right of contribution among those liable to pay treble
damages for breach of the anti-trust laws.^^ Such breaches are always
intentional. However, the Supreme Court has recently held that no right of

Those whose liability may expose them to a claim for contribution are not confined to
tortfeasors, but include those liable for breach of contract and breach of trust {ibid.,
s. 6(1)). See infra, this ch., sec. 3(b).

^^ Supra, noXtAl.

^"^ Ibid., $.2(1).

^^ Alberta, Institute of Law Research and Reform, Contributory Negligence and Concur-
rent Wrongdoers, Report No. 31 (1979) (hereinafter referred to as "Alberta Report"), at
40, Recommendation 9. See, generally, ibid., at 37-40.

^^ Uniform Law Conference of Canada, Proceedings of the Sixty-Sixth Annual Meeting
(1984), Appendix F, Uniform Contributory Fauh Act .

^^ Ibid., s. 1.

^^ See Weir, supra, note 40, at 64-65.

National Conference of Commissioners on Uniform State Laws, Uniform Contribution
Among Tortfeasors Act, Uniform Laws Annotated, Vol. 12, §l(c). The Act was approved
by the Commissioners in 1955.

^^ Supra, note 41.

A claim was first allowed in Professional Beauty Supply Inc. v. National Beauty Supply
Inc. , 594 E 2d 1 179 (8th Cir. 1979). For dicta to the same effect, see Heizer Corp. v. Ross,

contribution is available.'^^ It reasoned that since the purpose of the Sherman-
Clayton Acts is to punish past violations and to deter future unlawful
conduct, it would be inconsistent with the legislative policy to imply a right
to contribution. It also held that the limited powers of the courts to develop
federal common law did not authorize their creation of a non-statutory right
of contribution among those liable for a breach of the anti-trust legislation.
However, the Senate Judiciary Committee and the Anti-Trust Law Section
of the American Bar Association have recommended the legislative adop-
tion of contribution provisions in such suits.^^

(v) Conclusions

The Commission has concluded, and therefore recommends, that the
right to contribution among concurrent tortfeasors should be available in
respect of any tort committed by more than one defendant whose conduct
has contributed to a single loss sustained by the plaintiff. ^"^ The criminal
nature of the tort, the fact that it was committed intentionally or that the
damages paid by a defendant include a penal or punitive element, should
not automatically bar a right of contribution.^^ Such factors will be relevant,
however, to the court's exercise of discretion over the quantum of contribu-
tion awarded, a topic discussed in chapter 8 of this Report.

(b) Other Kinds of Civil Liability

The next question is whether wrongdoers who are not tortfeasors but
who have caused a single loss to an injured person should enjoy the same

601 F. 2d 330 (7th Cir. 1979). For an analysis of Professional Beauty Supply Inc., see
Stevenson, "Contribution Among Antitrust Violators: Professional Beauty Supply Inc.
V. National Beauty Supply Inc.'' (1979-80), 21. B.C.L. Rev. 969. A claim was subse-
quently denied in Wilson P. Abraham Construction Corp. v. Texas Industries Inc. , 604 E
2d 897 (5th Cir. 1979). The issues are well discussed in Schwartz, Simpson and Arnold,
"Contribution in Private Actions under the Federal Antitrust Laws" (1979), 33 Sw. L.J.
799. See, also, Note, "Contribution in Private Antitrust Actions" (1980), 93 Harv L.
Rev. 1540.

"^2 Texas Industries, Inc. v. Radcl iff Materials, Inc. 451 U.S. 630 (1981). See, also, British
Airways Board V. Laker Airways Ltd , [1984] Q.B. 142, [1983] 3 All E.R. 375, at 385, and
[1983] 3 All E.R. 395 (C.A.), at 407, rev'd [1985] A.C. 58, [1984] 3 All E.R. 39 (H.L.).

^^ See Millstein, "Contribution under Antitrust Laws: Is Consensus Emerging?", Nat. L.J.
(November 19, 1979), at 22 et seq. And see Polden and Sullivan, "Contribution and
Claim Reduction in Antitrust Litigation: A Legislative Analysis" (1983), 20 Harv J.
Legis. 397.

Also of interest in this context is the Report of Consumer and Corporate Affairs
Canada, Proposals for a Securities Market Law for Canada (1979), which includes a
right to contribution among those who violate the provisions of the proposed draft
Canada Securities Market Act (see s. 13.18). For commentary on the recommendations
contained in this Report, see Vol. 2, at 279-80.

'^^ See the Commission's proposed Contribution and Comparative Fault Act (hereinafter
referred to as "Draft Act"), s. 3(l)(a). The Act appears as an Appendix of this Report.

^5 Draft Act, s. 7(1).

rights of contribution inter se as are afforded by statute to tortfeasors. The
principles of restitution suggest an affirmative answer, for whether the
liability of Dl or D2 to P arises from a tort, a breach of a contract, or a breach
of a statutory or fiduciary duty, Dl's legally required payment to P will
benefit D2 by discharging an obligation that D2 owes to P, thus saving D2 an
expense she would otherwise have had to bear. It is difficult to see why the
particular type of civil liability discharged should determine whether D2 has
thereby been unjustly enriched by retaining, without paying for, the benefit
that Dl has incidentally conferred upon her.

(i) The Present Law

It is now quite clear that a person whose liability to the injured person
sounds solely in contract cannot rely upon the Ontario Negligence Act as the
legal source of any right to contribution against another,^^ whether tortfea-
sor or contract breaker, whose wrongful conduct has also caused the damage
for which Dl has compensated P, even though Dl's payment will have
discharged or pro tanto reduced D2's liability to P. This was one of the issues
considered by the Supreme Court of Canada in Giffels Associates Ltd. v.
Eastern Construction Co. Ltd. ^^ In this case, P, the owner of a building, had
entered into a contract with Dl, a firm of architects and engineers, to design
and supervise the construction of a roof. P made another contract with D2,
general building contractors, who were to do the work. The roof proved
defective, and P sued Dl and D2 for his loss. The trial judge found that the
damage had occurred as a result of the carelessness of both Dl and D2, and
that, as between the defendants, D2 was 75 percent at fault. However, P
failed to recover against D2, because a clause in the contract between P and
D2 barred P from making a claim after Dl had issued the final certificate. In
addition, D2's guarantee was limited in time, and P sued after the guarantee
period had expired. The trial judge, nonetheless, ordered D2 to contribute to
Dl for 75 percent of the damages that Dl had been required to pay P. D2's
appeal against this part of the judgment was successful.

For present purposes, two aspects of the judgments delivered by the
Ontario Court of Appeal and the Supreme Court of Canada are important.
First, the Court of Appeal held, by a majority, that Dl and D2 were, prima
facie, tortfeasors who had damaged the plaintiff as a result of a breach of
their common law duty to exercise due Care. The fact that there was a
contractual relationship between the parties— and one that included a duty
of care— did not exclude the possibility of their also being liable in tort.^^

^^ See Cheifetz, supra, note 49, at 24-26. However, if P could have sued in either tort or
contract, Dl will be able to obtain contribution even though P chooses to allege only a
breach of contract. See Aselstine v. McAnally, supra, note 50. One would expect a
similar result where Dl's liability amounted to both a tort and a breach of trust. Tortious
liability based on breach of statutory duty is covered by the Negligence Act: Jordan
House Ltd. v. Menow, [1974] S.C.R. 239.

^^ Supra, note 52.

^^ See, also, Viscount Machine & Tool Ltd v. Clarke (1981), 34 O.R. (2d) 752, 126 D.L.R.
(3d) 160 (H.C.J. ), where a land surveyor's negligence in preparing a plan of survey was

Wilson J.A., in a lengthy dissent, concluded, after reviewing the many
authorities, that the parties' liability arose solely from their contractual
relationship with the plaintiff. The defendants were not in a position
analogous to those exercising a "common calling"; moreover, the "indepen-
dent tort" test was not satisfied here."^^ Because the Supreme Court held that
the expiry of the time Umit upon D2's liability to P precluded any possible
right of contribution that Dl might otherwise have had against D2, it did not
have to decide whether the defendants' liability was tortious or exclusively
contractual. Nonetheless, the judgments of the Court of Appeal in Giffels
indicate how uncertain, and arbitrary, the line can be between tortious and
contractual liability.

This observation leads us to the next point to note about Giffels, and
that is the consequences for rights of contribution that follow from the
distinction between tortious and contractual liability. Relying upon earlier
authority, ^^ Jessup J.A. stated quite categorically that what is now section 2
of the Ontario Negligence Act was limited to claims for contribution by
tortfeasors, and that, had the Hability of Dl to P been based solely upon a
breach of its contractual duty of care, no statutory right to contribution
could have arisen. This was the view of all members of the Ontario Court of
Appeal. The Supreme Court did not have to decide this question, although
Laskin C.J.C. was inclined to agree with the Court of Appeal on this point.^'

This interpretation of the scope of the Ontario Negligence Act, and
similarly worded statutes in other jurisdictions, has been adopted in a
majority of decisions in Canada,^^ although authority the other way is not
totally lacking. ^3 An interesting intermediate position has recently been

held to be actionable, both as negligence and as a breach of a contractual duty of care.
However, the plaintiff's contractual claim was barred because the action was com-
menced more than 6 years after the defendant was retained; but because less than 6 years
had elapsed since the plaintiff sustained the damage, the action in tort was not time-
barred.

There is a trend in the case law to regard a breach of an implied contractual duty of
care as giving rise concurrently to liability in both tort and contract: see, for example,
John Maryon International Ltd. v. New Brunswick Telephone Co., Ltd. (1982), 43
N.B.R. (2d) 469, 141 D.L.R. (3d) 193 (C.A.), leave to appeal to the Supreme Court of
Canada refused (1982), 43 N.B.R. (2d) 468, 113 A.P.R. 468 (S.C.C), and Attorney
General of Nova Scotia v. Aza Avramovitch Associates Ltd. (1984), 63 N.S.R. 181, 11
D.L.R. (4th) 588 (S.C, App. Div).

^^ J. Nunes Diamonds Ltd. v. Dominion Electric Protection Co., [1972] S.C.R. 769.

^^ Particularly Allcock Laight & Westwood Ltd. v. Patten, Bernard and Dynamic Displays
Lf^.,[1967]10.R. 18(C.A.).

^^ Supra, note 52, at 1354. See, also, dicta in Waterloo County Board of Education v. Mark,
Musselman, Mclntyre, Coombe (1982), 35 O.R. (2d) 664 (Master S.C.O.), at 666-67,
aff'd (1982), 38 O.R. (2d) 61 (H.C.J.).

^2 See, for example, Sealand of the Pacific Ltd. v. Robert C McHaffie Ltd, [1974] 6
W.W.R. 724 (B.C.C.A.), and Ma Wai Kay v. McGay Ltd., [1979] 5 W.W.R. 279 (Man.
Q.B.).

^^ Groves-Raffin Construction Ltd v. Bank of Nova Scotia (1974), 51 D.L.R. (3d) 380,
[1975] 2 W.W.R. 97 (B.C.S.C), varied [1976] 2 W.W.R. 673 (B.C.C.A.). Pointing in the

advanced by Lambert J.A., in a dissenting judgment, when he said of the
British Columbia statute:^"^

[I]t may be that if the word 'fault' in the Negligence Act were treated as if it
referred either to a breach of an obligation imposed by implication of law or to
a breach of an obligation contractually substituted by the parties for an
obligation imposed by implication of law, as opposed, in both cases, to an
obligation wholly arising under a contract, that would go some way to setting
the Hmits on the application of the Negligence Act to breach of contract.

The question appears not to have been decided by an English court,
although the Court of Appeal of Northern Ireland has held that a statute that
was worded identically to the English Act of 1935 did not provide for
contribution between those who had caused loss to P as a result of a breach
of their separate contracts. ^^

The inapplicability of the Negligence Act to non-tortious wrongdoers,
however, does not necessarily exhaust the possibilities for apportioning a
single loss among those concurrently liable for it. First, if Dl and D2 are
joint contractors, a right to contribution or indemnity may be either
expressly provided by a term in their contract or, if the contract is silent,
implied by a court. This approach will, of course, be of assistance only if
there is a contractual relationship between Dl and D2. In many instances,
however, as in Giffels itself, Dl and D2 will have entered into separate
contracts with P. But even in a case where it is not possible to find an express

same direction are those cases in which statutory provisions that empower the court to
apportion damages between the defendant and a contributorily negligent plaintiff have
been interpreted to apply to actions by the plaintiff for breach of contract: West Coast
Finance Ltd. and Booth v. Gunderson, Stokes, Walton & Co. (1974), 44 D.L.R. (3d) 232,
[1974] 2 W.W.R. 428 (B.C.S.C.), varied [1975] 4 W.W.R. 501 (B.C.C.A.); City of Red Deer
V. Canadian Tennis Association Ltd. (1977), 5 A.R. 330 (S.C., T.D.); and Truman v.
Sparling Real Estate Ltd. (1977), 3 C.C.L.T. 205 (B.C.S.C.). See, also, the dissenting
judgment of Pigeon J. in Smith v. Mclnnis, [1978] 2 S.C.R. 1357, 91 D.L.R. (3d) 190,
where his Lordship held that breach of contract was the only proper cause of action
available to a client against her negligent solicitor, but that, as in civil law jurisdictions,
contributory negligence should be a partial defence.

Australian authorities, on the other hand, have denied that contributory negli-
gence is a partial defence to an action for breach of contract. See, for example, A.S.
James Pty. Ltd. v. CB. Duncan, [1970] V.R. 705 (S.C), and Harper v. Ashtons Circus Pty.
Ltd , [1972] 2 N.S.W.L.R. 395 (C.A.). For dicta to this effect, see Mitchell v. Jolly, [1960]
O.R. 470, 25 D.L.R. (2d) 18 (C.A.).

In a recent decision by the Supreme Court of Canada, Carl B. Potter Ltd. v. The
Mercantile Bank of Canada, [1980] 2 S.C.R. 343, 112 D.L.R. (3d) 88, the Court refused
to reduce a beneficiary's damages for the defendant's breach of trust, on the ground that,
while "fault" in the Nova Scotia Contributory Negligence Act , R.S.N.S. 1967, c. 54, s. 1,
might be wider than negligence, it does involve breach of a legal duty. The Court held
that there was no authority for the proposition that "a cestui que trust owes a duty to its
trustee to ensure that the terms of its trust are observed" (at 352).

Rempel and Rempel v. Parks (1984), 10 D.L.R. (4th) 52, at 66, [1984] 4 W.W.R. 689
(B.C.C.A.).

^^ McConnellv. Lynch-Robinson, [1957] N.L 70(C.A.).

or implied contractual right to contribution or indemnity, a court may
nonetheless resort to the equitable doctrine of contribution.^^

Alternatively, a court may apply the common law rule respecting
recoupments^ in favour of a person who is compelled by law to discharge an
obligation owed to a third party, which incidentally discharges a separate
obligation owed by another, and where, as between the two, the latter is
ultimately liable to pay. There is no logical reason why the rules developed
for co-debtors should not be equally applicable to those liable to pay a single
amount of damages as a result of a breach of their separate contracts.
Despite the absence of clear authority to this effect,^^ in Giffels Laskin
C.J.C. seemed to hint at such a possibility when he said:^^

I am prepared to assume, for the purposes of this case, that where there are two
contractors, each of which has a separate contract with a plaintiff who suffers
the same damage from concurrent breaches of those contracts, it would be
inequitable that one of the contractors bear the entire brunt of the plaintiff's
loss, even where the plaintiff chooses to sue that one and not both as in this case.

The potential of the common law for developing in this direction has
been explored by Professor Ernest Weinrib, who has vigorously maintained
that separate contract breakers who cause the same loss to the plaintiff
do have a non-statutory right to contribution or, where appropriate,
indemnity.^^ This position is derived from the restitutionary principles, set
out earlier, that underpin those rights of contribution that have already been
judicially developed without statutory aid. Professor Weinrib's point may be
bolstered by recalling that the principal justification for the refusal of the
common law to provide for a right to contribution among tortfeasors, the
maxim ex turpi causa non oritur actio, is generally inapplicable to those
whose only "wrong" is breach of a contractual promise. Moreover, he
argues, a court may find in the statutory right to contribution among

See supra, this ch., sec. 2.

Ibid.

See, however, Harries Hall & Kruse v. South Sarnia Properties Ltd. (1928), 63 O.R. 597,
[1929] 2 D.L.R. 821 (App. Div.), where damages were apportioned between concurrent
contract breakers.

Supra, note 52, at 1355.

^^ Weinrib, "Contribution in a Contractual Setting" (1976), 54 Can. B. Rev. 338, at 339-45.
For an opposing view, see Weir, supra, note 40, at 240, where the absence of a right to
contribution in common law jurisdictions is contrasted with the position in civil law
countries.

Further support for an extension of the right to contribution to concurrent
contract breakers is given in Morgan, "The Negligent Contract-Breaker" (1980), 58 Can.
B. Rev 299, at 310:

It is almost indisputable that contribution should be available in such situations.
Its absence would be a lonely exception to the general trend of increasing precision
in the fixing of responsibility for compensation or restitution when loss is suffered.

tortfeasors a statement of public policy in favour of apportionment, from
which, by analogy, to develop apportionment rules in contractual
contexts.^^

If the law appears to be settled that the Negligence Act does not confer a
right of contribution between those whose only legal wrong is a breach of
contract, then it would seem equally clear that the statutory right of
contribution does not extend to trustees and other fiduciaries whose non-
tortious breach of their equitable obligations exposes them to concurrent
liability. However, as we have seen, equity long ago developed contribution
rules to apportion the burden of hability for breach of trust among trustees,
although these non-statutory rules do not have the same flexibility as the
right to contribution created by the Negligence Act !^^

(ii) The Case for Expansion

From the foregoing description of the scope of the right to contribution
among tortfeasors and other wrongdoers, two general criticisms of existing
law emerge. First, the very reasons that made the rule in Merryweather v.
Nixan^^ unfair apply with equal force to situations where Dl and D2 are
concurrent contract breakers, or where one is a contract breaker and the
other a tortfeasor. The absence of a right to contribution allows the injured
person to choose the defendant who is to bear the entire loss for which two or
more defendants are legally responsible. If the person sued by the plaintiff
has no claim to contribution, the other will have obtained a benefit that it is
unjust to retain. It has been precisely to avoid this kind of injustice that, in
other contexts, equity, the common law, and statutes have provided rights of
contribution and indemnity. The particular legal categories into which the
primary liabilities of Dl and D2 to P fall ought to be of no relevance to the
secondary legal rights and duties arising between Dl and D2.

Secondly, there is ample judicial evidence that the line dividing tortious
from contractual liability is notoriously difficult to draw, and that the
principles upon which damages are awarded in tort and contract may be
moving closer together. ^^ There would seem to be little justification for
making the distinction determinative of the existence of a contribution
claim between those who are liable for causing the same loss to the injured
party.

^^ It may also be noted that the contribution provision in s. 13.18(2) of the draft Canada
Securities Market Act, supra, note 73, is broad enough to cover concurrent breaches of
contract that cause a single loss.

92
93
94

See supra, note 9, and accompanying text.

Supra, note 10.

See Irvine, "Contract and Tort: Troubles Along the Border" (1979), 10 C.C.L.T 281, and
Morgan, supra, note 90. That differences remain is illustrated by Cardinal Construction
Ltd. V. The Queen in right of Ontario (1981), 32 O.R. (2d) 575, 122 D.L.R. 703 (H.C.J.),
aff'd 38 O.R. (2d) 161, 128 D.L.R. (3d) 662 (C.A.), where the rule was affirmed that
punitive damages will not be awarded for a breach of contract that did not amount to an
independent tort.

(iii) Other Jurisdictions

Legislative activity in other jurisdictions both suggests the existence of a
widespread dissatisfaction with the existing law and provides a wealth of
experience from which the Commission has been able to inform its own
proposals. A common feature of these reforms has been to establish, or to
propose, a common statutory framework within which to work out contri-
bution claims among concurrent wrongdoers, irrespective of the nature of
the primary obligations owed to the injured party by the wrongdoers.

An early, and influential, model is provided by the Irish Civil Liability
Act, 1961 ,^^ the provisions of which were drawn in large part from the terms
of a draft bill suggested by Professor Glanville Williams.^^ In this statute,^^ a
"concurrent wrongdoer" who may make, or be subject to, a contribution
claim is defined as a person who has committed

a tort, breach of contract or breach of trust, whether the act is committed by the
person to whom the wrong is attributed or by one for whose acts he is
responsible, and whether or not the act is also a crime, and whether or not the
wrong is intentional.

The Act also specifically provides that wrongs are concurrent if they cause
the same damage to the injured person, whether they are contemporaneous
or successive.^^ Thus, an architect who negligently designs a building or
negligently supervises or inspects its construction may be a concurrent
wrongdoer with the builder who negligently constructs it, even though their
respective wrongs that caused the same damage may not have been commit-
ted contemporaneously.

In the United Kingdom, the scope of the application of the Civil
Liability (Contribution) Act 1978^^ is defined in section 1(1) as follows:

1.— (1) Subject to the following provisions of this section, any person liable in
respect of any damage suffered by another person may recover contribution
from any other person liable in respect of the same damage (whether jointly
liable with him or otherwise).

The interpretation section goes on to provide:

6.— (1) A person is liable in respect of any damage for the purposes of this Act
if the person who suffered it (or anyone representing his estate or dependants) is
entitled to recover compensation from him in respect of that damage (whatever
the legal basis of his liability, whether tort, breach of contract, breach of trust or
otherwise).

^^ Supra, note 42.

^^ Williams, Joint Torts and Contributory Negligence (1951), ch. 22.

^^ 5'w/7ra,note42,s. 2(1).

^^ Ibid.,s. ll(2)(c).

^^ Supra, note 61.

For our purposes, there are two limitations upon the scope of the right
to contribution created by the English statute that should be noted. First, by
limiting contribution claims to the defendant's liability in respect of any
damage suffered by the injured person, the Act excludes any claims that
may arise between concurrent debtors, whether jointly or severally liable in
the same sum to the plaintiff. '^^ Accordingly, any right to contribution
arising from the discharge of a debt continues to be governed by the non-
statutory law relating to contribution, indemnity, and subrogation. The
Report of the English Law Commission, on which the 1978 Act is largely
based, limited its recommendations for reform in this way, on the ground
that the law was generally satisfactory in those areas. '^' The Act, therefore,
does not apply to an indemnity insurer's right to be subrogated to the rights
of the assured, nor to a surety's right to be subrogated to the rights of the
creditor against the principal debtor, nor to a claim to contribution by co-
sureties, nor to maritime general average. It may be noted that the Report of
the Alberta Institute of Law Research and Reform did not directly address
this issue, although by limiting the scope of its recommendations to
"wrongdoers", •^^ it may be taken to have intended to follow the English
statute on this point.

The second limitation upon the statutory right to contribution con-
tained in the English Civil Liability (Contribution) Act 1978 is that the Act
does not affect either an express contractual provision made by the parties
that regulates or excludes contribution, or an express or implied contractual
or other right to indemnity. ^^^

The Uniform Contributory Fault Act,^^^ adopted by the Uniform Law
Conference of Canada, has endorsed the recommendation of the Alberta
Institute of Law Research and Reform •^^ that contribution among wrong-
doers should be extended beyond tortfeasors to include concurrent contract
breakers and those who have breached a statutory duty. The Act does not
apply, however, to a breach of trust: the Alberta Institute's Report stated that
this matter should be dealt with in connection with a reform of the Trustee
Act}^^

'^^ However, the Act extends the aboHtion of the judgment bar rule to joint liabiUty for debt
or damage {s. 3).

'^^ The Law Commission, Law of Contract: Report on Contribution, Law Com. No. 79
(1977) (hereinafter referred to as "Law Commission Report"), esp. para. 29, at 8-9.

'^^ Supra, note 65, at 36, Recommendation 8.

^^^ Supra, note 61, s. 7. See, further, infra, this ch., sec. 3(c).

'^■^ Supra, note 66, s. 1(c).

'^^ Supra, note 65, at 51, Recommendation 10. See ibid., at 40-51, where the issue is
discussed by the Institute.

'"° See ibid., at 52, where the Institute decided to defer consideration of this matter to a later
report on the law of trusts.

(iv) Conclusions

a. Concurrent Wrongdoers

There are, no doubt, a number of problems, some quite difficult, that
are likely to arise if the right of contribution is extended by statute to all
concurrent wrongdoers, irrespective of the kind of liability owed to the
injured person. It would be important to decide, for example, how rights of
contribution should be affected by contractual limitation periods, exemp-
tion and limited liability clauses, and the possibly differing availability of the
partial defence of contributory negligence to actions for breach of contract
and tort. Professor Weinrib regarded complexities of this kind as so formida-
ble that he urged that statutory provision should not be made for contribu-
tion among non-tortious wrongdoers: '^^

Where one can envisage many variations in the kinds of contractual relation-
ships and in their terms, the difficulties would best be solved by the kind of case-
by-case elaboration which is the common law's vaunted strength.

Despite this warning, the Commission has concluded that statutory
reform is both desirable and necessary. Even if there already exists a right to
contribution among concurrent wrongdoers who are not tortfeasors, the
state of doctrinal development is, at best, uncertain. The virtual absence of
any cases in which a court has applied general restitutionary principles to
give reUef is likely to mean that the law in this rather difficult and technical
area will evolve slowly and piecemeal. Moreover, it is highly probable that
anomalies will emerge respecting the statutory rights available to concurrent
tortfeasors, those rights previously recommended by the Commission for
contribution among trustees, '^^ and the common law and equitable rights of
other wrongdoers. The alarmingly large number of recent cases in which our
courts have experienced difficulties in their application of restitutionary
principles'^^ provides cogent evidence against the view that legislatures
should abstain in this area. Moreover, there appears to be very little
evidence upon which to base an assumption that the courts will use the
principles embodied in the Negligence Act as a springboard for extension
into areas with which it does not expressly deal.

Accordingly, the Commission, like law reform bodies in England,
South Australia, Victoria, New Zealand, and Hong Kong, has decided to
recommend that there should be a right to contribution not only among all
concurrent tortfeasors, as previously recommended, but among all concur-
rent wrongdoers, whatever the legal nature of their liability to the injured
person. '1^ As in the case of tortious conduct, we further recommend that the

•^^ Weinrib, supra, note 90, at 342.

'^^ Ontario Law Reform Commission, Report on the Law of Trusts, supra, note 9, Vol. II,
ch.6.

^^^ See Weinrib, supra, note 90, at 343.

•'^ Draft Act, s. 3(1).

criminal nature of the wrongdoing, the fact that it was committed intention-
ally or that the damages paid by a defendant include a penal or punitive
element, should not automatically bar a right of contribution. ••^ We wish to
emphasize our view that the uncertainties in the present law, the practical
importance of clarity in this area, the difficulties experienced by the courts
in assembling a coherent set of legal rules on a case-by-case basis from the
somewhat abstract restitutionary principle of unjust enrichment, and the
likelihood that discrepancies will emerge between the statutory rights of
tortfeasors and the non-statutory rights of other wrongdoers, make a legisla-
tive solution attractive in Ontario, as, indeed, they have in other jurisdic-
tions. It is by no means obvious that the varieties of contract will provide
more insuperable barriers to appropriate statutory reforms than the vari-
eties of torts.

b. Concurrent Debtors

Having decided to recommend enlarging the scope of contribution
beyond tortfeasors, the next question is whether it should include only those
whose civil liability depends upon a concurrent wrong, as opposed to a debt.
The Irish and English legislation has, as we have seen, been limited in this
way. The Uniform Contributory Fault Act, adopted by the Uniform Law
Conference of Canada, like the proposals of the Alberta Institute of Law
Research and Reform, is similarly confined.

We also have concluded, and accordingly recommend, that the pro-
posed statutory right to contribution should not extend to those liable for a
debt.'^^ While it is difficult to justify in principle an assertion that there is
some fundamental distinction between apportioning, as between them-
selves, the liability of wrongdoers and debtors, two practical considerations
support this limitation. First, there appears to be no significant dissatisfac-
tion with the present law respecting the existing rights to contribution
among those who owe debts to another. Although cases on guarantees
appear quite regularly in the law reports, the contentious issues do not seem
to relate to questions of contribution or indemnification. Secondly, the
omission of contribution among concurrent debtors avoids overburdening
proposals for law reform in an area that already contains a fair share of
complexity.

In most cases, there will be no difficulty in distinguishing a claim for
damages ^^^ that arises as a result of a civil wrong, which is capable of giving
rise to a statutory right of contribution, from a claim for a debt, for which the

112

113

Ibid.,s.l{\).

See ibid., s. 3, which effectively precludes a statutory right to contribution from arising
where the liability is for a debt.

We recommend that liability to restore a chattel to the injured party should, for this
purpose, be regarded as equivalent to liability to pay damages. Thus, a person who
returns to the rightful owner a chattel, which that person has purchased from someone

parties must resort to the common law or equity for an apportionment of
liability among the concurrent debtors. A debt is a right to be paid a sum
certain in particular circumstances, whereas the victim of a civil wrong will
generally sue for an unliquidated amount of damages as compensation for
the wrong suffered. Parties to a contract are free to predetermine the
amount payable in the event of breach, subject to the equitable doctrine of
penalties. '^^ A person whose liability has been effectively regulated by a
liquidated damages clause would be potentially able to assert, or to be liable
to, the Commission's proposed statutory right of contribution, because the
liability remains one for damages arising from a breach of contract.

The critical issue to be considered in this section is the effect that the
Commission's proposed new statutory right of contribution should have
upon any other right to contribution or indemnity '^^ that the parties may
already have at common law, by statute, by virtue of either an express or
impUed contractual arrangement made between them, or as a result of any
other legal obligation. ^^^

Section 2 of the Negligence Act provides, in part, that concurrent
tortfeasors are liable to pay contribution or indemnity in proportion to their
respective degrees of fault or negligence "in the absence of any contract

who had no authority to sell it, should be able to claim contribution from others whom
the owner could have sued in conversion.

We further recommend that other decrees of specific relief that discharge or
reduce the liability of a concurrent wrongdoer should be capable of founding a claim for
contribution. See Draft Act, s. 9(7).

^^^ In the Commission's Report on Amendment of the Law of Contract (1987), at 147, the
Commission recommended that agreements to pay a stipulated sum on a breach of
contract should be governed by statutorily enacted principles of unconscionability,
rather than the doctrine of penalties.

^^^ It bears re-emphasizing the distinction made in this Report between "contribution" and
"indemnity". The term "contribution" has been used by the Commission to refer to a
case where one concurrent wrongdoer (Dl), who has paid all, or more than his
proportionate share, of the injured person's damages, seeks payment from another
concurrent wrongdoer (D2) of the amount that exceeds Dl's proportionate share. The
determination of contribution claims is based, at present, on comparative fault or
negligence as between the concurrent wrongdoers.

The term "indemnity", on the other hand, has been used in this Report to refer to
the case where two persons are liable for the same debt or damages, but the liability of
one is primary and the liability of the other is secondary The determination of
indemnity claims is based not on comparative fault or negligence, but on the nature of
the relationship between the parties.

For a more detailed discussion of this distinction, see supra, ch. 1.

^^^ Concerning the applicability of the proposed new Act in the context of apportionment
rights as between a plaintiff and a defendant, see infra, ch. 10, sec. 9.

express or implied". A contrary or different contractual arrangement
respecting contribution or indemnity therefore supersedes the statutory
scheme.

Even where a contract does not expressly provide for a right of contri-
bution or indemnity, such a right may be implied from the nature of the
relationship. Thus, in Lister v. Romford Ice and Cold Storage Co. Ltd.,^^'^ the
plaintiff-employer relied not only upon statutory rights, but also upon an
implied term of the contract to be indemnified by an employee whose
negligence had rendered the plaintiff vicariously liable to a third party. In
McFee v. Joss,^^^ a prQ-Negligence Act decision, the Ontario Court of
Appeal held that a contract for the hire of a car should be construed to
include an implied contractual right in the owner to be indemnified by the
hirer for any liability incurred by the owner as a result of the hirer's
negligence.

The right to indemnity may arise not only from an express or implied
contractual provision, but also at common law, where the parties are not in
a contractual relationship. For instance, if Dl and D2 are subject to a
common demand from P, and a payment to P by Dl thereby discharges the
liability of Dl and D2, Dl is entitled to be indemnified by D2 if, as between
them, D2 was primarily responsible for the payment. '^^ Older cases
described Dl's action for money paid to the use of D2 as based on an imphed
contract, or quasi-contract, even where there was no contractual relation-
ship between Dl and D2. Today, one would expect a court to characterize
D2's liability to indemnify Dl as being a restitutionary obligation imposed
by operation of law, rather than one stemming from a fictional, implied
contract. In other situations, a wrongdoer may be legally required to
indemnify another who was concurrently liable to a third party where the
legal duty has never been regarded as resting on notions of contract at all.
One example is the right of a trustee to be indemnified in some cir-
cumstances by a co-trustee whom the beneficiary could have sued for
breach of trust.

Finally, there exists in Ontario a number of statutory provisions dealing
with rights of contribution or indemnity, or, in several instances, both. In
some cases, such as the Dog Owners' Liability Act ,^^^ for example, the very
brief legislation simply permits "contribution and indemnity" in more or
less general terms. In other cases, however, particularly the Environmental
Protection Act,^^^ the legislation is relatively comprehensive.

^^^ Supra, note 37.

^^^ (1925), 56 O.L.R. 578, [1925] 2 D.L.R. 1059 (App. Div.).

119

See Moule v. Garrett, supra, note 18.
'^^ Supra, note 56, s. 2(4).
^21 R.S.0. 1980, c. 141, s. 87.

In connection with statutory enactments providing for a right of
contribution or indemnity, mention should also be made of the proposals in
the Commission's Report on the Law of Trusts .^^^ In that Report, we offered
recommendations concerning several aspects of the law in this area. We also
considered, and rejected, the United Kingdom approach, which would have
the effect of placing the Commission's proposed trustee contribution provi-
sions in a single Act dealing with contribution among all classes of wrong-
doers, including trustees. Rather, we endorsed the approach of the Alberta
Institute of Law Research and Reform and recommended that the proposed
new provisions dealing with contribution and indemnity among trustees
should be incorporated in the Commission's revised Trustee Act J^^ How-
ever, it does bear emphasizing that the proposed trustee provisions do not, in
fact, form a comprehensive statutory code governing contribution and
indemnity between co-trustees. They were intended to effect changes only
in certain areas; for example, the legislation would provide for a new test for
allocation of liability as between trustees in breach of trust and would
abolish a trustee's common law right to indemnity from another trustee.

In its 1977 Report on contribution, the English Law Commission
recommended a number of statutory changes to existing law, but proposed
that "rights of contribution and indemnity founded in contract or quasi-
contract should, for the most part, continue to be regulated by the common
law". ^2"^ The subsequent United Kingdom Civil Liability (Contribution) Act
1978,^^^ which is based largely on the work of the English Law Commission,
contains a section that deals specifically with the application of that Act,
and, more particularly, with the effect of the Act on existing contractual and
other rights of contribution and indemnity. Section 7(3) provides as follows:

7.— (3) The right to recover contribution in accordance with section 1 above
supersedes any right, other than an express contractual right, to recover
contribution (as distinct from indemnity) otherwise than under this Act in
corresponding circumstances; but nothing in this Act shall affect—

(a) any express or implied contractual or other right to indemnity; or

(b) any express contractual provision regulating or excluding contribu-
tion;

which would be enforceable apart from this Act (or render enforceable any
agreement for indemnity or contribution which would not be enforceable apart
this Act).

'22 Supra, note 9, Vol. II, ch. 6.

'2^ For a discussion of this question, see ibid., at 382-83.

'24 Supra, note 101, para. 80(a), at 23. See, also, ibid., paras. 26-29, at 7-9, and The Law
Commission, Contribution, Working Paper No. 59 (1975), paras. 15-23, at 9-14, and
para. 45(b), at 26.

125

Supra, note 61.

This Commission has come to the conclusion and, accordingly, recom-
mends that, subject to the exceptions discussed below, the contribution
provisions of the proposed new Contribution and Comparative Fault Act
should govern in all cases and, therefore, should supersede any other right to
contribution (as distinct from indemnity), whether that right arises by
statute or by any other means (including common law and equity). ^^^

The Commission believes that, as a general principle, the proposed new
Act represents an equitable and workable statutory scheme of contribution
that ought to be made applicable to all cases of concurrent wrongdoing.
However, as indicated above, we do appreciate that certain exceptions
should be made to the otherwise universal scope of our Act.

We turn first to consider the applicability of other statutes that may deal
with rights of contribution. In this connection, the Commission recom-
mends that the proposed Contribution and Comparative Fault Act ought to
supersede all other statutory rights of contribution, as proposed above,
unless it is specifically provided in the other statute that the contribution
provisions of that statute apply notwithstanding the provisions in the
Contribution and Comparative Fault ActJ^'^ This exception to our general
proposal means that, should our proposed legislation be enacted, those
governmental officials responsible for the administration of other relevant
Acts should review those Acts in light of the new Contribution and Compar-
ative Fault Act in order to determine whether the provisions in such Acts
ought to be made to apply notwithstanding the Contribution and Compara-
tive Fault Act, and we so recommend. We further recommend that the
proposed review of existing legislation should include a consideration of the
precise meaning of any provisions concerning the right to "indemnity",
having regard to the distinction made in this Report between "contribu-
tion" and "indemnity" and the not infrequent use of the latter term in two
different ways in the legislation of Ontario.

The second exception to the proposed general rule relating to the
applicability of our new Act concerns contribution and indemnity between
co-trustees and other fiduciaries. With respect to trustees, we wish to re-
emphasize our view that, in certain particulars at least, this area of the law
manifests unique characteristics that should be dealt with in a separate and
distinct manner. As indicated earlier, it is for this reason that, in our Report
on the Law of Trusts, the Commission recommended the incorporation of
the proposed new contribution and indemnity provisions in respect of
trustees into the Commission's proposed Trustee Act, rather than into a
more general statute governing contribution among wrongdoers. The Com-
mission sees no reason to depart from its earlier views on this matter.
Accordingly, we recommend that the contribution provisions of the new
Contribution and Comparative Fault Act should apply in the case of trustees
and other fiduciaries, except as otherwise specifically provided by the

^2^ Draft Act, s. 23(1).
•27 Ibid.

proposed Trustee Act J^^ Unlike the case of statutory enactments other than
the proposed Trustee /lc7— where we have recommended that the new
legislation should govern unless the other statutes expressly state, by means
of a non obstante clause, that it does not— we believe that the special,
although limited, contribution provisions of the proposed Trustee Act ought
to supersede the new Contribution and Comparative Fault Act without the
requirement of inserting in the proposed Trustee Act an express non
obstante clause.

The third exception pertains to the relationship between the proposed
contribution legislation and the Workers' Compensation Act}^^ In chapter 6
of this Report, the Commission will consider the comprehensive compensa-
tion scheme set forth in that Act. Our conclusion is that nothing in the
Commission's Contribution and Comparative Fault Act should affect the
scheme established under the Workers' Compensation Act}^^

The fourth exception to the general rule relates to contractual provi-
sions dealing with the right to contribution. As we have seen, section 2 of the
Negligence Act provides for liability to pay contribution on the basis of
comparative fault or negligence "in the absence of any contract express or
implied". The Commission is of the view that concurrent wrongdoers
should continue to have the right to establish their own regime governing
rights of contribution as between themselves. Accordingly, we recommend
that the provisions of the proposed new Contribution and Comparative
Fault Act governing contribution should be subject to any express or
implied contractual agreement relating to contribution made by the concur-
rent wrongdoers. '^'

We turn now to existing rights to indemnity— as narrowly defined in
this Report— arising between two persons, one of whom is primarily liable
for the debt or damages, the other of whom is secondarily liable. In
connection with a right to indemnity arising from contract, whether express
or implied, the Commission takes the same position as it did with respect to
express or implied contractual provisions concerning contribution; that is,
we believe that concurrent wrongdoers ought to be able to regulate their own
affairs by an agreement made between themselves. Moreover, like the 1978
United Kingdom Act, we would not have our proposed Contribution and
Comparative Fault Act affect any non-contractual right to indemnity,
whether that right arises by statute or at common law Accordingly, we
recommend that the proposed legislation should not affect any express or
implied contractual or other right to indemnity. '^^ However, we should

'28 //7/"^.,s. 3(l)(d).

'2^ R.S.O. 1980, c. 539.

'^^ See infra, ch. 6, sec. 3(d)(ii)b. See Draft Act, s. 23(2).

'^' Ibid., s. 7(3).

'^2 Ibid.

stress again that, bearing in mind the distinction made in this Report
between contribution and indemnity, we do not intend by the preceding
recommendation to curtail the power of a court determining a contribution
claim to conclude that, in an appropriate case, the claimant is entitled to
contribution of 100 percent or to no contribution at all.

Finally, we wish to deal with the situation where Dl seeks contribution
from D2, who, in turn, is entitled to be indemnified by Dl for the damages in
respect of which contribution is sought.

As we have seen, section 7(3)(a) of the English Civil Liability (Contribu-
tion) Act 1978, as well as the analogous provision in the Commission's
proposed legislation, ^^^ provides that nothing in the Act shall "affect" any
express or implied contractual or other right to indemnity. It may be argued
that, as a result of such a provision, a wrongdoer who is obliged, quite apart
from this Act, to indemnify another, cannot seek contribution under the
Act, since to do so would "affect" the existing right to an indemnity.
Nevertheless, we do not consider the matter to be free from doubt. The
wording of section 3(3) of the draft contribution Bill appended to the
English Law Commission Report— a section that reproduced a provision in
section 6(l)(c) of the 1935 United Kingdom Act— was clearer, since it
provided expressly that "[n]o person shall be entitled to recover contribu-
tion under this section from any person entitled to be indemnified by him in
respect of the liability in respect of which the contribution is sought", a
provision that the Alberta Institute has supported. •^'^ The Canadian Uni-
form Contributory Fault Act also contains a section to this effect. '^^

The Commission endorses the type of legislation just described.
Accordingly, we recommend that the Commission's proposed legislation
should provide specifically that no person should be entitled to claim
contribution from a person who is entitled to be indemnified by the
claimant for the damages in respect of which contribution is sought. ^^^

We believe that the proposals recommended above concerning the
application of the Commission's proposed new Contribution and Compara-
tive Fault Act strike a practical and appropriate balance between, on the one
hand, producing a uniform statutory scheme of contribution applicable to
all concurrent wrongdoers, and, on the other hand, protecting both the
express or implied contractual arrangements made by wrongdoers for the
regulation of contribution rights as between themselves and any rights to
indemnity that arise by law in particular situations.

'33 Ibid.

'3^* Law Commission Report, supra, note 101, at 34, and Alberta Report, supra, note 65, at
81, Recommendation 20. See ibid., at 79-81, for a discussion of this issue.

'3^ Supra, note 66, s. 10.

'36 Draft Act, s. 7(3).

(d) Remedies Available to the Claimant for Contribution

Normally, a person entitled to contribution from a concurrent wrong-
doer will be entitled to judgment in which the person who is liable to
contribute is ordered to pay to the claimant a sum that represents the
contributor's fair portion of the total liability to the injured party. The
principles upon which the apportionment between them is made are
considered in a later chapter of this Report. '^^

However, this may not exhaust the possibilities, especially if the right to
contribution is extended beyond concurrent tortfeasors. Suppose, for exam-
ple, that Dl has been held liable to P, and that D2, who has broken a contract
with P that has also contributed to P's loss, is insolvent. D2, however, had
been required by P to deposit a security for due performance of D2's
contract. Would it not be just that Dl should have the benefit of that security
up to the amount of the sum that it was found appropriate for D2 to
contribute? This would not work hardship on D2's unsecured creditors,
whether D2 had become indebted to them before or after D2 contracted
with P. Dl is simply avaiUng herself, in part, of the security to which P
would have been entitled if P had chosen to press her claim against D2,
rather than Dl.

Nor, it should be noted, is it any objection that the effect of Dl's
payment is to discharge D2's liability Sureties are in exactly the same
position when they discharge the principal debt, and are entitled to be
subrogated to any security deposited by the debtor with the creditor.
Moreover, the surety who pays the debt is also entitled to the benefit of any
security given by a co-surety to the creditor, and thus herself becomes
secured up to the limit of the sum to which she is entitled by way of
contribution. Of course, if P still has a claim against D2, P's interest in the
security should rank ahead of DTs.

Finally, it also seems appropriate that the claimant for contribution
should enjoy any personal priority that the injured person would have had
over the general unsecured creditors of D2. This will tend to limit the
adverse consequences for Dl of P's decision to sue Dl alone. D2's creditors
will be in exactly the same position they would have occupied if D2 had been
required to pay to P an amount equal to D2's due share of responsibility for
P's loss. Because P's claim against D2 is extinguished by Dl's payment, the
analogy of the insurer's right to be subrogated to the personal rights of the
assured against third parties is inappropriate. However, if in principle it
seems fair to give Dl this advantage, there is a technical explanation for the
result, namely, that on Dl's payment, P's rights against D2 are fictionally
assigned to Dl.

'-''^ See/Vra,ch. 8.

The Commission has come to the conclusion and, therefore, recom-
mends that a person who has a right to contribution under the proposed
Contribution and Comparative Fault Act should be subrogated to any right
that the injured person has against the concurrent wrongdoer from whom
contribution is claimed. '^^

(e) Binding the Crown

The Commission recommends that the proposed new statutory provi-
sions for contribution among concurrent wrongdoers should expressly
apply to the Crown in the right of Ontario and, insofar as it is constitution-
ally permissible, to the Crown in the right of Canada. '^^

Recommendations

The Commission makes the following recommendations:

1. (1) Subject to the following recommendations, a right to contribution

should be capable of arising among wrongdoers who cause a single
loss to an injured person, irrespective of the nature of the legal
obligation that gives rise to their liability in damages, and of the
form of the relief that the wrongdoer has been required to provide
to the injured party.

(2) The criminal nature of the wrongdoing, the fact that it was com-
mitted intentionally or that the damages paid by a defendant
include a penal or punitive element, should not automatically bar
a right of contribution. (See, also, chapter 8, Recommendation
7(4).)

(3) For the purpose of this recommendation, liability to restore a
chattel to the injured party should be regarded as equivalent to
hability to pay damages. In addition, other decrees of specific relief
that discharge or reduce the liability of a concurrent wrongdoer
should be capable of founding a claim for contribution.

2. The proposed statutory right should not extend to those liable for a
debt.

3. (1) Subject to the exceptions recommended below, the contribution

provisions of the proposed new Contribution and Comparative
Fault Act should govern in all cases and, therefore, should super-
sede any other right to contribution (as distinct from indemnity),
whether that right arises by statute or by any other means (includ-
ing common law and equity).

^^^ Draft Act, s. 7(2).
^39 Ibid., s. 20.

(2) (a) The proposed Contribution and Comparative Fault Act ought

to supersede all other statutory rights of contribution, as
recommended in paragraph (1), unless it is specifically pro-
vided in the other statute that the contribution provisions of
that statute apply notwithstanding the provisions in the Con-
tribution and Comparative Fault Act.

(b) Should the proposed legislation be enacted, those governmen-
tal officials responsible for the administration of other rele-
vant Acts should review those Acts in light of the new
Contribution and Comparative Fault Act in order to deter-
mine whether the provisions in such Acts ought to be made to
apply notwithstanding the Contribution and Comparative
Fault Act.

(c) The proposed review of existing legislation should include a
consideration of the precise meaning of any provisions con-
cerning the right to "indemnity", having regard to the distinc-
tion, made in chapter 1 of this Report, between "contribution"
and "indemnity" and the not infrequent use of the latter term
in two different ways in the legislation of Ontario.

(3) The contribution provisions of the new Contribution and Compar-
ative Fault Act should apply in the case of trustees and other
fiduciaries, except as otherwise specifically provided by the revised
Trustee Act proposed by the Commission in its Report on the Law
of Trusts (1984).

(4) The provisions of the proposed new Contribution and Compara-
tive Fault Act governing contribution should be subject to any
express or implied contractual agreement relating to contribution
made by the concurrent wrongdoers.

4. The proposed legislation should not affect any express or implied
contractual or other right to indemnity, as defined in chapter 1 of the
Report.

5. No person should be able to claim contribution from a person who is
entitled to be indemnified by the claimant for the damages in respect of
which contribution is sought.

6. A person who has a right to contribution under the proposed Contribu-
tion and Comparative Fault Act should be subrogated to any right that
the injured person has against the concurrent wrongdoer from whom
contribution is claimed.

7. The proposed new statutory provisions for contribution among wrong-
doers should expressly apply to the Crown in right of Ontario and,
insofar as it is constitutionally permissible, to the Crown in right of
Canada.

CHAPTER 5

SETTLEMENTS AND
CONTRIBUTION CLAIMS

1. INTRODUCTION

This chapter examines a number of difficult issues concerning rights of
contribution and settlements. The first question is whether a right of
contribution should be granted in favour of a person who has settled with
the injured person. If an affirmative answer is given to this question, then it
is necessary to consider whether it should be a defence for the person from
whom contribution is claimed (D2) to establish that the claimant (Dl) was
not in fact liable to the injured person (P), but mistakenly settled or
compromised P's claim. It should be noted that D2 may resist the contribu-
tion claim on the ground that he had a total or partial defence to any claim.
The more general question of the relevance to the success of a contribution
claim of the fact that D2 was never, or has ceased to be, liable to P is
considered in chapters 6 and 7.

Finally, this chapter considers contribution issues arising out of a
partial settlement between P and Dl.

2. THE PRESENT LAW

Until recently, Ontario was one of the few jurisdictions that had
specifically provided by statute for claims for contribution or indemnity to
be made following a settlement by one tortfeasor with the injured person.
Elsewhere, courts have had to imply a right in favour of a person who had
compensated the plaintiff without being sued to judgment. • The relevant
provision of the Ontario Negligence Act, '^ section 3, states:

See, for example, Stott v. West Yorkshire Road Car Co. Ltd., [1971] 2 Q.B. 651 (C.A.),
where the Court allowed an appeal on the ground that the wording in the Law Reform
(Married Women and Tortfeasors) Act, 1935, c. 30 (U.K.), s. 6(l)(a), which conferred a
right to contribution upon "any tortfeasor liable in respect of that damage. . ." should
not be restricted to those held liable in litigation, but could include a tortfeasor who had
settled the injured person's claim.

Negligence Act, R.S.O. 1980, c. 315.

[ 85]

other tort feasor, in which event the tort feasor settling the damage shall satisfy
the court that the amount of the settlement was reasonable, and in the event
that the court finds the amount of the settlement was excessive it may fix the
amount at which the claim should have been settled.

The case law produced by this section is comparatively small. ^ This fact
is presumably an indication that the section works reasonably smoothly,
although the absence of litigation does not necessarily speak to the effective-
ness of the section in encouraging fair settlements of claims made by those
who have been injured by the tortious conduct of others. The language of
section 3 makes it plain that it does not extend to those whose conduct is not
tortious, but amounts only to a breach of contract or of a fiduciary duty:
subject to an exception discussed below, contribution may be claimed only
by and from tortfeasors whose conduct has concurrently caused a loss to the
injured person. Whether section 3 extends to all tortfeasors, whatever the
nature of the particular tort, depends on the considerations that were
canvassed in chapter 4.

A distinctive feature of section 3 is that it enables a tortfeasor who has
made a settlement with the injured person to institute an independent
action for contribution; tortfeasors who have been successfully sued by the
injured person normally may not institute an independent claim for contri-
bution, but are required to vindicate their right to contribution by serving a
third party notice upon any person from whom contribution is sought to be
recovered."^ The section provides that a tortfeasor who has settled may
commence an action for contribution against other tortfeasors. The section
also provides that a settling tortfeasor may continue such an action, which
suggests that an action for contribution may be instituted before the settle-
ment has been made.^

The fact that different procedural consequences depend upon whether
the claimant settled with, or was sued by, the injured person may require a
sharp distinction to be made between a settlement and a judgment. It has
been held that the procedure provided by section 3 can be used by a person
who has been successfully sued in a foreign jurisdiction whose law did not
permit contribution to be claimed against a concurrent tortfeasor.^ It might
be expected that a similar result would be reached where, as a result of the
constitutionally limited jurisdiction of the Federal Court of Canada, it is not

It is comprehensively reviewed in Cheifetz, Apportionment of Fault in Tort (1981), ch. 2.

Cohen v. S. McCord& Co. Ltd. , [1944] O.R. 568, [1944] 4 D.L.R. 753 (C.A.). For further
discussion of this rule and other procedural aspects of contribution claims, see chapter 9
of this Report.

See Glass v. Avenue Dodge Chrysler (1979), 26 O.R. (2d) 592, 10 C.C.L.T. 69 (Co. Ct.),
where it was held that proceedings could be instituted under s. 3 at a time when the
claimant for contribution was still a defendant in an action commenced by the injured
party, but which was settled soon thereafter.

Kraft V. The Queen in right of the Province of Ontario, [1972] 3 O.R. 684, 29 D.L.R. (3d)
275 (H.C.J.).

possible for a defendant who has been sued in that Court to serve a third
party notice upon a concurrent tortfeasor.^ The term "settlement" may also
include settlements the terms of which are incorporated into a judgment,^
and the acceptance of money paid into a court by one of the parties to the
litigation.^

It is clear that a settlement that extinguishes the liability of concurrent
wrongdoers enables the settling tortfeasor to claim contribution under
section 3.^^ Despite the apparent absence of authority on the point, the
wording of section 3 does not suggest that it is not equally applicable to
partial settlements, so that a tortfeasor who has settled, without barring the
injured person's claim against other concurrent tortfeasors, is also entitled
to contribution, at least in respect of any sum paid over and above his fair
share of the total liability. ••

A significant extension of the categories of persons eligible to claim
contribution beyond those who are strictly speaking "tort feasors" has been
made in the context of section 3. In Marschler v. G. Masser's Garage, ^^ the
owner of a truck (Dl) settled the claim of a person with whom he had
collided (P); Dl subsequently instituted proceedings for contribution against
D2, who had negligently failed to repair the brakes of Dl's truck. It was held
that D2 was solely liable for P's injury. Nonetheless, Lebel J. held that Dl was
entitled to an indemnity from D2 by virtue of section 3, even though Dl was
not a tortfeasor whom P could have successfully sued for his injury. The
learned judge was prepared to give a generous interpretation to the term
"tort feasor", so as to include "a person who impliedly assumes or admits
liability when he enters into a settlement".'^

The virtue of this interpretation is that it encourages those against
whom claims are made to settle; the possibility that, whether or not they
could be successfully sued by the injured person, they may be able to shift
some or all of the amount paid under the settlement to a party who was
liable for the damage provides an obvious incentive to avoiding the hazards,

^ See The Queen v. Thomas Fuller Construction Co. (1958) Ltd., [1980] 1 S.C.R. 695,
(1979), 106 D.L.R. (3d) 193. But see the discussion supra, ch. 2, note 97.

^ Morello v. Henderson, [1959] O.W.N. 121 (H.C.J.).

^ Reaney v. National Trust Co., [1964] 1 O.R. 461, 42 D.L.R. (2d) 703 (H.C.J.). This will
presumably also hold true under the provisions for offers of settlement under R. 49 of
the current Rules of Civil Procedure, O. Reg. 560/84.

'^ Nesbitt V. Beattie, [1955] O.R. Ill, [1955] 2 D.L.R. 91 (C.A.).

"in Dixon and Dixon v. The Queen in right of British Columbia and British Columbia
Hydro and Power Authority i\919), 99 D.L.R. (3d) 652, [1979] 4 W.W.R. 289 (B.C.S.C),
aff'd (1980), 128 D.L.R. (3d) 389 (B.C.C.A.), Dl settled with P on the eve of the trial in
which Dl and D2 were co-defendants. Although third party proceedings by D2 against
Dl were adjourned, the Court gave no indication that they could not be sustained
because Dl had made a partial settlement with P

'2 [1956] O.R. 328, 2 D.L.R. (2d) 484 (H.C.J.) (subsequent reference is to 2 D.L.R. (2d)).
'^ Ibid., at 490.

delays, and costs of litigation. Nonetheless, in some other jurisdictions
courts have taken a narrower view of the circumstances in which a claim for
contribution can be made. For instance, in Baylis v. Waugh,^^ Dl made a
payment into court, while at the same time denying his liability to P.
P accepted the payment in, and Dl claimed contribution from D2. The New
Zealand Court held that it was open to D2 to defend this claim by showing,
not only that he had a defence to P's claim, but also that Dl had. In the
English Court of Appeal, Lord Denning M.R. has also stated, in Stott v. West
Yorkshire Road Car Co. Ltd.,^^ that in order to claim contribution Dl must
have been sued to judgment by P, or admitted liability to P. If he made a
settlement with P without admitting liability, contribution could only be
claimed if, in the course of the proceeding in which contribution was
claimed, Dl were to establish or admit his liability to P.^^ This view has
recently been reaffirmed in the English Court of Appeal, where Donaldson
L.J. stated that a person who settles in the mistaken belief that he is liable for
the damage cannot claim contribution, because the Law Reform (Married
Women and Tortfeasors) Act, 1935 •^ confined the right to tortfeasors. ^^

It may be possible to reconcile the decision in Marschler with the
statements in these English cases: the wording of the English and the Ontario
statutes differed,'^ and in any event Lebel J. found that Dl had, in the
circumstances in which the settlement was made, admitted or implicitly
assumed liability for P's injury. In a recent decision, however, an Alberta
Court has expressed a clear preference for Marschler over Lord Denning's
dicta in Stott. In this case, Hannigan v. City of Edmonton .^^ the plaintiff

'"* [1962]N.Z.L.R.44(S.C.).
^^ Supra, note 1.

^^ Ibid., at 657. Salmon L.J. agreed with Denning M.R. He held that Dl's statement that it
had settled "without admitting liability" did not preclude it from claiming contribution,
since the mere fact of settlement indicated a belief in liability. However, Salmon L.J. said
that if Dl had paid P without any liability to do so, "there could, in no event, be any
liability upon [D2]" {ibid., at 659).

Megaw L.J. expressed a similar view when he stated: "No doubt if the alleged joint
tortfeasor [D2] does not admit the existence of liability on the part of the defendant [Dl]
towards the plaintiff [P] on grounds either of fact or law, the defendant must establish
the existence of such liability towards the plaintiff as a condition of establishing his
claim to contribution from the alleged joint tortfeasor [D2]" {ibid., at 660).

^^ Supra, note 1.

Acrecrest Ltd v. W.S. Hattrell & Partners, [1983] Q.B. 260, at 280, [1983] 1 All E.R. 17
(C.A.), overruled on other grounds by Governors of the Peabody Donation Fund v. Sir
Lindsay Parkinson & Co. Ltd., [1985] 1 A.C. 210, [1984] 3 W.L.R. 953 (H.L.).

In particular, s. 3 of the Negligence Act, supra, note 2, refers to the claimant for
contribution simply as a "tort feasor", whereas the English statute spoke of the claimant
as a "tortfeasor liable in respect of that damage". It should also be noted that prior to
Stott, supra, note 1, it was unclear whether a person who had not been sued to judgment
could ever be aptly described as a tortfeasor who was liable for the injured person's loss,
even if he had admitted liability in an out-of-court settlement.

(1983), 1 D.L.R. (4th) 397, [1983] 6 W.W.R. 644 (Alta. Q.B.).

sued the city for damages sustained by his vehicle when he drove it into the
vehicle of a third party in order to avoid a bus owned by the city. The
plaintiff included in his claim for damages the amount that he had paid to
the third party in settlement of the latter's claim for the damage caused to his
vehicle by the plaintiff. The city admitted that it was solely liable for the
damage caused to the plaintiff and the third party; it resisted the plaintiff's
claim to be indemnified against the third party on the ground that the
plaintiff was not "a tortfeasor" in respect of the third party. The Court held
that this was not a defence to the plaintiff's claim for indemnity: any other
view would unduly discourage settlements. The decision in Marschler was
followed and, relying upon the judgment of Salmon L.J. in Stott,^^ the
learned judge held that a person who settled a claim made by an injured
person would be denied contribution only if he thought that there was no
chance of his being held liable for the injured person's loss.

As indicated, section 3 of the Negligence Act does not distinguish
between a settlement that has the effect of protecting other concurrent
wrongdoers from any claim against them by the injured person in respect of
the loss to which the settlement related, and a settlement by one wrongdoer
that keeps alive the possibility of an action by the injured person against
others who are concurrently liable for his injury. A settlement between the
injured person and one concurrent wrongdoer could bar a claim by the
injured person against other concurrent wrongdoers if the terms of the
settlement expressly released the liability of others for the loss to which the
settlement related, or if the payment to the injured person completely
satisfied that person's claim. That the latter type of settlement entitles the
settlor to contribution is evident from the decision of the Ontario Court of
Appeal in Nesbitt v. Beattie?^

Partial settlements raise more difficulties. Since a person has a right to
be paid contribution only when one wrongdoer has become obligated to pay
more than his fair share of the loss, it is not every partial settlement by a
concurrent tortfeasor that will entitle him to contribution. ^^ Whatever the
injured person receives under a settlement with one tortfeasor must be taken
into account in any proceedings against others who are concurrently liable
for the loss; the plaintiff's recoverable loss will be diminished by the amount
of any settlement made with one tortfeasor. ^^ While it will normally be most
satisfactory to secure a settlement that concludes the injured person's claims
against all those who are liable to him in respect of the loss, this is not always

^' Quaere, though, whether Wachowich J. was correct to think that Salmon L.J. would
have allowed contribution if D2 was able to establish that Dl was under no liability to P:
set supra, note 16.

Supra, note 10.

^^ This is not to say, however, that quia timet proceedings cannot be instituted, and
entitlement to contribution litigated before the claimant has actually paid anything.

^"^ See Dixon and Dixon v. The Queen in rif^ht of British Cohunhia and British Cohanhia
Hydro and Power Authority, supra, note 11. See, also, Brvanston Finance Ltd. v. de
Vries, [1975] Q.B. 703, at 723, [1975] 2 All E.R. 609 (C.A.).

possible. The present law encourages partial settlements between the
injured person and one tortfeasor by allowing the injured person to sue
others for any amount of his loss for which the settlement did not fully
compensate him,^^ and by permitting the settling tortfeasor to recover from
others who are concurrently liable any amount in excess of the share of the
loss that he fairly ought to bear.^^

The disadvantage of the present law, however, is that a person who
purports to settle only his own share of the liability cannot thereby ensure
that he will be immune from other legal proceedings. If the injured person
sues the other tortfeasors, they may serve a third party notice upon the
tortfeasor who had settled, and seek contribution from him.^^ Such a claim
will succeed if the settlement figure was based on too low an estimate of
either the injured person's loss or the settling wrongdoer's degree of respon-
sibility for it. To allow a claim for contribution against a tortfeasor who has
settled would seem seriously to limit the incentives that tortfeasors have for
settling their own portion of the injured person's claim. However, the
settling tortfeasor can often adequately protect himself from being required
to make further payments by way of contribution by obtaining an indem-
nity from the injured person.

3. REFORM OF THE LAW

(a) Should There be a Right of Contribution Following a
Full Settlement?

The first question is whether Dl should be able to claim contribution
from D2 following a settlement between Dl and P that is in full satisfaction
of P's claim. It will be recalled that section 3 of the Negligence Act specifi-
cally provides that a claim for contribution may be made by a tortfeasor who
has settled with the person who has suffered damage for which the claimant
and other tortfeasors are concurrently liable.

This is eminently sensible. Were the law otherwise, out-of-court settle-
ments would be discouraged.^^ A person may properly be regarded as
obliged by law to pay a sum of money whether or not that liability was
established in litigation. Moreover, Dl's payment will have conferred a
benefit upon D2 by extinguishing D2's liability to P. The Commission

2^ Courts of Justice Act, 1984, S.O. 1984, c. 11, s. 149(1), discussed supra, ch. 2, sec. 2(a).
^^ Negligence Act, supra, note 2, s. 3.
^^ ^Qt supra, note 11.

The English Law Reform (Married Women and Tortfeasors) Act, 1935, supra, note 1,
was much less explicit on the right of a settling tortfeasor to claim contribution.
However, principally for the reason given in the text, the Court of Appeal was prepared
to stretch the language of the Act somewhat to cover the settlement situation: Stott v.
West Yorkshire Road Car Co. Ltd. , supra, note 1. The Civil Liability (Contribution) Act
1978, c. 47 (U.K.), s. 1(4), confirms this.

recommends, therefore, that a concurrent wrongdoer should be entitled to
claim contribution from another concurrent wrongdoer where the former
has settled with the injured person in full satisfaction of that person's
claim. 2^

(b) Dl's Liability to P: Its Relevance to Contribution
Claims

As we have already seen, there is authority in Ontario for the proposi-
tion that the right to contribution extends to those who settle their supposed
liability to the injured person, even if it subsequently transpires that they
could not have been successfully sued by the injured person. ^^ If the
Commission's proposal that the right to contribution should be generalized
so as potentially to include all concurrent wrongdoers, whether the conduct
that caused the loss was a tort, a breach of contract, or a breach of a fiduciary
or statutory duty, then situations in which settlements are made by those
who could not be sued by the injured person may well increase. For
example, a supplier of defective goods may decide to compensate an
important purchaser in order to preserve goodwill, even though he may
effectively have excluded his liability by inserting an exemption clause in the
contract. Should the suppher in these circumstances be able to claim
contribution from the negligent manufacturer whom the purchaser could
successfully have sued in tort for his loss? Even where there is no contractual
exemption clause, it may make commercial sense to compromise a claim
rather than to litigate, notwithstanding that the person making the compro-
mise does not believe that he would be held liable in a proceeding brought
against him by the claimant.

To return to the restitutionary framework within which we have
considered the appropriateness and extent of contribution claims among
concurrent wrongdoers, the legal liability of the claimant for contribution to
the injured person is relevant in two respects. First, it will not always be clear
that a person who has settled a claim for which he was not legally liable
thereby confers any benefit upon a person who is liable to the injured
person. Thus, an ex gratia payment made for reasons of friendship, sympa-
thy, or moral obligation is likely to be regarded as a collateral benefit for
which P will not be required to account in his action against the person who
is legally responsible for his injury.^' In Dawson v. Sawatzky .'^'^ a neighbour,

^^ See the Commission's proposed Contribution and Comparative Fault Act (hereinafter
referred to as "Draft Act"), s. 17(1). The Draft Act appears as an Appendix of this
Report. Concerning the calculation of the sum payable by D2 to Dl, see infra, ch. 8,
sec. 2(b).

^^ Marschler v. G. Masser's Garage, supra, note 12.

^' A payment may, of course, constitute a collateral benefit even if the payor was legally
required to make it. Payments made by insurers under indemnity insurance contracts
are an obvious example.

^2 [1946] 1 D.L.R. 476, [1946] 1 W.W.R. 33 (Sask. C.A.).

who was being taken to hospital by the plaintiff, altruistically paid money to
the plaintiff to compensate him for the damage caused to his vehicle in the
course of the journey by the negligence of the defendant. The damages
recoverable by the plaintiff from the defendant were not reduced by this
sum.

In addition, there is a common law rule that a stranger's voluntary
payment of another's debt does not necessarily prevent the creditor from
suing the debtor. ^^ If a person mistakenly settles a claim in circumstances
where the payment does not satisfy or reduce the injured person's claim
against others, then there would seem to be little to be said in favour of
granting any right of contribution. It should be noted that the rule respecting
the unauthorized payment of the debts of others evolved at a time when
choses in action were less capable of assignment than they now are, and may
therefore appear somewhat anomalous. However, the law still does not
generally permit the assignment of claims to unliquidated damages.^"*

Even if the settlement does confer a benefit upon those who are liable to
the injured person by discharging or reducing their liability, the fact that the
settlement was made by a person who was not legally liable may require
consideration of the principle that those who officiously confer benefits
upon persons who have not requested them should not be entitled to
restitution. A wrongdoer may thus argue that, while the settlement con-
ferred a benefit upon him by reducing his liability, since the settlement was
made by a person who was not otherwise under any obligation to the injured
person, the payment was purely voluntary.^^

There are certainly good arguments for confirming by legislation the
position adopted in Marschler's case,^^ and extending it to other heads of
alleged civil liability. First, it obviously encourages the settlement of claims
by allowing Dl to claim contribution from those who are liable for P's loss

" Goff and Jones, The Law of Restitution {26 td., 1978), at 15, «. 91, and 250-51. However,
when payment is made in full satisfaction of another's debt, the creditor may be
prevented from suing his debtor because to do so would be a "fraud" on the payor, or a
"breach of trust": Hirachand Punamchand v. Temple, [1911] 2 K.B. 330 (C.A.).

^^ The right to sue for damages for a tort or breach of contract may be assigned if it is
connected with a property or some analogous interest: see Megarry and Baker (eds.),
Snell's Principles of Equity (27th ed., 1973), at 72.

For an example, see Owen v. Tate, [1976] Q.B. 402, [1975] 2 All E.R. 129 (C.A.), where
the plaintiff became a surety for a debt without the request of the debtor. The plaintiff
was required to pay the creditor, but was refused an indemnity from the debtor on the
ground that he had officiously exposed himself to liability to the creditor. Compare
Norton v. Haggett, 85 A. 2d 571 (Vt. Sup. Ct. 1952), where the plaintiff was denied
restitution of money that he had paid to discharge a mortgage that secured a debt owed
by the defendants. One reason for the decision was that the plaintiff had not told the
mortgagee that he intended to take an assignment of the debt which, the mortgagee
alleged, he would not have been willing to assign to the plaintiff.

Supra, note 12.

even though Dl is not liable. Secondly, it seems contrary to common sense
for D2 to be able to defeat Dl's claim by establishing that D2 was exclusively
liable to P, whereas Dl's claim may succeed if he establishes that he was
indeed liable to P, no matter how small his fair share of responsibility is
ultimately determined to be. Thirdly, the benefit to D2 will normally be
quite clear; he has been saved from having to pay a sum to P that he could
otherwise have been legally compelled to pay. This is not the kind of
"unrequested" benefit for which it is unfair to require D2 to pay: Dl's
payment has not deprived D2 of any real choice about the way in which D2
will allocate his resources. ^^

The issue has been considered in a number of other jurisdictions. The
Report published by the Alberta Institute of Law Research and Reform
recommends that a person who has settled another's claim should not be
deprived of a right to contribution on the ground that he was not liable to the
injured person.^^ The Report states that Dl is not required to establish that
he had reasonable grounds for believing that he was liable to P; it is not made
clear, however, whether contribution is available to a person who settled,
correctly beheving that he was not liable. The Institute may have intended
this situation to be covered by its recommendation that a settlement must
not be for an "excessive" amount. It could certainly be argued that any
amount paid by a person who correctly believed that he was not liable at all
is excessive, and that the sum recoverable in a contribution claim should be
nil, as "the amount at which the claim should have been settled" by Dl.^^

Section 12(3) of the Uniform Contributory Fault Act, adopted by the
Uniform Law Conference of Canada,"*^ also provides for the recovery of
contribution by a person who gave valuable consideration for a release of all
those concurrently liable for the injured person's loss, whether the claimant
for contribution "is a wrongdoer or not". The amount of the contribution
recoverable is based on the lesser of the value of the consideration actually
given and the amount that "in all the circumstances it would have been
reasonable to give for the release". This latter provision could be used to
deny any contribution at all to a person who settled despite his correct belief
that he was not Hable.

■^^ There may, of course, be situations in which D2 may be prejudiced by being obligated to
Dl, rather than to P. He may, for example, have been able to reduce his liability to P by
bargaining from a position of strength, or the relationship between P and D2 may be
such as to make it unlikely that P would press his claim against D2 to litigation. These
considerations justify retaining an "officiousness" defence.

^^ Alberta, Institute of Law Research and Reform, Contributory Negligence and Concur-
rent Wrongdoers, Report No. 31 (1979) (hereinafter referred to as "Alberta Report"), at
54, Recommendation 11. See discussion ibid., at 53-54,

^^ Ibid., at 56, Recommendation 12. See discussion ibid., at 55-56.

^^ Uniform Law Conference of Canada, Proceedings of the Sixty-Sixth Annual Meeting
(1984), Appendix F, Uniform Contributory Fault Act.

A similar result is reached by the Irish Civil Liability Act, 1961 /' which
provides for the recovery of contribution following a settlement by one of
the wrongdoers.'^^ Section 29(1) provides as follows:

29.— (1) In any proceeding for contribution, the contributor [D2] shall not be
entitled to resist the claim on the ground that the claimant who has paid the
injured person [P] was not liable to such person

The provision in section 22(1) that if the amount of the settlement was
excessive the court "may fix the amount at which the claim should have
been settled", may also enable a court to reduce to zero the amount
recoverable by way of contribution if the knowingly non-liable settlor
should not have settled at all.

Section 4 of the American Uniform Comparative Fault Act"^^ is not
altogether clear whether a settlement between P and Dl gives rise to a right
to contribution only if Dl can establish that he was liable to P for the injury
at the time that he settled. For while subsection (1) confines the right of
contribution to persons who are "liable" for a single loss, subsection (2),
which specifically deals with contribution following a settlement by one
person, does not include in the conditions precedent to a successful claim a
requirement that Dl establish his liability to P. However, in those states in
which a right to contribution among concurrent wrongdoers is recognized,
the weight of authority favours allowing a person who has settled with the
injured person, under a mistaken belief that he is liable, to recover contribu-
tion, provided only that if D2 has reasonably refused to join in the settle-
ment he can contest the reasonableness of the amount paid by Dl and, of
course, his own liability to P.^"^

In a recent Working Paper,^^ the New Zealand Contracts and Commer-
cial Law Reform Committee has recommended that Dl should be able to
claim contribution after settling with P, and that it should not be open to D2
to defend the claim on the ground that Dl was not liable to P. In order to
protect D2 from being adversely affected by a settlement to which he was
not a party, the Committee has recommended that the compromise must be
"reasonable having regard to all the factors that influenced the
settlement".'^^

"*' Civil Liability Act, 196L No. 41.

^2 Ibid., s. 22(1).

National Conference of Commissioners on Uniform State Laws, Uniform Comparative
Fault Act, Uniform Laws Annotated, Vol. 12 (1987 Pocket Part). The Act was approved
by the Commissioners in 1977.

"^"^ Palmer, The Law of Restitution (1978), Vol. II, s. 10.6(a), at 398-401.

"^^ New Zealand, Contracts and Commercial Law Reform Committee, Working Paper on
Contribution in Civil Cases (1983), at 15-17. The Committee was also tentatively of the
view that a wrongdoer who had settled the injured person's claim should not be
subsequently liable to pay contribution to a concurrent wrongdoer {ibid., at 17-18).

"^^ Ibid., at 17.

The English Civil Liability (Contribution) Act 1978^'^ enables a person
to claim contribution after entering into a bona fide settlement with the
injured person. The relevant section provides as follows:

L— (4) A person who has made or agreed to make any payment in bona fide
settlement or compromise of any claim made against him in respect of any
damage (including a payment into court which has been accepted) shall be
entitled to recover contribution in accordance with this section without regard
to whether or not he himself is or ever was liable in respect of the damage,
provided, however that he would have been liable assuming that the factual
basis of the claim against him could be established.

The inclusion of both the requirement that the settlement must have been
made bona fide and the emphasized words was presumably intended to
exclude claims for contribution by those who have settled a claim for their
own extraneous reasons that may be unconnected with any belief in their
Hability and claims for contribution by those whose conduct could not in
law have exposed them to liability.

A common feature of the above proposals for reform and of legislation
that has dealt with the issue expressly, is that a person who has settled an
injured person's claim should not be prevented from seeking contribution
solely because that claimant could have successfully defended litigation
instituted against him by the injured person. The Commission is of the view,
and accordingly recommends, that, in order to encourage the settlement of
disputed claims, a person from whom contribution is claimed should not be
able to defend the claim merely on the ground of Dl's non-liability to R"*^
There seems little reason why D2 should be entitled to the windfall of a
reduction of his liability to P as a result of a mistakenly settled claim between
P and Dl. The production of evidence by D2 that Dl might have been able to
persuade P not to enforce his claim against him should not in itself suffice to
relieve D2 of liability to Dl. Nor should Dl's right to contribution depend
upon whether P's claim against him would fail on the facts, as opposed to a
question of law: the distinction between mistakes of law and of fact is often
difficult to draw, and the significance that it has assumed in the law of
restitution has been much criticized."^^ It would be unfortunate if it were to
be made a critical element in the context of contribution claims. A benefit
that is conferred as a result of a mistake, whether of fact or law, should not be
regarded as officiously thrust upon the recipient.

Most settlements of asserted liability are presumably made by those
who believe that their conduct has indeed exposed them to liability to the
claimant, or at least who think that the claimant's allegations are sufficiently
plausible that there is a risk that legal proceedings may be taken against
them, which may result in a finding of liability. To permit persons who settle

^'^ Supra, note 28, s. 1(4).
^^ Draft Act, s. 17(2).

'^^ GofTand Jones, supra, note 33, at 91-92.

in these circumstances to seek contribution will effectively dispose of most
cases. However, there may well be some situations that are not covered.
These include cases in which a person who has no connection at all with the
injury settles the injured person's claim, whether for reasons of altruism,
friendship, or moral obligation. ^^ Similarly, a person who knows that he has
a cast-iron defence to any proceedings that P might institute may nonethe-
less decide to pay in order to avoid the bother of defending litigation or to
preserve his commercial reputation or goodwill with P. Assuming that any
payment by Dl in these circumstances does reduce or discharge D2's
liability to P, should Dl be able to advance a claim for contribution on the
theory that it would be unjust not to require D2 to pay Dl for the benefit that
Dl's payment to P has conferred upon D2?

To confer a right upon anyone who has paid money to an injured
person to claim what amounts to an indemnity from those legally respon-
sible for the injury, regardless of whether the payor either had any connec-
tion with P's loss or believed that he was or might be held liable, would
seriously undermine the principle that claims for unliquidated damages are
not freely assignable. A less friendly claimant may thus be thrust upon D2 to
his detriment. On the other hand, to attempt in advance to specify
comprehensively the circumstances in which claims for contribution will or
will not be permitted is unlikely to succeed.

The Commission has come to the conclusion and, accordingly, recom-
mends that the court should be empowered to refuse contribution if the
person claiming contribution made the settlement without believing that he
was or might be liable and without regard to any legal proceedings that
might be instituted against him by the injured person for the claim settled.^ ^

(i) Introduction

The problems considered in this section arise whenever a person settles
a claim by the injured person in such a way that other concurrent wrong-
doers remain liable to P, although the sum that they may be required to pay
to the successful plaintiff will be reduced by the amount of the settlement.
The important questions are, first, whether the settling wrongdoer should be
able to claim contribution from the others, and secondly, whether a wrong-
doer who has been sued to judgment by P, or who has settled P's claim,
should be able to recover contribution from a person who had ceased to be
liable to P because he had already settled with the injured person.

Although these questions raise their own particular problems, they
ought initially to be considered together. The reason is that, if a person who
settles for more than his fair share of P's loss is entitled to contribution, it

See, for example, Dawson v. Sawatzky, supra, note 32.
^' Draft Act, s. 17(2).

might be expected that a wrongdoer who is able to purchase his immunity
from suit by the plaintiff for a price that is less than his fair share should be
liable to contribution claims from other concurrent wrongdoers. The
difficulty with this argument, of course, is that it effectively prevents a
wrongdoer from settling his own estimated share of P's loss in the knowledge
that he will be immune from suit from both P and other concurrent
wrongdoers. This, as we have noted, may deter early settlements for less
than P's full claim by one of a number of possible defendants.

The evenness of the balance of the competing policy considerations
that bear upon this problem is indicated by the range of solutions that have
been recommended or actually adopted in jurisdictions that have dealt with
it. Before examining the possibilities, it may be helpful to set out the
principal policy concerns that any solution must attempt to address. First is
the interest in encouraging the settlement of hability without resort to
litigation. It is obviously good policy to minimize the occasions on which the
expenses and delays of litigation are incurred by individuals, and to ensure
that judicial resources are not spent wastefuUy. Any satisfactory rules should
not discourage settlements by either imposing unduly severe consequences
upon parties who make an unfavourable settlement, or withholding finality
from a settlement made in order to avoid the possibility of litigation. The
law should seek to uphold the legitimate expectations of those who have
entered into settlement agreements.

A second relevant concern is that the injured party should be able to
recover proper compensation for those legal wrongs that have caused his
loss. The injured person may also be in immediate need of cash, which a
settlement would provide. Third is the consideration that those who are not
parties to a settlement should not be prejudiced by an agreement made
between the injured person and one of the wrongdoers. Fourth is the need to
provide clear and workable rules by which the rights and duties of the parties
are regulated. It will become apparent that it is extremely difficult to satisfy
all these interests to the fullest extent, and that the task of reformers is to
strike the best balance in as many situations as possible.

Most of the difficulties discussed below will be avoided if the injured
party and all those against whom he has a claim in respect of his loss join in
the settlement, and agree to the sum that each is to pay to the injured person
in final settlement of the claim. There will, however, be instances in which P
and only one of the possible concurrent wrongdoers settle for less than P's
legally recoverable loss: for instance, P may not know at the time of the
settlement that others may also be legally liable for the loss; they may refuse
to settle because they doubt the validity of P's claim; they may believe that
difficulties of proof will deter P from suing them; or they may think that P
will not pursue his claim against them if he receives some compensation
from one of the wrongdoers.

We now turn to consider several possible solutions to the problems that
arise where a partial settlement is entered into with one concurrent wrong-
doer.

(ii) Alternatives for Reform

a. No Change in the Law

The first possibility is to leave the law as it probably already is, so that
the liability of D2 to P is reduced by the amount paid under a settlement
between P and Dl. If D2 is subsequently sued by P, he may join Dl as a third
party and claim contribution for any amount by which the judgment
against D2 exceeds D2's fair share of the liability Similarly, if Dl has settled
for what he believes to be more than Dl's fair share, he may institute
proceedings against D2 for contribution for the excess.

This approach was recommended by the English Law Commissions^
and appears to have been adopted by the English Civil Liability (Contribu-
tion) Act 1978.^^ Indeed, the issue arose in the recent case of Logan v.
Uttlesford District Council, ^^ in which it was held that a person (D2) who
had settled P's claim in a way that did not bar P from suing a concurrent
wrongdoer (Dl) could be brought into the litigation by a third party notice
served by Dl, and made subject to a claim by Dl for contribution. It was no
defence that by the time P sued Dl, D2 had ceased to be liable to P by virtue
of having partially settled P's claim.

The advantages of this solution are that it is already familiar to Ontario
lawyers and courts, appears not to have caused dissatisfaction, and
encourages settlement by P, who can always sue D2 if the amount for which
P settled with Dl falls short of P's total recoverable loss. Moreover, it
encourages Dl to settle by enabling him to recover contribution from a
concurrent wrongdoer if the settlement figure exceeds his fair share of their
liability.

The principal disadvantage of this solution is that it prevents Dl from
effecting a final settlement of his liability because he may be deprived of the
benefit of a good settlement by remaining liable to claims for contribution
from others who are concurrently liable for P's loss. Since the most impor-
tant reason for entering a settlement is to avoid the expense and aggravation
of litigation, Dl is denied the principal benefit of his bargain. From Dl's
point of view, a third party notice, or a separate action, by D2 for contribu-
tion is as troublesome as a further suit by P. And since it will often be
difficult for Dl accurately to estimate his own proper share of liability for a
claim to unliquidated damages, contribution claims after the settlement will
be far from uncommon. However, Dl can minimize this hazard by obtain-
ing an undertaking from P to indemnify him against claims for contribution
successfully made by concurrent wrongdoers. Of course, Dl may still have to

^^ The Law Commission, Law of Contract: Report on Contribution, Law Com. No. 79
(1977).

^^ Supra, note 28.

^^ The Times, London (February 21, 1984).

defend the contribution claim, and will have the burden of recovering from
P the amount covered by the indemnity.

b. No Right of Contribution

The most radical solution to the contribution difficulties produced by a
partial settlement made by one concurrent wrongdoer is to deny him any
right of contribution, and to protect him from any subsequent claim for
contribution by a concurrent wrongdoer who has either been found liable to
P or made a settlement with P. The key feature of this alternative is that, in
litigation between P and D2, the court determines whether D2 is hable to P,
assesses P's recoverable loss, but gives judgment against D2 only for the
amount of P's loss that is proportionate to D2's degree of fault. This involves
a departure from the principle of Uability in solidum, which the Commis-
sion has endorsed in chapter 3, and requires the court to allocate responsibil-
ity for P's loss among D2 and the concurrent wrongdoers who have settled,
although they will not be parties to the litigation. The most significant
difference that this makes to the litigation between P and D2 is that any
settlement between P and Dl is ignored for the purpose of quantifying D2's
liability.

An example will illustrate the way in which the above alternative
operates. Suppose that P, a cyclist, is injured when Dl's car collides with him.
Dl had swerved in order to avoid D2's small child who had run into the road.
P calculates that his loss is $5,000; Dl accepts this figure, estimates that, as
between himself and the parent of the child, he was no more than 50 percent
to blame, and offers to settle P's claim. Suppose, further, that neither P nor
Dl has been able to identify D2, the parent in charge of the child, or that D2
refuses to settle because he does not think he is liable. Dl offers P $2,500 in
final settlement of P's claim against Dl. P needs the money, and, in order to
avoid the expense, delay, and uncertainties of litigation, accepts Dl's offer. If
P subsequently sues D2, the court might find that D2 was negligent, and that
P's recoverable loss is $5,000. However, it might conclude that Dl was more
at fault than D2, and that D2 was only 25 percent to blame. Judgment
would be given in P's favour against D2 for the proportion of P's recoverable
loss ($5,000) that D2 should fairiy bear (25% x $5,000 = $1,250). P will thus
have recovered in all only $3,750. This will be because he underestimated
the extent of Dl's share of the liability. P would also fail to recover his total
loss if his settlement with Dl underestimated the total amount of P's loss for
which a court subsequently held the concurrent wrongdoers liable.

If this proposal requires P to bear the cost of a poor bargain with Dl, it
also enables P to retain the benefit of a good one. To use the above example
again, if a court were to conclude in the litigation between P and D2 that
D2's share of the responsibility for P's loss was 75 percent, then judgment
would be entered in P's favour for $3,750 (75% x $5,000). P would thus have
recovered $6,250 under the settlement with Dl and the judgment against
D2, even though if he had not settled, but had sued either Dl or D2, or both,
he would only have been awarded $5,000. P has thus benefited from making

100

a shrewd settlement with Dl. P would also benefit similarly if the settlement
with Dl had been based on an estimate of P's recoverable loss that was higher
than the amount for which a court later assessed P's loss in proceedings
against D2.

The Alberta Institute of Law Research and Reform has recommended
this solution,^^ which has been adopted in section 12(2) of the Canadian
Uniform Contributory Fault Act.^^ The American Uniform Comparative
Fault Act^^ now contains a similar provision: section 4(b) states that a
person whose settlement with the injured person does not discharge the
liability of concurrent wrongdoers has no right to contribution. Conversely,
section 6 protects the settling tortfeasor from any subsequent liability to pay
contribution to a concurrent wrongdoer who has been required to compen-
sate the injured person. In order to protect D2 from being prejudiced by the
terms of the settlement between P and Dl, to which he was, ex hypothesi,
not a party, section 6 reduces P's recoverable loss from D2 "by the amount
of the released person's equitable share of the obligation".

The advantages of this scheme are manifest. First, if a final settlement
of the injured person's claims against all possible wrongdoers is not attain-
able, removing the possibility that Dl may subsequently be confronted with
a claim for contribution by another concurrent wrongdoer will encourage
him to settle his own estimated share of the liability. Secondly, the proposal
does not unduly strengthen or weaken P's bargaining position with Dl,
because, by reducing D2's liability to his fair share, it makes P bear the cost
of a poor settlement with Dl and allows him to keep the benefit of a good
one. In other words, when bargaining with Dl, P is in much the same
position as he would have been in if there had been no concurrent wrong-
doer. Thirdly, the proposal leaves the liability of D2 unaffected by the terms
of the settlement. Because D2's liability is quantified without regard to the
settlement figure, D2 neither obtains a windfall as a result of P's extracting a
particularly high settlement from Dl; nor is he prejudiced by some unduly
low settlement, made perhaps as a result of collusion between P and Dl. It is
simply unnecessary for a court to embark upon the difficult task of

^^ Alberta Report, supra, note 38, at 61, Recommendation 13. See discussion ibid., at 57-
61.

^^ Supra, note 40.

Supra, note 43. It is instructive to note that this is the third solution adopted by the
Uniform Act. The 1939 version (National Conference of Commissioners on Uniform
State Laws, Uniform Contribution Among Tortfeasors Act, in Uniform Laws Anno-
tated, Vol. 12, at 57) allowed a claim for contribution to be made against a tortfeasor who
had too cheaply settled his own share of the liability to P. It was criticized for
discouraging settlements. As a result, in 1955 (ibid.) the settling tortfeasor's liability to
contribution was abolished, and the liability of other concurrent tortfeasors was reduced
by the amount for which P's liability had been bona fide settled. The problem with this,
however, was that the difficulty that D2 would have in establishing lack o( bona fides in
the settlement between P and Dl was likely to cause D2 to be prejudiced by a settlement
to which he was not party. See Reming, "Report to the Joint Committee of the
California Legislature on Tort Liability on the Problems Associated with American
Motorcyle Association v Superior Court" (1979), 30 Hastings L.J. 1465.

101

attempting to determine whether the settlement between P and Dl was
reasonable, bona fide, or collusive: the terms of the settlement cannot
prejudice D2 in any way.

Nonetheless, there are serious drawbacks against which these advan-
tages must be balanced. The most obvious is that the proposal purchases the
benefits of the finality of the settlement between P and Dl, and achieves
equity between Dl and D2, at the price of derogating from the principle that
the purpose of civil litigation is to ensure that the injured person is fully
compensated, no more and no less, for the loss that is attributable in law to
the wrongful conduct of the defendant. As we have seen, the proposal under
consideration can produce a judgment in P's favour against D2 that either
fails to compensate P to the full extent of his legally recoverable loss, or that,
when the amount of the settlement is taken into account, awards him a sum
greater than he could have obtained in litigation if there had been no
settlement.^^ By denying a right of contribution to Dl, and reducing P's
recovery against D2 to the latter's proper share, the scheme puts a premium
on the stronger party to the settlement exerting maximum pressure upon
the other in order to obtain the most favourable settlement.

In some circumstances, this might mean that the insurance company of
a tortfeasor would bring pressure to bear upon an injured person to accept a
low settlement, pressure to which the victim might be all too vulnerable if he
is in immediate need of money, is not legally advised, or has not fully
recovered from the effects of his injuries. ^^ The proposal to abolish rights of
contribution following settlement and to reduce the amount of the plain-
tiff's damages against D2 to the latter's own share would prevent the injured
person from recovering from a bad bargain by suing other concurrent
wrongdoers for the full amount of his loss minus the sum paid under the
settlement.

In other situations, it may be the injured person who is in the stronger
position, and thus able to extort a particularly generous settlement from one
wrongdoer. This may especially be the case if the right of contribution is
extended, as the Commission has recommended, to include other heads of
civil liability in addition to torts. For instance, suppose that the Ministry of
Transportation has engaged a firm of civil engineers in connection with the
design and supervision of the construction of a new highway The highway
soon requires extensive repairs because of a design defect, and because one
of the construction companies employed by the Ministry on the project

^^ Williams, Joint Torts and Contributory Negligence (1951), at 153, states that the scheme
was objectionable because "it ignores the rather strong feeling that one has against
allowing the plaintiff to recover double damages". That the scheme may prevent the
plaintiff from recovering in full against D2 is a more serious weakness, particularly in
cases of death or personal injury. It seems paradoxical that P should fare less well against
D2 than he would have done if there had been no Dl with whom P had settled.

^^ In extreme cases of overreaching, the injured person may be able to resile from a
settlement that was extorted by unconscionable abuse of power, fraud, or misrepresen-
tation.

102

executed the work carelessly. If the engineering firm is heavily dependent
upon government contracts for its business, it is likely to be willing to settle
the Ministry's claim generously in order to preserve commercial goodwill. It
may seem unjust that if the settlement is less than complete satisfaction, the
Ministry can still sue the construction company for its share of the responsi-
bility, and not account for the compensation that it has already obtained
under the settlement.

One answer to these objections may be that as long as the law permits
an injured person to make a final settlement of his claim against someone
whom he believes to be legally liable, it is inherently likely that the settle-
ment figure will be either greater or smaller than the amount that a court
would have awarded. Why, then, should it be offensive if the injured person
settles with one wrongdoer but has to sue another? The person sued is not
prejudiced by the settlement; indeed, he is given the full benefit of the
existence of another wrongdoer. The appropriate reply to this may be that
while there are sound reasons of policy for enabling parties to settle for
whatever sum they can, it does not necessarily follow that the effects of
freedom of contract should be extended to court-determined liability. In this
latter context, full compensation for wrongfully caused injuries is the
overriding policy.

A second objection to the Alberta Institute's scheme and to section
12(2) of the Uniform Contributory Fault Act is that to deny any right to
contribution where Dl's settlement does not completely discharge D2's
liability to P, but to allow contribution where it does, may produce arbitrary
results. Thus, when faced with an injured person who is able to drive a hard
bargain, a wrongdoer might well be advised to settle the whole of P's claim in
order to retain the opportunity of passing some on to a concurrent wrong-
doer. In order to ensure that he has done so with any degree of certainty, the
wrongdoer will have to agree to a settlement figure that is at least the amount
that P could recover in litigation, a matter that will be difficult to predict
with precision. Alternatively, Dl must seek to insert into the settlement a
clause providing that the injured person is releasing not only Dl, but any
other person against whom he may have a claim in respect of the loss.
However, if the injured person is in the stronger bargaining position, he is
unlikely to agree to this.

A third difficulty with the proposal concerns the conduct of the
litigation between P and D2. The burden of establishing D2's liability and
proportionate responsibility for the loss will be upon P. In order to discharge
this burden, it will generally be necessary for P to call Dl as a witness in an
attempt to minimize Dl's degree of fault. This may provide an occasion for
collusion between P and Dl to underestimate Dl's responsibility for the
injury.^^

^^ The Law Reform Commission of Hong Kong initially thought that the fact that the
settling wrongdoer would not be a party to the litigation brought by the injured person
against other concurrent wrongdoers was a fatal objection to the adoption of a scheme of

103

Another possible solution is to couple a denial of any contribution
following a partial settlement with a provision that when P sues D2, P's
damages will be calculated by subtracting from his full recoverable loss the
amount of the settlement between P and Dl or Dl's proportionate share of
the liability, whichever is less. Suppose, for example, that P's loss is $1,000,
and Dl settles his share of the liability for $300. If D2 is then found to be
liable to P, and his due portion of the liability to be 50 percent, then P will
recover $700. P is not thereby penalized in his litigation with D2 for a poor
settlement with Dl; D2 is the one who bears the loss. If, on the other hand,
P's settlement with Dl proves very favourable because D2 is found 90
percent to blame, then P will be awarded $900 in damages against D2. D2
pays his proper share, but if the amount of the settlement with Dl is added to
the judgment against D2, P will have received more than his recoverable
loss.

The advantages of this scheme are that it makes the settlement between
P and Dl final and, by ensuring that however unfavourable the settlement is
for P, P is able to receive full compensation from D2, it does not elevate
considerations of fairness between Dl and D2 over the aim of allowing P full
recovery. Its disadvantage, however, is that it regulates the quantum of D2's
Uability by the amount of the settlement, and thus exposes D2 to the risk of
having to pay P more than his fair share of the loss, without giving him an
opportunity of obtaining contribution from the other concurrent wrong-
doer. The possibility of a collusive settlement between P and Dl, under
which Dl settles for a minimal figure and P recovers the remainder from D2,
is all too real. The difficulties of defining improper collusion in this context,
and of producing the necessary evidence to prove it, are likely to be
immense.

Moreover, it seems objectionable in principle that D2's liability to P—
which he cannot apportion among those concurrent wrongdoers who have
settled— can be increased beyond his fair share by the terms of a settlement
to which he was not a party. In short, this proposal comes all too close to the
vice of the common law rule in Merryweather v. Nixan:^^ it gives the injured
person power to choose which wrongdoer will ultimately bear the burden of
compensating him for the loss.

this kind. However, the Commission received representations from the Bar that this was
unlikely to be a problem. The settling wrongdoer could be subpoenaed either by the
plaintiff, who would be anxious to minimize the responsibility of the settling wrongdoer,
or by the defendant, who would wish to maximize it. It was also pointed out that there
would be many instances in which the degree of responsibility to be attributed to the
defendant could be established by evidence other than that provided by the wrongdoer
who had settled.

The Commission ultimately rejected this solution, however, because of its poten-
tially harmful consequences for plaintiffs. See The Law Reform Commission of Hong
Kong, Report on the Law Relating to Contribution Between Wrongdoers, Topic 5 ( 1984),
paras. 4.10-4.18, at 17-21.

(1799), 8 TR. 186, 101 E.R. 1337 (K.B.). See supra, ch. 4, sec. 2.

104

c. One Way Contribution

A variation on the scheme considered above is contained in the Irish
Civil Liability Act, 1961 ,^^ which, Uke much of the rest of the statute, is
based upon a proposal and draft bill of Professor Glanville Williams.^^ This
scheme differs from the Alberta proposal and the Canadian Uniform
Contributory Fault Act in that it prevents the injured person from recover-
ing, as a result of a partial settlement with Dl and a judgment against D2,
more than the amount that he would have recovered if he had not settled
with Dl. This is achieved by section 17(2), which provides that if P settles
with Dl and then sues D2, P's damages will be the difference between P's
total loss and the amount of either P's settlement with Dl or Dl's proper
share of the liability, whichever is the greater. D2 has no right of contribution
against Dl, but Dl may claim contribution from D2.

An example illustrates the operation of this scheme. P has suffered a
loss of $1,000 as a result of an automobile accident for which Dl and D2 are
concurrently liable. P and Dl settle for $400 on the assumption that Dl is 50
percent to blame. If P institutes proceedings against D2 in which D2 is held
liable, but is found to be only 30 percent responsible, judgment will be given
in P's favour for only $300. This is the difference between P's total loss and
the amount of Dl's fair share of responsibility. If, on the other hand, D2 is
found to be 70 percent responsible, then P will recover $600, because on
these facts the settlement figure is greater than Dl's proper share. As these
examp}es show, the effect of the Irish Act's solution is to prevent P from ever
obtaining more than his legally recoverable loss; however, it makes P pay for
a poor settlement with Dl by identifying him with the fair share of Dl's
responsibility.

This scheme would seem less likely to promote settlements than that
proposed by the Alberta Institute and the American Uniform Comparative
Fault Act. This is because if the injured person underestimates the degree of
fault of Dl and settles for too low a figure, he bears the shortfall; but this risk
is not offset by the possibility that if he settles favourably with Dl, he can
keep the benefit of a good bargain.

On the other hand, the Irish Act allows Dl to recover contribution from
D2 if Dl settles for more than his proportionate share; thus, Dl can afford to
settle on fairly generous terms with P in the knowledge that he can claim

^^ Supra, note 41.

See Williams, supra, note 58, at 152-55 and 207. See, also, Tasmania's Tortfeasors and
Contributory Negligence Act 1954, No. 14 of 1954, s. 3(3) (found in Tasmanian Statutes
1826-1959 (Reprint), Vol. 6). Section 3(3) renders contribution unnecessary by provid-
ing that if a plaintiff who has settled with one concurrent tortfeasor subsequently sues
another, the damages recoverable in this action are reduced by the amount paid for the
release, or any amount or proportion by which the release stipulates that the total claim
against the settling tortfeasor shall be reduced, or the proper share of the liability that the
settling tortfeasor should bear, whichever of these amounts is the greatest.

105

contribution for any excess. By protecting Dl from the possibility of a later
contribution claim in the event that Dl settles for less than his proportionate
share, the Act gives finality to the settlement and thus provides an incentive
to Dl to reach a settlement with P. The scheme also prevents D2 from being
unfairly affected by the settlement between P and Dl because D2 can never
be made liable for more than his judicially determined share of the liability

(iii) Conclusions

It should be apparent from the preceding consideration of the principal
solutions to the contribution problems posed by partial settlements that
each has its own strengths and weaknesses. It is difficult to produce a rule
that will encourage the making of fair and final settlements, ensure that the
injured person is fully compensated, but no more, and produce equity
among concurrent wrongdoers. It seems that some policy objectives can be
attained only by sacrificing others. It thus becomes necessary to decide
whether some policy objectives are more important than others.

There is obviously much to be said for retaining the present law, based
on the view that the overriding consideration should be to ensure that the
injured person is properly compensated, and that, if he makes a poor
bargain with one wrongdoer, he should be able to take full advantage of the
existence of another wrongdoer whose conduct also caused his loss. Since
the object of civil proceedings for breach of an obligation is generally to
compensate the injured person, his recovery against D2 will be reduced by
the amount for which Dl settled P's claim. If the present law achieves this
result, it is a very considerable strength. To allow contribution policy to
determine the primary rights of the injured person is to permit the tail to
wag the dog.^"^

On the other hand, the inability of one wrongdoer to make a final
settlement of his own estimated share of responsibility may well discourage
some settlements from being made. However, the extent to which the
present law discourages settlements should not be overemphasized, particu-
larly in the absence of empirical data: the fact that under the present law P's
claim against D2 is not prejudiced by a poor settlement with Dl, and that Dl
may seek to recover contribution if he settles too generously, may well
provide ample incentives to settle by giving each party a further opportunity
to recover from a bad bargain. Finally, despite the complications that may
theoretically arise from giving rights of contribution after a partial settle-
ment, this is a system with which lawyers in Ontario have become familiar.
It appears to have provoked few allegations of injustice or inconvenience.

^'^ It should be noted, however, that the practical effect of Dl's extracting an indemnity
from P against further liability is to reduce the amount of the damages for his loss that P
will be able to retain. It would be a mistake, therefore, to overemphasize the practical
differences between the Canadian Uniform Contributory Fault Act, supra, note 40, and
the position taken by the Commission in this Report.

106

Nor is it without significance that the English Law Commissioners and the
British Parliament have recently decided to retain it.^^

Nonetheless, in addition to both statutory reforms and recent recom-
mendations for reform, there is considerable academic and some practi-
tioner support^^ for a regime that immunizes the settling wrongdoer from
claims for contribution and achieves justice between Dl and D2 by placing
the cost of a poor settlement upon the injured person. The Canadian
Uniform Contributory Fault Act and the American Uniform Comparative
Fault Act illustrate the adoption of this option, as does, with some variation,
the Irish Civil Liability Act, 1961 . Recent Reports of the Alberta Institute of
Law Research and Reform and the New Zealand Contract and Commercial
Law Reform Committee^^ have recommended its adoption. In addition,
Professors Glanville Williams^^ and John G. Fleming, among others, have
given it their support. Addressing himself to the objection that the version of
the scheme ultimately accepted by the American National Conference of
Commissioners on Uniform State Laws (and the Alberta Institute) allows an
injured person to recover more than his total loss, Fleming has written :^^

Nor does the windfall aspect present a serious argument to the contrary. The
purpose of the one-satisfaction rule is to prevent the plaintiff from unjustly
enriching himself at the expense of the defendants, but here that principle is not
violated: the non-settling defendants will still not be required to pay any more
than their apportioned shares and the settlor has bought his peace.

In addition to encouraging final settlements, preventing the bargaining
strengths of the parties from being skewed by the presence of a concurrent
wrongdoer who has not joined in the settlement, and achieving justice
between Dl and D2, the abolition of rights of contribution would simplify
the law. It will be recalled that the complications of contribution, and
especially their possible adverse effect upon the efficient vindication by the
injured person of his rights, have been used to justify the denial of contribu-
tion among wrongdoers altogether.

Moreover, it can be argued that to subject a person who has settled his
portion of the loss to a claim for contribution, if it turns out that he paid less
than a fair share of his liabiUty, not only removes an incentive for settling,
but also is inconsistent with the restitutionary premises upon which rights of

See supra, notes 52 and 53 and accompanying text.

In addition to the writers whose views are noted in the text, see, also, Larson, "A
Problem in Contribution: The Tortfeasor with an Individual Defense against the Injured
Party", [1940] Wis. L. Rev. 467; MacPherson, "Contribution and the Distribution of
Loss among Tortfeasors" (1975-76), 25 Am. U.L. Rev 203; and Teplitsky and Gomberg,
"Acceptance of Money Paid into Court by One of Several Defendants: Lawyer Beware"
(1977-78), 1 Advocates' Q. 123.

^"^ ^wpra, note 45, at 17-18.

^^ Supra, note 58, at 152 et seq.

Supra, note 57, at 1497-98. But see Williams, supra, note 58.

107

contribution are based. For if Dl has already settled, albeit cheaply, by the
time that D2 is held liable to the injured person, Dl derives no benefit from
D2's satisfaction of the judgment because Dl is no longer liable to P. An
essential element of the claim for contribution is therefore absent: Dl has
not been unjustly enriched at D2's expense.

The argument that a person who was once liable to P, but whose liability
had ceased by the time that a concurrent wrongdoer is required to compen-
sate P, should not be subject to a claim for contribution can be applied in
other situations. This issue has often surfaced in connection with limitation
periods. Suppose, for example, that DFs prima facie right to contribution
arises when D2 can no longer be successfully sued by P because the
limitation period governing P's cause of action against D2 has lapsed. Or D2
may have become immune from suit by P because P has already instituted
legal proceedings against him and has been unsuccessful. These difficult
questions are explored more fully in chapter 7 of this Report.

For present purposes, it suffices to note that the fact that Dl has become
immune from suit by P by virtue of his settlement is not necessarily a
conclusive argument against D2's subsequently claiming contribution. It
can be argued, for instance, that by settling his liability for a sum that is
smaller than his comparative degree of fault, Dl has undeniably received a
benefit. The benefit has been conferred upon him by the injured person.
The key policy question posed is whether Dl should be able to retain this
benefit. If the answer is that he should, because he has bargained for it, then
no claim for contribution ought to be allowed against him. However, this
conclusion prompts a further question: if Dl is to keep the benefit without
paying for it, upon whom should its cost fall? One possibility is that since the
benefit was conferred by the injured person, he should pay for it by a
reduction in the damages that he can recover from D2. As we have seen, this
can be accomphshed by Umiting P's recovery to D2's share of the fault. The
alternative is that the cost should be borne by D2 who remains liable to P for
the full amount of P's loss, less the figure at which P and Dl settled. For
reasons already discussed, neither alternative is entirely satisfying.

After weighing the various alternatives for reform, the Commission has
concluded that Dl should not be able to retain the benefit of a favourable
settlement with the injured party. He should remain liable to a claim for
contribution from a concurrent wrongdoer who is required to pay more
than his fair share of P's loss. We are also of the view that, if the wrongdoer
who has partially settled the injured person's claim is under a duty to
contribute when he has settled well, it is only fair that he should have a right
to contribution when he has made a poor settlement. The liability for
contribution of the wrongdoer who has settled has generally been regarded
as a more unattractive feature of the present law than his right to contribu-
tion where he pays P more than his proper share.

Accordingly, the Commission recommends that a person should be
entitled to institute or continue a claim for contribution if he settles the

108

injured person's claim in such a way as to reduce, but not extinguish, the
liability of other wrongdoers concurrently liable for the injured person's
loss.^^ The amount of contribution would be in respect of the consideration
given by the settling wrongdoer that exceeds his proportionate share of the
responsibility for the damage. We further recommend that if an injured
person obtains judgment against a wrongdoer, his damages should be
reduced by any consideration already given to him under a settlement by
another concurrent wrongdoer.^' Finally, we recommend that, where, fol-
lowing a settlement between the injured person and a concurrent wrong-
doer, another concurrent wrongdoer has been held hable to the injured
person or has settled the injured person's claim for an amount that exceeds
his proportionate share of the liability, he should be entitled to claim
contribution from the first concurrent wrongdoer for the excess, even
though the first concurrent wrongdoer has ceased to be liable to the injured
person by virtue of his own settlement with that person.^^

Some other questions remain concerning the sum to which a wrong-
doer who has settled may require a concurrent wrongdoer to contribute. In
particular, it may well be unfair to make the settlement figure determina-
tive. D2 is entitled to be protected from having to contribute to a sum that
exceeds an amount for which it was reasonable for Dl to settle P's claim.
These matters are considered in chapter 8.

Recommendations

The Commission makes the following recommendations:

1. Where a person who has settled the claim of an injured person claims
contribution from another who he alleges is liable for the injured
person's loss, it should be no defence to the contribution claim that the
claimant could never have been successfully sued by the injured person.
However, the court should be empowered to refuse contribution if the
person claiming contribution made the settlement without believing
that he was or might be liable and without regard to any legal proceed-
ings that might be instituted against him by the injured person for the
claim settled.

^0 Draft Act, s. 17(1).

^^ Ibid., s. 16. Our recommendation, unlike s. 1(4) of the English Civil Liability (Contribu-
tion) Act 1978, supra, note 28, does not require that the consideration for the settlement
must take the form of a "payment" of money by the wrongdoer to the injured person.
Instead, a contract price may be reduced, services rendered, or goods delivered. For a
brief discussion of the issue in relation to the 1978 English Act, see Dugdale, "Statutes [:]
The Civil Liability (Contribution) Act 1978" (1979), 42 Mod. L. Rev. 182, at 185.

Draft Act, s. 15(d).

109

2. A person who settles a claim made against him by the injured person
should be entitled to institute or continue a claim for contribution from
those concurrently liable if the settlement provides for the discharge or
reduction of the liability of the other concurrent wrongdoers to the
injured person.

3. If an injured person obtains judgment against a wrongdoer, his dam-
ages should be reduced by any consideration already given to him
under a settlement by another concurrent wrongdoer.

4. Where, following a settlement between the injured person and a con-
current wrongdoer, another concurrent wrongdoer has been held liable
to the injured person or has settled the injured person's claim for an
amount that exceeds his proportionate share of the liability, he should
be entitled to claim contribution from the first concurrent wrongdoer
for the excess, even though the first concurrent wrongdoer has ceased to
be liable to the injured person by virtue of the settlement.

CHAPTER 6

DEFENCES TO
CONTRIBUTION CLAIMS:
LIABILITY TO THE
INJURED PERSON

1. INTRODUCTION

The preceding chapters of this Report have been concerned principally
with the ingredients of a claim for contribution made by a person (Dl) who
has been held liable to, or who has settled with, the injured person (P). So far,
little attention has been paid to the defences to the claim for contribution
that may be available to the person from whom contribution is sought (D2).
However, in chapter 4, we recommended that the legal nature of the liability
that resulted in a single loss to the injured person should not defeat a claim
for contribution. In this chapter and the next, we shall focus upon the
possible defences that may be raised against a claim for contribution made
by a person who has prima facie established an entitlement. This chapter
considers, first, whether, in separate proceedings instituted against D2 by
Dl, D2 should be able to assert that the court that found Dl liable to P erred
in its conclusion, either in fact or in law, or that the court in the earlier
proceedings wrongly assessed the quantum of the loss suffered by P that
could properly be attributed to Dl's wrongdoing. '

Secondly, the chapter examines situations in which D2 could at no time
have been held liable to P for the loss sustained as a result of the conduct of
Dl and of D2. Should it invariably be a defence to a contribution claim that
D2 was never liable to P for the loss in respect of which Dl has been held
liable or has settled? Chapter 7 considers the relevance to a claim for
contribution of events that occurred after P's loss was sustained, as a result of
which D2 may have become immune from a successful suit by P. These
events include the expiry of a limitation period within which P must sue D2,
and entry of judgment in favour of D2 in proceedings instituted by P

' Somewhat similar issues may arise when Dl has paid compensation to P under a
settlement: should D2, when sued for contribution by Dl, be able to assert that Dl was
not in fact liable to P at all, or that had the matter been litigated, P would not have
obtained judgment against Dl? This, and other aspects of contribution claims following
a settlement between the injured party and one concurrent wrongdoer, were the subject
of chapter 5 of this Report.

[ 111]

112

2. LIABILITY OF Dl TO P

In this section, we are concerned with whether the existence of a
judgment in favour of an injured party against a wrongdoer should in itself
be sufficient to support a right to contribution, where the concurrent
wrongdoer against whom contribution is claimed alleges that the court in
the earlier litigation erred in its finding of liabiUty or quantum. Because,
under the rule in Cohen v. S. McCord & Co. Ltd. } the present law of Ontario
does not normally permit a person v^ho has been sued successfully by an
injured party to claim contribution in a separate action, the problem has not
had to be considered by our courts. However, the creation of the Federal
Court of Canada, with exclusive jurisdiction over suits against the federal
Crown, but apparently no constitutional competence over claims for dam-
ages against others, including concurrent wrongdoers whose liability is not
founded on applicable federal law, may give rise to these problems in the
future.^ An abolition or modification of the rule in Cohen v. S. McCord &
Co. Ltd. would have a similar effect. On the other hand, we believe that it
would be a mistake to overemphasize the practical importance of this
problem. The cases in which D2 resists a contribution claim on the ground
that Dl was not truly Uable to P are likely to be rare.

A point at which to start thinking about the question is to recognize that
the principle of res judicata would not prevent D2 from contesting a finding
made in the earlier litigation between P and Dl that Dl was liable to P, or that
the amount of P's recoverable loss was not as it was found to be by the court
that decided the case brought by P against Dl."^ The situation with which this
section is concerned must be distinguished, then, from the case where P sues
Dl and D2 as co-defendants, or where D2 is added as a third party in P's
action against Dl. In such circumstances, the court's apportionment of
liability between Dl and D2 clearly is binding upon both of them for the
purpose of determining their rights to contribution as between themselves.^
The Commission sees no need to change the latter rule. Accordingly, we
recommend that, if D2 was a party to the litigation between P and Dl, or was

2 [1944] O.R. 568, [1944] 4 D.L.R. 753 (C.A.) (subsequent references are to [1944] O.R.).

^ See, in particular, The Queen v. Thomas Fuller Construction Co. (1958) Ltd., [1980] 1
S.C.R. 695, (1979), 106 D.L.R. (3d) 193. For a comment on this unsatisfactory area of
the law, see Evans, "Federal Jurisdiction— A Lamentable Situation" (1981), 59 Can. B.
Rev. 124. See, also, Kraft v. The Queen in right of the Province of Ontario, [1972] 3 O.R.
684, 29 D.L.R. (3d) 275 (H.C.J.) (main action instituted in jurisdiction where contribu-
tion not available), and supra, ch. 2, sec. 4(a). With respect to recent cases that would
expand the jurisdiction of the Federal Court, see discussion supra, ch. 2, note 97.

^ See Inglis Ltd. v. South Shore Sales and Service Ltd. (1978), 31 N.S.R. (2d) 562, at 567-
68, 8 C.P.C. 58 (S.C, T.D.), rev'd on other grounds (1979), 31 N.S.R. (2d) 541 (S.C, App.
Div.). See, further, Cheifetz, Apportionment of Fault in Tort (1981), at 116-20.

5 See Kirk v. Faugh, [1951] O.W.N. 745 (H.C.J.).

113

joined as a third party, both she and Dl should continue to be bound by the
findings of the court in that litigation.^

Despite the apparent absence of Ontario judicial authority directly on
point, it may be noted that in Marschler v. G. Masser's Garage,'^ Lebel J.
held that a claim for contribution made by Dl, following a settlement that he
had made with P, could not be defeated by an allegation by D2 that Dl had
settled under the mistaken belief that he was liable to P. His Lordship
interpreted the reference in section 3 of the Negligence Act to a "tort feasor"
who had settled her liability with P to include a person who mistakenly
believed herself to be liable. One might think, therefore, that a person who
had paid P, following a judgment in which she had been held liable, would a
fortiori not be debarred from recovering contribution, even if D2 could
establish that the facts in P v. Dl had been wrongly found, or that Dl had
failed to raise a material legal defence to P's action.

The different wording of contribution legislation in other jurisdictions
whose statutes are based upon the English Law Reform (Married Women
and Tortfeasors) Act, 1935^ diminishes the relevance of decisions in which
courts have had to consider whether, in contribution proceedings brought
by Dl against D2, D2 is able to challenge the findings made against Dl in the
previous litigation that resulted in judgment against Dl in favour of P^ It
would seem that the legislation in these jurisdictions does not enable D2 to
defeat Dl's contribution claim on the basis that Dl is not liable to P or that
the court erred in assessing the quantum of P's loss vis-a-vis Dl, although,
bearing in mind the prevailing test for apportioning liability between
wrongdoers, it has been held that the court may have regard to Dl's conduct
of the litigation with P in determining the amount of contribution to be
awarded. In the Australian case o^ Bitumen and Oil Refineries (Australia)
Ltd. V. Commissioner for Government Transport, ^^ the High Court stated as
follows:"

^ See Rules o{ Civil Procedure, O. Reg. 560/84, r. 29.05(2)(b) and (5), which makes
determinations in the main action binding upon a third party whether or not a
statement of defence to the main action was delivered.

^ [1956] O.R. 328, 2 D.L.R. (2d) 484 (H.C.J.).

^ Law Reform (Married Women and Tortfeasors) Act, 1935, c. 30 (U.K.).

^ In particular, s. 6(1 )(c) of the 1935 Act provided that "any tortfeasor liable in respect of
that damage may recover contribution. . .". It would have been difficult to argue that a
claimant who had been held liable in the action brought against him by P was not
"liable".

(1955),92C.L.R. 200(H.C.).

Ibid., at 212-13. See, also, Inglis Ltd. v. South Shore Sales and Service Ltd. (1978), 31
N.S.R. (2d) 562, 8 C.PC. 58, at 64 (S.C, T.D.), where the defendants to a claim for
contribution were said to be entitled to contest the quantum of damages awarded
against the plaintiff in an eariier action by the injured person to which the defendants in
the contribution action had not been joined as third parties. The decision was reversed
on other grounds: (1979), 31 N.S.R. (2d) 541, 11 C.PC. 127 (S.C, App. Div.).

114

No doubt the Court. . .must accept the assessment [made in proceedings
brought by P against Dl] as conclusive as to the existence and the amount of the
Hability of the plaintiff claiming contribution [Dl]. The Court, however, is
required to find what is just and equitable as an amount of contribution having
regard to the extent of the responsibility for the damage of the tortfeasor against
whom the claim is made [D2]. There does not seem to be any valid reason why
that tortfeasor may not say to the tortfeasor making the claim, if he has
improvidently agreed to pay too large an amount or by unreasonable or
negligent conduct in litigation has incurred or submitted to an excessive
verdict, that the excess is due to his [Dl's] fault and not to that of the tortfeasor
resisting the claim [D2]. It would be a matter for the Court to consider under
the heading of 'just and equitable'.

However, in James P. Cony & Co. Ltd. v. Clarke, ^^ 3. claimant for contribu-
tion was held not to have established that he was a tortfeasor, who was as
such entitled to contribution, merely by proving that he had submitted to a
consent judgment in favour of P and had paid the amount due under it.

Section 29(1) of the Irish Civil Liability Act, 1961 '^ specifically provides
that D2 may not resist Dl's claim "on the ground that the claimant who has
paid the injured person was not liable to such person". However, the section
also provides, among other things, that D2 "may resist the claim on the
ground that he himself is not liable to such person and, for this purpose, may
dispute any question of law or fact even though that question arises also on
the liabihty of the claimant to the injured person; and the contributor may
in the same way dispute the amount of the damage suffered by the injured
person".^"*

There are several arguments in favour of an approach that would make
any finding in P v. Dl binding on D2 in a subsequent contribution action.
First, to the extent that Dl has satisfied the judgment against her, she will
have conferred a benefit upon D2— who, it should be re-emphasized, is
liable to P— by removing or reducing that liability. Secondly, Dl cannot be
said to have benefited D2 officiously, because the payment was made
pursuant to a legal obligation. Thirdly, since D2 will be able to raise against
Dl's claim for contribution any defence that would have enabled her to
defeat or reduce P's claim against her, she is not prejudiced by being bound
by the outcome of litigation to which she was not a party-defendant, or,
indeed, a third party. Finally, to prevent D2 from reopening the issue
decided in P v. Dl is an efficient use of judicial time and public funds, and
since D2 would have had to pay P in any event, she is not substantially
prejudiced by this extension of issue estoppel.

'2 [1967] N.I. 62 (C.A.).

•^ Civil Liability Act, 1961, No. 41.

^^ Reference should also be made to the exception in s. 29(3) of the Act. Section 29(3)
provides that D2 is estopped from "disputing the propriety or amount of the judgment
obtained by the injured person on any question of law or fact common to [Dl's] liability
to the injured person and [D2's] liability to the injured person", if D2 "had knowledge of
an action brought by the injured person against [Dl], and unreasonably failed to make a

115

On the other hand, if D2 is not able to defend Dl's claim for contribu-
tion by establishing that Dl ought not to have been held liable to P in the
original litigation, then she will have been deprived of a defence that she
could have raised if she had been brought into the original action as a party-
defendant or by Dl's service of a third party notice upon her, even though it
might have been legally impossible to join D2 to P's action in either of these
ways. '^

The Commission has recommended in chapter 5 that, if Dl claims
contribution after settling with P, D2 should not be able to defend the claim
on the ground that Dl ought not to have settled because Dl was not liable to
P. The purpose of this recommendation was to encourage settlements.
However, the Commission has come to the conclusion that, in the present
context, such a high value should not necessarily be given to the public
interest in the finality of all issues decided in the litigation between P and Dl.
Rather, subject to one significant exception, we believe in the basic principle
that a person should not be bound by an issue decided in an action to which
she was not a party.

With respect to the existence of Dl's liability to P— the central fact on
which Dl's right to contribution against D2 is predicated— the Commission
favours an approach that would make the earlier finding against Dl conclu-
sive in a subsequent contribution action. We see no policy justification for
permitting D2 to open up the issue of Dl's liability in that action. By
hypothesis, D2 is liable to P. Accordingly, as a general proposition, the
payment of money by Dl in satisfaction of her judgment debt to P confers a
benefit on D2 (although the extent of the benefit depends on the quantum of
P's loss, a matter to which we turn below). It would be unjust, therefore, to
allow D2 to relitigate the issue of Dl's liability. In this respect, then, we
endorse the position taken in the Irish Civil Liability Act, 1961 .

We also wish to adopt the principle enunciated in that Act in respect of
D2's right to prove, in the contribution action, that the court erred in
assessing the quantum of the injured person's loss in Pv. Dl . The Commis-
sion believes that there is an important distinction between relitigating the
issue of Dl's liability to P and relitigating the issue of quantum. As we have
said, since D2 is, by definition, a wrongdoer, she is not prejudiced by being
compelled to accept the fact of Dl's liability. Such is not the case where the
quantum of P's loss is in issue. Here, the inability to contest the earlier

proposal for assisting [Dll in the defence of the action. . .". The reason for this provision
is clear. It is to discourage the multiplicity of proceedings in respect of a single loss,
although precisely what "assisting" in the defence of the action by the injured person is
meant to encompass is not at all clear. It also t)ears mentioning that, under s. 29(3), D2
"shall not be so estopped where the claimant submitted to judgment in fraud of the
contributor".

'^ The complications of the Federal Court Act, S.C. 1970-71-72, c. 1, provide the most
obvious example: see text accompanying note 3, supra. Whether Dl ought to have
known that D2 was a possible concurrent wrongdoer, or whether D2 deliberately
concealed D2's potential liability so that it was not practically possible for D2 to be
joined to P's action, should not be regarded as decisive factors.

116

finding may be of critical importance to D2, who may wish to argue in the
contribution claim that, since P's loss is actually less than that determined in
Pv. Dl , not all of Dl's payment to P has, in fact, benefited D2. Moreover, it
bears emphasizing that, where P's judgment against Dl has not been
satisfied or where P believes that her loss is more than the court held in her
suit against Dl, P may commence an action against D2. In such an action,
the court would have to deal with the quantum of the damage suffered by P,
obviously without reference to the results reached on the same issue in P v.
Dl . Accordingly, the Commission cannot see why that very issue ought not
to be justiciable in the contribution action.

For the reasons advanced above, the Commission recommends that,
where a claim for contribution is made in a legal proceeding independent of
that in which judgment was awarded in favour of the injured person against
the claimant for contribution, it should be no defence for the person against
whom the claim for contribution is made to show that the court erred in
holding the claimant liable to the injured person, except where the judgment
was obtained by collusion or fraud. '^ We further recommend that this
proposal should apply even where the judgment against Dl in favour of P
was on consent. As a matter of principle, in this context we are of the view
that there is no real distinction between a settlement— which, under our
proposals, could not be opened up by D2— and a consent judgment.

However, insofar as the assessment of P's loss is concerned, we recom-
mend that, in the independent contribution action, D2 should be entitled to
show that the court wrongly assessed that loss in the earlier litigation
between P and Dl. •^ Accordingly, the sum to which D2 should be required to
contribute should be determined by the court before which the contribution
claim is made. Its decision will be made on the basis of the evidence
admissible and introduced in that litigation, which, of course, may include
evidence not available in the eariier action between P and Dl. This is
consistent with the principle that, if P herself had sued D2 at this time, such
new evidence would be admissible.

If, in the contribution action, the court assesses P's recoverable loss as
less than the figure determined by the court when P sued Dl, then Dl may be
required to pay a sum that exceeds her due proportion of the common
liability as determined in P. v. Dl . Thus, suppose that in P's action against
Dl, P's damages were found to be $10,000, but that when Dl subsequently
claims contribution from D2, the court finds that the common liability of
the concurrent wrongdoers was only $5,000. If Dl and D2 are found to be
equally responsible for the loss, Dl will recover from D2 only $2,500. This
result flows from a restitutionary analysis of contribution, because D2 will

'^ See the Commission's proposed Contribution and Contributory Fault Act (hereinafter
referred to as "Draft Act"), ss. 8(1) and 14(2). The proposed Act appears as an Appendix
of this Report.

'^ Draft Act, s. 8(1).

117

have been unjustly enriched only to the extent that she has to bear less than
half of the amount for which she was liable to pay P.

D2 will, of course, challenge the amount of the common liability only if
she believes that judgment was given against Dl in P's action for too high a
figure. Suppose, however, that D2 is mistaken, and that the court adjudicat-
ing the contribution claim decides that the common liability is greater than
that found by the court that heard P's action? Assume that judgment had
been entered for P against Dl for $10,000, but in the contribution action the
common liability of the parties was found to be $15,000. Dl may argue that
the contributable sum should be the higher figure. This, after all, was the
sum for which D2 has been held liable, and that Dl's payment to P has
discharged: if Dl and D2 are found to be equally responsible for the loss,
then Dl should recover half of the amount for which D2 has been held liable.

The argument on the other side is that Dl has already had an opportu-
nity to litigate the amount of her liability in the action brought against her by
P. It would not be unfair, therefore, to hold Dl to that determination, not
only against P, but against D2 as well. Dl is not prejudiced by this result
because she will be required to bear a part of the liability, as assessed in the
action in which she was defendant, that is proportionate to her degree of
fault. There is no reason why she should have a second chance of decreasing
her ultimate share by trying to persuade a court that the judgment entered
against her underestimated her liability. She should be no better off than she
would have been if she had served a third party notice on D2 in the action
brought against her by the injured person. Accordingly, the Commission
recommends that the claimant for contribution should be estopped from
asserting that her liability to P was greater than the figure at which it was
assessed in P's action.

Finally, we recommend that, if the judgment in favour of P ordered
specific relief against Dl —such as the delivery of goods or performance of a
service by Dl —the court before which the claim for contribution is brought
should be required to place a value on such delivery or performance in order
to determine the amount of contribution recoverable.'^

3. LIABILITY OF D2 TO P

(a) General

In this section, we shall examine the question whether it should
invariably be a defence to a contribution claim that D2 was never liable to P
for the loss in respect of which Dl has been held liable or has settled.

At one time, the common law doctrine of spousal immunity gave rise to
an example of the contribution consequences of an initial immunity of D2

Ibid., s. 9(7).

118

from an action in tort by P.^^ Thus, if P was injured as a result of the
negligence of her spouse (D2) and a third party (Dl), should Dl be entitled to
obtain contribution from D2 even though D2 could never have been sued
successfully by P?^^ Another example, again now of historical interest only,
was provided by the statutory provision that a gratuitous passenger in a
motor vehicle who was injured in the course of the journey could only sue
the owner or driver of the vehicle if it was established that the defendant had
been guilty of gross negligence.^' If the passenger's injury was caused by the
negligence of a third party and the driver, should the third party be entitled
to claim contribution from the negligent driver, even though the latter's
conduct could not be characterized as so grossly negligent as to expose her to
liability to the passenger?^^

The Legislature has removed these problems by making the necessary
reforms in the defective state of the law of primary obligation from which
they arose. However, other statutory protections from liability still exist.
One of the most important is contained in the Workers' Compensation
ActP which protects an employer from liability in tort to an employee who

The doctrine of spousal immunity to actions in tort has been abolished: Family Law
Act, 1986, S.O. 1986, c. 4, s. 64(2). See, also, infra, note 20.

In fact, s. 2(4) of the Ontario Negligence Act, R.S.O. 1970, c. 296, dealt with this
problem by reducing the amount of damages recoverable by the injured person from the
third party by an amount proportionate to the fault of the spouse whom the plaintiff
could not sue. There was thus no need for any contribution claim against the wrong-
doing, but immune, spouse. This section was repealed when spousal immunity was
abolished in 1975: The Family Law Reform Act, 1975, S.O. 1975, c. 41, s. 7.

The Highway Traffic Act, R.S.O. 1970, c. 202, s. 132(3). The much criticized limitation
upon the injured person's right of recovery was repealed by The Highway Traffic
Amendment Act, 1977 (No. 3), S.O. 1977, c. 54, s. 16(1).

22 Again, s. 2(2) and (3) of the Ontario Negligence Act, R.S.O. 1970, c. 296, "solved" the
problem by reducing the damages otherwise recoverable by the injured person from the
driver of the other vehicle by an amount proportionate to the fault or neglect of the
immune driver of the vehicle in which the injured person was being carried. Section 1(2)
of The Negligence Amendment Act, 1977, S.O. 1977, c. 59, repealed this restriction upon
the in solidum liability principle when the requirement that the guest or passenger must
establish gross negligence on the part of the host was abolished.

The repealed si2^.u\QS-The Highway Traffic Act, R.S.O. 1937, c. 288, s. 47(2), and
The Negligence Act , R.S.O. 1937, c. 115, s. 2(2)— had been described as "two of the most
vicious pieces of legislation which an active insurance lobby was able to foist on an
unsuspecting public": Anon., "Motor Cars and Gratuitous Passengers— Statutory
Exemption from Liability of Car Owner Qua Owner— Liability as Master for Driver's
Negligence" (1945), 23 Can. B. Rev. 344, at 347. This distaste was also shared to an
extent by the courts, which were prepared to give the statutes a tortuous interpretation
in order to limit the injustice that they were capable of causing: see Weiler, "Groping
Towards a Canadian Tort Law: The Role of the Supreme Court of Canada" (1971), 21 U.
Toronto L.J. 267, at 288-92, and Linden, Canadian Tort Law (1977), at 515-26.

For one of the last reported cases illustrating the operation of these provisions, see
Bates V. Illerburn (1976), 12 O.R. (2d) 721, 70 D.L.R. (3d) 154 (C.A.).

2^ R.S.O. 1980, c. 539, s. 8(9). The Act contains a scheme of statutory benefits, and, to that
extent, eliminates claims in tort against the employer of the injured worker in respect of
injuries sustained in the course of the employee's employment.

119

has been injured in the course of her employment. If the employee's injury
has been caused by the negligence of the employer and of a third party (the
manufacturer of a defective tool with which the employee was working, for
example), should the employer be able to defeat the third party's contribu-
tion claim by relying upon the employer's immunity to suit by the
employee?^'^

Other contemporary illustrations of this problem are provided by a
common law defence that D2, but not Dl, may have against P. Suppose, for
instance, that the promoters (D2) of a sporting event have, by the conditions
of admission, successfully excluded their liability for injuries sustained by
spectators as a result of D2's negligence. A spectator (P) is injured as a result
of the negligence of one of the participants (Dl) and the inadequate safety
precautions taken by D2. If P successfully sues Dl in negligence for her
injuries, should Dl have a right of contribution from D2, even though D2
had contractually exempted herself from liability to P? If the Commission's
recommendation is adopted that a right of contribution may arise between
parties whose liability to the injured person arose from an alleged breach of
contract, then the relevance to the contribution claim of an exemption
clause in the contract between P and D2 is likely to assume considerable
practical significance.

A variation on the examples considered above is provided by the
existence of a partial defence that may be available to D2, but not to Dl,
against the injured person. For example, D2's liability to P may be reduced
because P was contributorily negligent vis-a-vis D2, a defence that will not
necessarily be available against all other concurrent wrongdoers.^^ Alterna-
tively, a term in the contract between D2 and P may limit the damages
recoverable by P for a breach by D2 to a sum less than the amount that
would otherwise have been recovered by P. Should either of these limitations
on D2's liability to P be relevant to a claim for contribution made by Dl
against D2?

^'^ The Ontario Legislature has once more foreseen the contribution consequences of the
employer's immunity and has adopted a solution identical with that found in the
repealed provision of the Negligence Act, dxscusstd supra, note 22. Section 8(11) and ( 12)
of the Workers' Compensation Act, supra, note 23, reduces the damages recoverable by
the employee from the third party by the amount otherwise attributable to the
employer, at least to the extent that the damages payable by the third party would have
exceeded the statutory benefits recoverable by the employee.

For a recent survey of the variety of solutions to this problem that have been
adopted in the United States, see Larson, "Third-Party Action Over Against Workers'
Compensation Employer", [1982] Duke L.J. 483, at 484, where the issue is described as
"the most evenly-balanced controversy in all of workers' compensation law".

^^ Contributory negligence is generally not considered to be a defence to a claim for
damages for breach of contract, at least where the conduct cannot also be characleri/ed
as a tort. If it were, the problem raised in the text would be less likely to arise. See text
accompanying note 72, infra. See, further, chapter 10 of this Report.

120

The concept of unjust enrichment upon which the law of restitution is
based has been used so far in this Report as the principal organizing concept
around which various aspects of the right of contribution among wrong-
doers have been examined. Applying the same principle to the problems
considered in this section would lead to the conclusion that if D2 always had
a complete defence to an action brought by P, then this should inevitably
defeat Dl's claim for contribution. The reason for this is that if D2 was never
liable to P, then any payment made to P by Dl in respect of P's loss conferred
no benefit upon D2 because no liability owed by D2 was thereby discharged.
On this reasoning, the precise nature of D2's defence to P's claim is
irrelevant: it should make no difference whether the immunity arose from a
contractual exemption clause, a defence based upon the conduct of the
injured party (such as assumption of risk), or a statutory protection from
liability. We have assumed that the fact that Dl has satisfied P's claim in full
does not constitute a benefit to D2, even though it provides an additional
reason why P would not institute proceedings against D2, which in any
event would, ex hypothesi, not succeed.

Similar reasoning would apply if D2 has a partial defence, whether by
virtue of P's contributory negligence or a limited liability clause. Arguably,
Dl should not be able to claim from D2 by way of contribution a sum greater
than that for which D2 could be held liable to P. Payment by Dl to P can only
benefit D2 up to the amount for which D2 could have been successfully
sued by P.

Matters may not, however, be quite this simple, particularly when the
source of D2's immunity from suit by, or limited liability to, P is an
exemption or limited liability clause in a contract. It can be argued that it is
unfair to Dl that her prima facie right to claim contribution from a person
whose wrongful conduct has contributed to P's loss should be jeopardized by
a term in a contract to which Dl was not a party. While the cost to P of the
contractual exemption may be reflected elsewhere in the contract with D2,
Dl can in no sense be said to have purchased D2's immunity from liability to
her. The argument might be put in a restitutionary framework by stating
that D2's immunity is certainly a benefit conferred at Dl's expense, but it has
been conferred by P, who should therefore pay for it by a reduction in the
damages that she can recover against Dl. Indeed, this approach to the
problem has found favour with the Ontario Legislature in some situations
where D2 enjoyed an immunity as a result of the operation of a rule of
common law or statute.^^

These two ways of analyzing the consequences of the immunity from or
limitation upon the liability of D2 to P permeate the concern to determine
how a single loss, suffered by one party as a result of the concurrent wrongs
of two or more other persons, should be distributed among them. As we
have already had cause to note, the resolution of the problem ultimately
depends upon some important policy choices and priorities.

^^ See supra, notes 20, 22, and 24.

121

(b) The Present Law

Section 2 of the Negligence Act^'^ currently provides that "[w]here
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 that the liability of such persons shall be
apportioned by contribution or indemnity "in the degree in which they are
respectively found to be at fault or negligent''. Before an amendment made
to the Act in 1935,^^ the section provided that contribution was available
among those "found jointly and severally liable". Despite the apparent
abandonment of the statutory requirement that a person from whom
contribution is claimed must have been found liable, the courts have
consistently held that a person who could at no time have been held legally
liable for the loss sustained by the injured person is not liable under the
Negligence Act to pay contribution.

In two cases decided before 1935, it was held that there was no right of
contribution against a person whose careless conduct had undoubtedly
caused the plaintiff's injury, because the person from whom contribution
was claimed could not have been sued successfully by the claimant for
contribution. In Macklin v. Young, ^^ a claim for contribution was denied
because of D2's common law defence of spousal immunity from suit by the
injured person. A similar result was reached in Wilson v. Hamilton Hydro-
Electric Commission,^^ where P's cause of action against D2 was barred by
the The Workmen's Compensation Act ?^

The deletion of the word "liable" from the Negligence Act in 1935 made
it possible to argue that a person was required to contribute if her fault or
neglect was a cause of P's injury, even though she could not be held liable to
P in legal proceedings by virtue of a common law or statutory immunity
Nonetheless, in the overwhelming majority of cases, the courts have contin-
ued to hold that the liability of D2 to P is a necessary condition to Dl's right
of contribution. ^2 Indeed, since section 2 provides that those found to be at
fault or negligent are jointly and severally liable to the plaintiff, this is a

2^ Negligence Act, R.S.O. 1980, c. 315.

^^ S.O. 1935, c. 46.

2^ [1933] S.C.R. 603. See, also, McDonald v. Adams {1932), 41 O.W.N. 145 (C.A.), and Bird
V. Armstrong, [1950] 4 D.L.R. 824 (N.B.S.C, App. Div.), at 846. Similar results were
reached in other Commonwealth jurisdictions: see, for example, C^hant v. Read, [1939] 2
K.B. 346; Drinkwater v. Kimher, [1952] 2 Q.B. 281 (C.A.); Walsh v. Fair weather, [1937]
N.Z.L.R. 855 (S.C); and Murphy v. Colhron (1956), 73 N.S. W.W.N. 468 (S.C).

^^ (1930), 40 O.W.N. 545, [1932] 3 D.L.R. 799 (H.C.J. ). Lappin v. Morrison (1932), 41
O.W.N. 104 (H.C.J.) is one of the very few cases decided the other way.

^^ R.S.O. 1927, c. 179.

^^ See Cheifetz, supra, note 4, at 37-41.

122

reasonable conclusion. Thus, in Cohen v. S. McCord & Co. Ltd.,^^ Laidlaw
J.A. said:

'Where two or more persons are found at fault or negligent'. . .does not change
the construction which ought to be put on the enactment. Liability of two or
more persons continues to be a condition precedent to the right of contribution
and indemnity created by the statute.

This approach has been applied in cases where the Workers' Compensation
Act excluded the liability to P of D2.34

It has also been held that the words "fault or neglect" are limited to
breach of a legal duty that exposed D2 to a potentially successful suit by P.
Thus, in Cowle and Cowle v. Filion,^^ a claim for contribution against the
parent of a child (D2) who had been injured by Dl failed because Dl was
unable to establish that D2 had been in breach of any legal duty of care owed
to the child. A mere failure by D2 to discharge properly the moral obligation
of parents to protect their child from injury was an insufficient basis upon
which to build a claim for contribution.

The Supreme Court of Canada has affirmed that P's ability to recover
damages from D2 is a condition precedent to a successful claim by Dl for
contribution under the Negligence Act. In Giffels Associates Ltd. v. Eastern
Construction Co. Ltd.,^^ a case in which a contractual exemption clause
rendered D2 immune from liability at the instance of P, Laskin C.J.C. said:^^

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.

Giffels thus appears to have put the proper interpretation of this aspect of
the Negligence Act beyond doubt. In addition, if there is at common law a

■^^ Supra, note 2, at 580.

^"^ Sinkevitch and Beaudoin v. Canadian Pacific Railway Co., [19541 O.W.N. 21 (H.C.J.).
An amendment to what is now the Workers' Compensation Act, supra, note 23, reversed
an earlier holding to the contrary in Healy v. Runny mede Iron and Steel Co. , [19411 0.R.
133, [19411 3 D.L.R. 325 (C.A.).

^^ [1956] O.W.N. 881, 6 D.L.R. (2d) 258 (Co. Ct.). Compare Peter v. Anchor Transit Ltd.
and Turner (1979), 100 D.L.R. (3d) 37, [1979] 4 W.W.R. 150 (B.C.C.A.), where a claim
for contribution succeeded because the parent was held to have been in breach of a legal
duty of care owed to the child. See, also, Arnold v. Teno, [1978] 2 S.C.R. 287, 83 D.L.R.
(3d) 609.

^^ [1978] 2 S.C.R. 1346, 84 D.L.R. (3d) 344 (subsequent reference is to [1978] 2 S.C.R.).
See, also, Armak Chemicals Ltd. v. Canadian National Railway Co. (1980), 29 O.R. (2d)
259, 112 D.L.R. (3d) 560 (C.A.).

^"^ Supra, note 36, at 1354.

123

right of contribution among concurrent contract breakers who cause a
single loss to the plaintiff— a point left open by the Supreme Court— it is
probable that D2 would be able to rely upon an exemption clause in her
contract with P in order to defeat Dl's claim for contribution.

One other possibiHty should, however, be considered. Professor Glan-
ville Williams, who regarded the courts' interpretation of the Negligence Act
as unjust, has argued that the law of tort may, in some circumstances,
provide Dl with a way of distributing to D2 part of the damages for which Dl
was liable to P^^ He argues that, even though D2 may have excluded by
contract her liability to P, D2 may still be under a duty of care to Dl, a duty
that can include an obligation not to expose Dl negligently to a liability to P
for which Dl is unable to claim contribution from D2. Dl may thus be able to
claim as tortious damages whatever she had been required to pay P, less an
amount that represents Dl's proportionate fault. In such a case, a question
might arise about the scope of the exemption clause in the contract between
D2 and P. If it was drafted so as to exempt D2 from liability to P and to
indemnify D2 with respect to any other claim that might be made against
her arising from P's loss, then P would be required to indemnify D2 for the
sum that D2 had been held hable to pay Dl. P would thus not be able to
retain the full amount of the damages recovered from Dl.^^

This possible method of redistributing to P the loss attributable to D2's
wrongful conduct for which she could not be sued by P rests upon the law of
tort, and will not be explored further in this chapter. The abolition of
spousal immunity and of the requirement that gratuitous passengers could
only recover from their driver if the latter were shown to be grossly negligent
removed the principal sources of difficulty in this area of the law. The
statutory bar provided by the Workers' Compensation Act will be discussed
briefly below although, since this is an integral part of a special statutory
regime of compensation, it would be inappropriate to make recommenda-
tions for its reform in this Report.

It is in the context of contractual exemptions or limitations of liability
that the present law is likely to be most strenuously challenged, particularly,
of course, if a statutory right to contribution is extended so that it includes
all concurrent wrongdoers. Accordingly, this is the problem to which the
remainder of this chapter principally addresses itself.

^^ Williams, Joint Torts and Contributory Negligence (1951), at 1 15 and 425.

^^ This argument is based upon an analogy with The Cairnbahn, [1914] P. 25 (C.A.), a
decision of the English Court of Appeal interpreting the Maritime Conventions Act,
1911 , c. 57, s. 3( 1). Williams argues that if Dl can establish a duty of care owed to him by
D2 in accordance with general principles of the tort of negligence, and a breach of that
duty, it should be irrelevant whether Dl has also suffered physical injury as a result of
D2's negligence or whether Dl's only damage is the economic loss involved in his having
been held liable to compensate P for P's injuries.

124

As long as the law allows parties to contract out of or limit their liability,
or statutes exempt wrongdoers from liability, there would seem to be three
principal methods of dealing with the contribution consequences.

(i) No Change in the Law

One possibility is to regard the present law as satisfactory and not in
need of reform. Some of its strengths have already been indicated. The first
is that it is consistent with the notion that the law of contribution is
restitutionary in nature, and that rights of restitution are generally granted
only for the purpose of preventing one person from retaining, without
payment, a benefit conferred upon her by another in circumstances where
the recipient of the benefit would thereby be unjustly enriched at the
expense of the person who conferred it. Since Dl's payment to P did not
discharge a liability owed by D2 to P, D2 received no benefit from P's
payment, and should therefore not be required to pay contribution. The fact
that Dl's payment to P may have persuaded P not to launch proceedings
against D2— which, in any event, could not have resulted in a judgment
against D2 in P's favour— does not constitute a "benefit" the conferral of
which could support a restitutionary claim for contribution.

Secondly, to prevent Dl from passing on to D2 any of the liability for the
payment made to satisfy P's claim is not necessarily unjust to Dl: for one
thing, Dl would have been liable in the same amount if she alone had caused
P's loss, and for another, there is no reason why Dl should benefit from the
existence of a stipulation in the contract between P and D2 for which D2
bargained with P. The price of the exemption clause may well be reflected
elsewhere in the terms of the contract between P and D2; to allow Dl to
claim contribution from D2 would be to give Dl a benefit for which she has
paid nothing.

Thirdly, to allow the injured person to recover fully from the non-
immune defendant, while protecting the immune defendant from suit, is
consistent with one of the policies underlying a right to contribution,
namely, that the plaintiff should not be able arbitrarily to select how a single
loss should be distributed between two wrongdoers, against both of whom
she had a cause of action.

A number of recent reforms of the law of contribution among wrong-
doers appear to have retained the requirement that contribution may be
claimed only if D2 was, at the time when P suffered the loss, at least
potentially liable for it. Thus, section 1(1) of the English Civil Liability
(Contribution) Act 197 S'^^ provides that a claim for contribution may be

Civil Liability (Contribution) Act 1978, c. 47 (U.K.).

125

made against any person who is or would if sued have been "liable in respect
of the same damage". It would seem clear that this section was not intended
to change the construction of the former legislation, the Law Reform
(Married Women and Tortfeasors) Act, 1935, "^^ which made D2's liability to
P a condition precedent to a successful claim for contribution by DL^^^ The
1978 Act does, as we shall see, modify the rule that Dl's claim to contribution
is barred if D2 ceases to be liable to P after the damage has occurred. Indeed,
the express provision in section 1(3) that a person shall be liable to make
contribution "notwithstanding that he has ceased to be liable in respect of
the damage in question since the time when the damage occurred" clearly
assumes that there is no liability to contribute if D2 was at no time liable for
the damage suffered by the injured person.^^

Section 4(a) of the American Uniform Comparative Fault Acf*"* limits
liability for contribution claims to those "who are jointly and severally liable
upon the same indivisible claim for the same injury, death, or losses,
whether or not judgment has been recovered against all or any of them".
Again, there seems little doubt that it would be a defence under this Act for
D2 to establish that she was not and never had been liable to P, in the sense
that P could never have obtained judgment against D2 for the loss in respect
of which Dl has been held liable to, or has settled with, P.

The Report of the Alberta Institute of Law Research and Reform'*^
does not expressly consider whether D2's potential liability to P should
always be required before D2 can be held liable to contribute to Dl, but the
discussion of the effect upon contribution of at least one factor that has
caused D2 to cease to be liable to P certainly implies that, unless D2 had
been liable to P at some time, contribution cannot be claimed from her."^^
Section 10 of the draft statute appended to the Report states as a basic
principle that "a concurrent wrongdoer is entitled to contribution from any
other concurrent wrongdoer". Section 1(a) defines "concurrent wrong-
doers" as persons whose wrongful acts contributed to the same damage and

Supra, note?.

^^ It is implicit in all the judgments in George Wimpey & Co. Ltd. v. British Overseas
Airways Corp. , [1955] A.C. 169, [1954] 3 All E.R. 661 (H.L.) that there was no liability to
contribute if D2 could never have been successfully sued by P.

'*^ The English Law Commission's Report does not even discuss this issue: Law of
Contract: Report on Contribution, Law Com. No. 79 (1977). However, in its Working
Paper {Contribution, Working Paper No. 59 (1975), para. 34, at 21), the Commission
rejected the philosophy of the Irish Civil Liability Act, 1961, supra, note 13, which here,
and elsewhere, throws the burden of D2's defence upon P by reducing the amount of
damages that she can recover from Dl.

^^ National Conference of Commissioners on Uniform State Laws, Uniform Comparative
Fault Act, Uniform Laws Annotated, Vol. 12 (1987 Pocket Part). The Act was approved
by the Commissioners in 1977.

^^ Alberta, Institute of Law Research and Reform, Contributory Negligence and Concur-
rent Wrongdoers, Report No. 31 (1979).

^^ Ibid., sii 62 etseg.

126

any other person liable for the wrongful act of any of those persons.
Although these provisions do not, perhaps, put the matter beyond all
argument, it would seem tolerably clear that they were not intended to
extend liability to pay contribution to those who were never legally liable to
the injured person. This interpretation is supported by section 11(2), which
provides that a person whose liability to the injured person is limited by
contract or statute cannot be required to pay contribution to Dl in excess of
this sum. It would be extremely odd to give to D2 the benefit in contribution
proceedings of a partial defence that she always enjoyed against P, but to
deny D2 the benefit of a total defence.

The Law Reform Committee of South Australia has examined the
problem, and has concluded that it is right to retain the present conse-
quences for the law of contribution that flow from the fact that one of the
"wrongdoers" has negotiated an exemption or limited liability clause with
the injured person:^^

The Committee recognises that clauses limiting or excluding liability for breach
of contract generally form part of carefully considered commercial agreements
which are entitled to considerable respect and agrees with the principle. . .that
the liability to contribute should not exceed the limits on liability established by
prior contract or agreement between the plaintiff and a defendant.

(ii) Reduction of Damages of Injured Person

A different approach has been taken in the Uniform Contributory Fault
Act, adopted by the Uniform Law Conference of Canada.^^ This Act
provides that the damages recoverable by the injured party are reduced by
the share of the responsibility that would otherwise have been borne by the
concurrent wrongdoer whom the injured person cannot sue because of a
clause in an agreement that excludes her liability to pay damages.'*^ This
approach of apportioning to the injured person the part of the loss that D2
would have had to bear vis-d-vis Dl if there had been no exemption clause in
the contract between P and D2, had earlier been taken in South Africa^^ and
Ireland. The origin of the relevant section of the Irish Civil Liability Act,

'^'^ Law Reform CommiUee of South Australia, Forty-Second Report of the Law Reform
Committee of South Australia to the Attorney-General— Relating to Proceedings Against
and Contributions Between Tortfeasors and Other Defendants (1977), at 12.

Uniform Law Conference of Canada, Proceedings of the Sixty-Sixth Annual Meeting
(1984), Appendix F, Uniform Contributory Fault Act. See ss. 1(d) and 12(1) and (2).
Section 11 provides for a similar solution in those instances of statutory exemptions
from liability that provincial legislatures wish to include (for example, exemptions
under workers' compensation legislation).

See, further, text following note 58, infra.

See the South Africa Apportionment of Damages Act, 1956, 1956 S.S.A., No. 34, s. 2(10).

127

1961 ,^' section 35(1)(0, is a proposal by Professor Glanville Williams.^^ x^e
section provides that

where the plaintiff's damage was caused by two or more persons and such
persons would have been concurrent wrongdoers were it not for a contract by
the plaintiff with one of such persons before the occurrence of the damage
exempting that person from liability the plaintiff shall be deemed to be
responsible for the acts of that person.

The attraction of this solution is that the injured party is made to pay
for the presumed benefit that she has obtained by entering into a contract
with an exemption clause. If the parties bargained from positions of rela-
tively equal strength, then the injured party could be expected to have
obtained the goods or services more cheaply than would have been the case
had the supplier not excluded her contractual liability. To allow P both to
recover in full from Dl (who cannot redistribute any of the loss to D2), and
to have obtained D2's contractual performance at a discount is, it may be
argued, to let P have her cake and eat it too.

Another advantage claimed for this solution is that it does not alto-
gether deprive the plaintiff of the benefit of the existence of Dl, who will
normally be liable for at least part of the loss. Thus, if P's loss is $1,000, for
which Dl and D2 would have been Hable if D2 had not excluded her liability,
then, on the assumption that inter se Dl and D2 would otherwise have
borne it equally, P will recover $500 from Dl. Dl also benefits from the
presence of D2, because the hability that Dl would have had to bear if she
had been the only "wrongdoer" is reduced by the amount that D2 would
have had to pay if D2 had not bargained with P for her exemption from
liability.

(iii) Exemption Clause No Defence to Contribution Claim

The converse of the present law has apparently been adopted in West
Germany, which limits the effect of the exemption clause to the parties to
the contract.^^ The result is that in proceedings by P against D2, the

^' Supra, note 13.

^2 Williams, supra, note 38, at 115, and Williams' Draft Bill, s. 25(1), ibid., at 518. See, also,
Larson, "A Problem in Contribution: The Tortfeasor with an Individual Defense
Against the Injured Party", [1940] Wis. L. Rev. 467, where the author states that, "where
one tortfeasor has acquired the defense of assumption of risk as against the plaintiff, the
plaintiff's recovery should simply be diminished by the amount of that tortfeasor's
contributive share" {ibid., at 499-500).

^^ See Weir, Int'l Enc. Comp. L. XI Torts (1983), ch. 12 (Complex Liabilities), at 52. This
was also the view adopted by Lerner J. at first instance in Dominion Chain Co. Ltd. v.
Eastern Construction Co. Ltd. (1974), 3 O.R. (2d) 481 (H.C.J.), at 504-05, and supported
by Cheifetz, "Recent Developments under the Ontario Negligence Act" (1977), 25
Chitty's L.J. 145, at 148 et seq. This decision was subsequently reversed by the Ontario
Court of Appeal ((1976), 12 O.R. (2d) 201 (C.A.)), whose decision was affirmed by the

128

exemption clause provides D2 with an absolute defence, but its existence is
ignored in a claim for contribution made against D2 by Dl. This approach is
based on the notions that it is unfair to Dl that a clause in a contract between
P and D2, to which Dl was not a party, should destroy the right to
contribution that Dl would otherwise have had against D2, and that P
should benefit in full from the presence of Dl, a wrongdoer who had not
been exempted from liability to P.

(d) Conclusions

(i) Contractual Defences to Claims for Contribution

The Commission has concluded that, in the context of contractual
defences to claims for contribution, neither the Irish Act's solution nor that
adopted in West Germany provides a sufficient justification for modifying
the principles that the plaintiff should not be prevented from recovering in
full against one wrongdoer because of the existence of another, and that a
person who could never have been held liable to P should not be made
indirectly liable for the injured person's loss by being exposed to a claim for
contribution. Both solutions are based upon a somewhat nebulous notion of
"fairness" between Dl and D2, which runs counter to the more principled
concept of unjust enrichment that underlies the restitutionary framework
within which contribution is most easily accommodated. The price at which
each scheme is prepared to purchase "fairness" is, in our view, unacceptably
high.

a. Exemption Clauses

Two more specific objections may be raised against adopting, in the
context of exemption clauses, a solution similar to that in the Irish Act,
which, in effect, identifies the injured person with the "wrong" of D2 for
which D2 cannot be sued by P. First, if we presume that P has given value for
the exemption clause in order to obtain the goods or services supplied by D2
at a cheaper price than she would have otherwise had to pay, it is difficult to
see why the price paid by P should be increased, beyond that for which P
bargained with D2, by reducing the value of P's right of recovery against Dl.
If Dl wished to reduce or ehminate her liability to P, she, too, could have
made a bargain with P in which she could have offered P some benefit in
return for Dl's immunity from liability.

Supreme Court of Canada in Giffels Associates Ltd. v. Eastern Construction Co. Ltd.,
supra, note 36.

As was suggested supra, this ch., sec. 3(b), there may already be situations where
Dl could establish an action in tort against D2 and allege that her loss (including the sum
in which Dl was liable to P and which Dl cannot recover by way of contribution), was a
foreseeable consequence of D2's breach of a duty of care owed to Dl.

129

Secondly, to analyze exemption clauses in terms of truly consensual
bargaining is often totally unrealistic. The injured person may well not have
fully appreciated the meaning and consequences of the exemption clause,
nor may she have had any genuine opportunity to "bargain". Exemption
clauses are often contained in "take it or leave it" standard form contracts,
which are accepted by consumers who do not possess the necessary skills or
time to "shop around" or to bargain for better terms. Viewed in this light, a
decision to extend the effects of exemption clauses so as to reduce the
injured person's rights against those who have wrongfully caused her loss,
but with whom she has not agreed, even in a legally formal sense, to accept
the exemption clause, seems quite retrogressive. It would be somewhat
ironic if a reformed contribution statute were to add a new dimension to the
effect of exemption clauses at a time when their operation between the
parties to the contracts in which they are contained has given rise to critical
comment. ^"^ It is far from clear why Dl should obtain a windfall in the form
of a reduction of her liability to P.

The suggestion that the exemption clause should be disregarded in
contribution claims is also open to the objection that it replaces restitution-
ary principles with a vague notion of fairness. Admittedly, this proposal, in
attempting to solve a perceived unfairness in the way that the secondary
rights and obligations of Dl and D2 are worked out, does not reduce the
plaintiff's right to recover from Dl the full amount of her loss. It does,
however, deprive D2 of the substance of her bargain with P by subjecting her
to a potential liability to pay Dl a sum that might be 100 percent of P's
recoverable loss. It seems unjustifiable indirectly to set aside a contract and
to give Dl a windfall for which she had not paid. Accordingly, the Commis-
sion recommends that a person who, because of the existence of an exemp-
tion clause contained in a contract made with the injured person, could at
no time have been successfully sued by the injured person should not be
liable to pay contribution to another person in respect of the injured
person's loss.^^

b. Limited Liability Clauses

The existence of a contractual limitation upon the liability of one
wrongdoer (D2) to compensate the injured party (P) produces difficulties in
adjusting the contribution rights of Dl and D2 similar to those that arise
when an exemption clause gives D2 a complete defence against P There is,
however, an important difference: because D2 has only a partial defence

^"^ See, for example, the Commission's Report on Consumer Warranties and Guarantees in
the Sale of Goods (1972), at 49, and its Report on Sale of Goods (1979), Vol. 1, at 227-34.
See, also, the Unfair Contract Terms Act 1977, c. 50 (U.K.).

^5 Draft Act, s. 14(l)(a). It will be noted that s. 14(l)(a) is not limited to exemption clauses.
Although, as indicated above, the issue arises primarily in the context of contractual
exemptions of liability, the Commission is of the view that it should be a defence to a
contribution claim that D2 could not, for any reason, be held liable to the injured
person.

130

against P's claim for all the loss that she would have recovered had there
been no limitation upon D2's liability, any payment made by Dl to P in
respect of the loss will reduce or discharge D2's liability to P, and thus will
have conferred a benefit upon D2. One of the essential elements for a
restitutionary claim will therefore be present, and it is not disputed that D2
should be required to pay contribution up to the amount specified in the
limited hability clause.

There are two issues that should be addressed here. The first concerns
the apportionment among P, Dl, and D2 of that amount of P's loss that
exceeds D2's contractually limited liability. If this issue is dealt with in a
manner similar to that proposed for total exemption clauses, then a second
question will arise. This concerns the method of calculating the sum, up to
the ceiling imposed by the limited liability clause, to which D2 should be
required to contribute.

The arguments on the apportionment of any loss over and above the
figure to which D2 had limited her liability are identical to those already
considered in the case of a contract that effectively excludes D2's liability
altogether. Thus, the present law, despite the absence of authority, would
seem clearly to prevent D2 from having to pay to Dl a sum greater than that
for which P could have successfully sued D2. Section 2(3) of the English
Civil Liability (Contribution) Act 1978^^ expressly provides that where the
damages payable by D2 to an injured person are "subject to any limit
imposed. . .by [an] agreement made before the damage occurred", D2 shall
not be required to pay by way of contribution a sum that exceeds the
amount so stipulated. A similar recommendation has been made in the
Report of the Alberta Institute of Law Research and Reform.^^

The Canadian Uniform Contributory Fault Act^^ does not deal with this
issue discretely. Section 12(2) provides that, following a release of one
concurrent wrongdoer, the damages recovered by the injured person from
another are to be reduced to the amount attributable to the fault of the
person sued. This provision seems to apply to a contractually hmited
liability: section 12(1) states that section 12(2) applies to a release entered into
before or after the injured person's damage occurred, and section 1 defines a
"release" to include "a settlement or any other agreement limiting the
liability of a person for damages, either in whole or in part".

The effect of the Act would thus seem similar to that produced by the
Irish Civil Liability Act, 1961 , which, consistent with its approach to total
exemption clauses, identifies P with the amount of the loss she is prevented

^^ Supra, note 40.

^^ Supra, note 45, at 72-73, Recommendation 15. See, also. The Law Reform Commission
of Hong Kong, Report on the Law Relating to Contribution Between Wrongdoers, Topic
5 (1984), at 37-39.

^^ 5w/7ra, note 48.

131

from recovering from D2 by virtue of D2's contractually limited liability.
Thus, section 35(l)(g) of the Irish Act provides that

where the plaintiff's damage was caused by concurrent wrongdoers and before
the occurrence of the damage the liability of one of such wrongdoers was
limited by contract with the plaintiffs to a sum less than that wrongdoer's just
share of Uability between himself and the other wrongdoer as determined under
section 21 apart from such contract, the plaintiff shall be deemed to be
responsible for the acts of that wrongdoer.

The operation of this provision can be illustrated as follows. Suppose that P
has suffered a loss of $1,000 as a result of breaches of separate contracts by
Dl and D2. Dl and D2 are equally at fault, but the contract broken by D2
Hmits D2's liability to P to $400. If P sues Dl who is found liable for the loss,
judgment will be entered against Dl for $900: this figure is reached by
subtracting from P's total loss the amount that Dl will be unable to recover
by way of contribution from D2 because of the limited liability clause.

A third possibility, of course, would be to allow D2 to rely upon her
hmited liability in any action brought against her by the injured person, but
not in a contribution claim by Dl.^^

The Commission prefers the first solution, which probably represents
the present law, for reasons identical to those canvassed in the context of
exemption clauses. It is recommended, therefore, that the existence of a
Hmited liability clause should not reduce the damages recoverable by P from
Dl, and should enable D2 to use it to fix the maximum sum that D2 can be
required to pay by way of contribution to Dl.

As indicated, the second issue that arises when the person from whom
contribution is sought h^s<i partial defence to the injured person concerns
the method of calculating the amount of D2's contribution. If D2 is liable to
contribute only up to the amount of her contractually limited liability, how
should the sum to which D2 is required to contribute be calculated? There
seem to be three principal alternatives.

First, in calculating the liability to contribute of the wrongdoer (D2)
whose Uability to P is limited, the existence of the limitation could be
ignored until a sum is claimed by Dl that is in excess of D2's liability to P
D2's liability to contribute would then be reduced to the contractual
maximum, and any excess over that amount would be borne by Dl. Thus,
suppose that P has suffered a loss of $1,500 for which Dl and D2 are both
liable and, inter se, equally responsible, but that D2's liability to P is
contractually limited to $500. Under this proposal, the first step is to
calculate DVs prima facie entitlement to contribution. On these facts it will
be $750, that is, the damage caused by the wrongful conduct of Dl and D2
distributed between them in proportion to their respective degrees of fault.

5^ Draft Act, s. 9(4)(b).

132

The second step is to see whether the resuhing Hability of D2 exceeds the
sum for which she is liable to P. If it does, as is the case here, it must be
reduced to that amount. The difference is then reallocated to Dl. The extra
$250 is thus borne by Dl alone: Dl bears $1,000 and D2, $500. The effect of
D2's limited liability clause under this proposal is, therefore, that Dl cannot
recover by way of contribution the $250 to which she would have been
entitled if there had been no limited liability clause in favour of D2 in the
contract between D2 and P.

If the hypothetical were changed, so that P's loss is only $400, then, if
Dl is held liable for this sum, she is entitled to a contribution from D2 in the
amount of $200. Suppose, though, that P's loss was $750. The solution
advanced here would entitle Dl to recover from D2 a contribution of $375.
This result is fair if the most important consideration is that Dl and D2
should bear the loss according to their respective degrees of fault up to the
maximum of D2's liability to P.

This solution was favoured by the English Law Commissions^ and by
the Alberta Institute of Law Research and Reform.^' However, neither the
English Civil Liability (Contribution) Act 1978^^ nor the Canadian Uniform
Contributory Fault Act^^ contains an express provision to this effect, per-
haps because it was thought to be the law already. ^"^

The objection to this method of distributing the loss between Dl and
D2 is that where P's loss is more than the contractual limit of D2's liability, it
requires D2 to bear a portion oiher liability ($500 maximum) that exceeds
her share of fault (50 percent). For example, where P's loss is $750, D2
would be required to pay $375— less than her $500 maximum but more
than 50 percent of that maximum amount. It may be noted that a similar
objection was disregarded by the Supreme Court of Canada in a rather
different context. In Burkhardt v. Beder,^^ the plaintiff claimed $20,000 in
general damages from the defendant in an action brought under The Fatal
Accidents Actf'^ The jury found the defendant Hable and the deceased 50
percent contributorily negligent. The jury assessed general damages at
$26,000 and the trial judge entered judgment for the plaintiff for $13,000,

^^ See Working Paper, supra, note 43, paras. 49-51, at 29-31, and subsequent Report,
supra, note 43, paras. 70-74, at 20-21.

^^ See, generally, supra, note 45, at ll-ll, and esp. at 73, Recommendation 15.

^^ Supra, note 40.

^^ Supra, note 48.

^"^ See Unsworth v. Commissioner for Railways (1958), 101 C.L.R. 73 (H.C.), and Plant v.
Calderwood, 11969] N.Z.L.R. 752 (S.C), rev'd on other grounds [1970] N.Z.L.R. 296
(C.A.).

^5 [1963] S.C.R. 86, 36 D.L.R. (2d) 313.

^6 R.S.0. 1960, c. 138.

133

plus half of the funeral expenses. The plaintiff's request to amend the
statement of claim following the jury's verdict was refused by the trial judge,
whose decision on this point was upheld by the Court of Appeal. The
Supreme Court upheld the jury award, without, however, having to deal
with the question whether the amendment should have been allowed.
Provided that the sum awarded did not exceed the sum claimed by the
plaintiff, the plaintiff was entitled to recover her actual loss as found by the
jury, less the sum attributable to the deceased's own fault. The fact that this
meant that the defendant was liable to pay more than half of the sum for
which the defendant could have been held liable, even though he was only
50 percent at fault, was not regarded as objectionable.

A second approach to calculating liability is to determine the extent of
D2's liability to contribute on the basis only of the amount of common
Uability between Dl and D2. In other words, regard is had to the limitation
upon D2's liability to P before an apportionment is made between Dl and
D2. Under the first alternative, on the other hand, the existence of the
Umitation is disregarded until after the apportionment is made, when its
only effect is to reduce D2's Uability to an amount that is no greater than the
maximum sum to which D2 has contractually limited her liability to P.

Because, in each of the examples considered above, D2's maximum
Uability to P is $500, the common liability of Dl and D2 is $500; therefore,
since each is equaUy at fault, D2 can never be required to contribute more
than $250 to Dl. Of course, if P's loss is less than $500, D2's share will only
be half of P's actual loss. The result of this proposal is that if P's loss is $1,000,
Dl must bear $750 and D2, $250; and if P's loss is $10,000, D2 will still only
be required to contribute $250, the remaining $9,750 falUng upon Dl.

The merit of this scheme is that it gives to D2 the full benefit of the
presence of another wrongdoer, Dl, and allows D2 the total, logical advan-
tage of the limited Uability for which she has bargained with P, presumably at
the cost of a reduction in the price paid for the goods or services supplied or
rendered under the contract. The reason why Dl is bound to bear a higher
portion of the loss suffered by P is because Dl has not bargained with P for a
Umitation upon her liability.

However, the result reached seems unduly harsh on Dl, who obtains
little benefit from the presence of D2; Dl may be required to bear a portion
of the total liability to P far in excess of her share of fault. To increase D2's
portion up to her contractually limited liability— as under the first alterna-
tive—would not expose D2 to a loss against which she had protected herself
by her contract with the injured person.

A third method of apportioning the loss seeks to avoid the extremes of
the first two alternatives and to ensure that D2's limited liability to P is
respected in contribution proceedings by confining D2's liability to contrib-
ute to a proper proportion of the greatest sum that P could have recovered

134

from her. It has been suggested^^ that any satisfactory basis for apportion-
ment should ensure that the wrongdoers benefit proportionately from the
presence of each other. According to this proposal, if P's loss is $750, D2's
limited liability is $500, and Dl and D2 are equally at fault, then the amount
of contribution should be calculated as follows:^^

Dl's share would be ^^J^^^^^ x 750 = 450
750 + 500

D2's share would be ^J^^^^^ x 750 = 300
750 + 500

A further refinement of the formula would be required if Dl and D2 were
not equally at fault.

A fourth alternative is to leave the calculation of the amount to be
contributed by the parties to the discretion of the court, subject to a
provision that a person should never be required to contribute a sum greater
than that for which she could have been successfully sued by the injured
party. This seems to be the choice made in the United Kingdom. Section 2(1)
of the Civil Liability (Contribution) Act 1978^^ states that, subject to the
limitation just mentioned,

the amount of the contribution recoverable from any person shall be such as
may be found by the court to be just and equitable having regard to the extent of
that person's responsibility for the damage in question.

This section is of general application with respect to all claims for
contribution made under the Act. How the courts will apply it when one
party's liability to the injured person is contractually limited is unclear. The
section might be construed to mean that each wrongdoer is liable to
contribute in proportion to her degree of fault (or causation) up to the
contractual limit. This would mean that the first alternative discussed above
had been adopted. But the words "damage in question" could mean the
damage for which both are liable in common; if this were the case, then the
section would have embodied the second alternative.

Apart from its ambiguity, the English solution of leaving the matter to
judicial discretion is not recommended. The problem presents a clear choice
between two competing principles that can appropriately be made by the

^"^ Weinrib, "Contribution in a Contractual Setting" (1976), 54 Can. B. Rev. 338, at 345-46,
esp. n. 34. The first alternative, Professor Weinrib argues, is unduly harsh on D2 because
it gives too little weight to her limited liability and may require her to bear a portion of
the loss that is well in excess of her share of fault. The second alternative, in his view, is
objectionable because it unduly penalizes Dl.

The formula is adapted from that used to apportion liabilities in certain insurance
contexts.

Supra, note 40.

135

Legislature. The choice is between the principle that those whose wrongful
conduct has injured another should bear the cost of compensation in
proportion to their respective degrees of fault (up to any contractual limit),
and the principle that a person who has limited her liability by contract
should be entitled to benefit from the clause in contribution proceedings
both within and beyond the amount so stipulated.

The Commission has concluded that the first of these principles is to be
preferred. There is much to be said for the proposition that if Dl's payment
to P confers a benefit upon D2, as it will until it exceeds the contractually
fixed maximum of D2's liability to P, then Dl should not be prejudiced by
the terms of the contract between D2 and P. Moreover, at a time when a
more critical view is being taken of exemption and limited liability clauses,
especially those contained in standard form consumer contracts, it may
seem somewhat odd to endow them with an added vitality by giving limited
liability clauses an efficacy against a third party (Dl) that is not clearly
justified by the parties' expressed intentions. D2 has, after all, contemplated
that she may be liable up to the stipulated limit. In this context, therefore,
justice would seem to require allocation on the basis of comparative fault up
to the point that Dl's payment actually benefits D2. Accordingly, the
Commission recommends that the fact that a wrongdoer's liability to the
injured person is limited should be ignored for the purpose of calculating the
amount that she is liable to pay by way of contribution, except for the
purpose of ensuring that her liability to contribute does not exceed the
amount in which her liability to the injured person was limited. ^^

(ii) Non-Contractual Defences to Claims for Contribution

We have so far considered the effect upon a contribution claim of a total
or partial defence available to one wrongdoer by virtue of the terms of a
contract with the injured party. In other cases, however, one party may, as a
result of the operation of a general rule of law, either be wholly immune from
liability or have a partial defence to P's claim for damages. Spousal immu-
nity and the gratuitous passenger rule, mentioned earlier in this chapter,^'
provided a common law and a statutory example. Two familiar contempo-
rary examples are the partial defence of contributory statutory negligence
and the statutory bar in the Workers' Compensation Act on an employee
suing her employer for an injury sustained in the course of employment.
This Act prescribes the contribution consequences of the immunity, but
other statutes may not.

The question considered here is whether the reasoning and recommen-
dations of the earlier parts of this chapter are equally applicable to non-
contractual defences that one wrongdoer may have to an action brought
against her by the injured person. One possibility, of course, is that not all

^0 Draft Act, s. 9(5).

^^ See text accompanying notes 19-22, supra.

136

non-contractual defences should be treated in the same way, and that while
the recommendations made earlier in respect of contractual defences should
apply to some non-contractual defences, they ought not to be applied to
others.

a. Contributory Negligence

The operation and scope of contributory negligence upon the liability
of a wrongdoer to the injured person is considered in chapter 10 of this
Report. The aspect of the defence that is relevant to this chapter is its effect
upon rights of contribution between concurrent tortfeasors who are liable
for a single loss suffered by P, but where the damages recoverable by P
against one concurrent wrongdoer (D2) will be reduced because of P's
contributory negligence. As with the limited liability problem considered
earlier, the issue is how best to distribute the loss among defendants whose
liability to the injured person is in different amounts. Suppose, for instance,
that P has been injured as a result of a collision between P's car and a vehicle
negligently driven by D2. P's own carelessness is found to have been greater
than that of D2, so that of P's $1,000 loss, she can only recover $300 from
D2. However, P is able to prove that the accident was also caused by a defect
in her brakes, which Dl had undertaken to correct, but did not. If Dl would
otherwise be liable for breach of contract to P for $1,000, what effect should
P's contributory negligence vis-d-vis D2 have upon P's recovery against Dl,
or how should it affect Dl's right of contribution against D2?

At present, contributory negligence is not a defence to a purely contrac-
tual claim; if, as the Commission has recommended, a right of contribution
is extended to all concurrent wrongdoers, irrespective of the legal characteri-
zation of their wrong, then courts are likely to have to deal with this problem
more regularly than they have so far. However, any extension of the
availability of contributory negligence as a partial defence (to breach of
contract, for example) would reduce the potential contribution difficulties,
since, under the new regime, there would be fewer cases in which the liability
of each of the concurrent wrongdoers to P differs. ^^

There are three principal approaches to resolving the contribution
problem that arises where one concurrent wrongdoer's liability is reduced
by the plaintiff's contributory negligence, but the other's liability is not.
First, the amount recoverable by P from Dl could be reduced so as to
represent only the degree of fault that, as among P, D2, and Dl, is fairly
attributable to Dl's conduct. This is the solution adopted by the Irish Civil
Liability Act, 1961 P Under the second approach, P could recover in full
against Dl, but in proceedings for contribution the fact that P's carelessness
reduced the quantum of D2's liability would be ignored. Thus, Dl would

^^ See, further, chapter 10 of this Report.

^^ Supra, note 13. The Act does so by providing, in s. 38(1), for apportioned judgments,
and departing from the principle of in solidum liability.

137

recover contribution on exactly the same basis as if D2 had not had a partial
defence to P's claim. Finally, P could recover in full against Dl, and D2
would never be required to pay contribution to Dl in a sum greater than the
amount recoverable from her by R This approach represents the present law,
and has been specifically adopted in section 2(3)(b) of the Civil Liability
(Contribution) Act 1978^^ in the United Kingdom.^^

If the third alternative is accepted, then, as discussed earlier in the
context of limited liability clauses, there are several bases upon which
contribution could be calculated up to the maximum of D2's liability to P.
First, the fact that D2 is liable to P for a smaller sum than Dl might be
ignored until the application of the normal apportionment principles results
in D2's paying more than she was liable to pay P. Secondly, the amount for
which D2 is liable to P could be regarded as the parties' common liability,
and an apportionment made on the basis of that figure. Thirdly, some
compromise between these two approaches might be made that better
ensures that both Dl and D2 benefit proportionately from the presence of
the other wrongdoer. Fourthly, the issue might simply be left to the exercise
of judicial discretion on a case-by-case basis. ^^

The Commission has come to the conclusion that P's right to recover in
full from Dl should never be prejudiced by the fact that there is another
wrongdoer (D2) liable to P, even if P's contributory negligence vis-d-vis that
person has reduced the amount that P can claim from D2. Nor should D2 be
required to contribute a greater amount than that for which she was liable to
P: any payments made by Dl to P that exceed this sum confer no benefit
upon D2. Subject to this limitation, it is recommended that P's loss should

Supra, note 40.

^^ The Law Reform Commission of Hong Kong "declined" to make a recommendation
along these lines: supra, note 57, para. 8.11, at 43. Neither the Alberta Institute's Report
nor the Uniform Contributory Fault Act specifically deals with this problem.

In Unsworth v. Commissioner for Railways, supra, note 60, it was held that s. 5(c)
of the Queensland Law Reform (Tortfeasors Contribution, Contributory Negligence and
Division of Chattels) Act of 1952, No. 42 (found in Queensland Statutes 1828-1962, Vol.
20), which provided that contribution could be recovered from any other tortfeasor
liable in respect of the same damage, implicitly prevented Dl from recovering from D2 a
sum greater than its statutorily limited liability. See, also. Plant v. Calderwood, supra,
note 64.

Section 2(3)(a) of the English Civil Liability (Contribution) Act 1978, supra, note
40, also provides that D2 is not liable to contribute beyond a limitation "imposed by or
under any enactment" upon his liability to the injured person. Although the earlier
legislation had not expressly dealt with this matter, the courts had reached the same
result: Acrecrest Ltd. v. W.S. Hattrell and Partners, [1983] Q.B. 260, at 281, [1983] 1 All
E.R 17 (C.A.), overruled on other grounds by Governors of the Peabody Donation Fund
V. Sir Lindsay Parkmson & Co. Ltd., [1985] 1 A.C. 210, [1984] 3 W.W.R. 953 (H.L.).

''^ This seems to be the solution adopted by the English Civil Liability (Contribution) Act
1978, supra, note 40, s. 2(1) and (3)(b).

138

be distributed between Dl and D2 without regard to the fact that D2 is Uable
to P for a lesser sum than Dl.^^

The reasons for these recommendations are substantially similar to
those considered in the context of contractually limited liability, and will not
be reiterated. An additional reason exists, though, for protecting D2 from a
contribution claim that exceeds D2's Uability to P: this is that the reason for
D2's reduced liability is the result of P's conduct, and not an agreement to
which Dl was not a party. Dl is unable to argue that it is unfair that she
should be prejudiced by a contract between P and D2. Moreover, although P
is at fault, if this is insufficient to reduce Dl's primary liability to P, there
seems no reason why this result should be reached indirectly by reducing it
in order to achieve "fairness" as between Dl and D2. In no sense can P be
said to have conferred a benefit upon D2.

b. Other Defences

The most practically important statutory immunity to suit in Ontario
is provided by the Workers' Compensation Act,'^^ which bars a suit against an
employer by an employee who is injured in the course of employment in
circumstances that give rise to a statutory claim for compensation. The
injured worker, however, may have a claim against a third party whose
wrongful conduct also caused the injury. The Act deals with the distribution
of the Ipss among the worker, the employer or the compensation fund, and
the third party, by reducing the damages recoverable against the third party
to a sum that represents the portion of the fault attributable to the third
party. This is a statutory abrogation of the normal principle that a wrong-
doer is liable in solidum for any loss caused by her conduct and that of
another person, and is a legislative adoption in this one context of the
principle permeating the Irish Civil Liability Act, 1961 , namely, that the
injured person should be identified with the wrongdoer whose liability is
legally limited or removed. No question of contribution therefore arises
between the third party and the employer or the compensation fund.

This interpretation of the Workers' Compensation Act has recently been
affirmed in DiCarlo v. DiSimoneJ^ In that case, the injured person sued a
fellow employee and their employer, and the owner of a second vehicle that
had collided with the vehicle in which the plaintiff was travelling with his co-
employee. The action against the first two defendants was dismissed on the
ground that the Workers' Compensation Board had ruled that the accident
had occurred in the course of the injured worker's employment, and was
therefore covered by the statutory compensation scheme. Having elected to

^^ Draft Act, s. 9(4)(a). See, also, s. 9(5). This was the recommendation of the English Law
Commission Report, supra, note 43, para. 77, at 22, but it was not incorporated into the
Act.

^^ Supra, note 23.

"^^ (1982), 39 O.R. (2d) 445, 140 D.L.R. (3d) 477 (H.C.J.).

139

sue the third defendant, rather than claim under the Act, the plaintiff could
only recover damages against the third defendant that were proportionate to
that party's share of the fault. In the event that the third defendant was held
liable, he could not subsequently claim contribution from the first two
defendants.

It will be recalled that Ontario adopted a similar policy in respect of
both spousal immunity and the gratuitous passenger who was injured by the
negligence of both the person in whose care she was travelling and a third
party. ^^

It is not proposed to consider the merits of the provisions of the
Workers' Compensation Act. These provisions are part of a comprehensive
statutory scheme for compensating those injured at work, and properly fall
outside the scope of the more general subject of this study. Suffice it to state
that no recommendation made in this Report is intended to affect in any
way the Workers' Compensation Act.^^ For the reasons already given,
however, it is not recommended that this scheme should be generalized so as
to reduce the liability of one wrongdoer to the injured person because
another wrongdoer enjoys some partial or total statutory defence to a claim
by the injured person. The Commission, therefore, does not recommend
accepting the invitation apparently made by the Canadian Uniform Con-
tributory Fault Act, which, in section 11, contemplates that the principle of
identification adopted in workers' compensation legislation should be
applied more generally to other statutory immunities. If the Legislature
subsequently wishes, in particular instances, to depart from the general
recommendation of the Commission, it should do so specifically.

Recommendations

The Commission makes the following recommendations:

1. Where the injured person sues both the claimant for contribution and
the person against whom the claim is made as co-defendants in a single
action, or where, in the injured person's action against the claimant
alone, the contributor is added as a third party by the claimant, both the
claimant for contribution and the contributor should be bound by the
findings of the court in that action.

2. (1) Where a claim for contribution is made in a legal proceeding

independent of that in which judgment was awarded in favour of
the injured person against the claimant for contribution, it should
be no defence for the person against whom the claim for contribu-
tion is made to show that the court erred in holding the claimant

^^ See supra, notes 19-22 and accompanying text.
^' See Draft Act, s. 23(2).

140

liable to the injured person, except where the judgment was
obtained by collusion or fraud.

(2) The recommendation in paragraph (1) should apply even where
the judgment against the claimant in favour of the injured person
was on consent.

(3) (a) In the independent contribution action, the person against

whom the claim for contribution is made should be entitled to
show that the court wrongly assessed the quantum of the
injured person's loss in the earlier action between the injured
person and the claimant for contribution. Accordingly, the
sum to which the contributor should be required to contribute
should be determined by the court before which the contribu-
tion claim is made.

(b) However, the claimant for contribution should be estopped
from arguing that the injured person's loss was greater than the
amount at which that loss was assessed by the court that
decided the injured person's action against the claimant.

(4) If the judgment in favour of the injured party ordered specific
relief against the claimant for contribution— such as the delivery of
goods or the performance of a service by the claimant— the court
before which the claim for contribution is brought should be
required to place a value on such delivery or performance in order
to determine the amount of contribution recoverable.

3. A person who could at no time have been successfully sued by the
injured person should not be liable to pay contribution to another
person in respect of the injured person's loss.

4. A person whose liability to the injured person is less than that of
another wrongdoer because of a contract made with the injured person
before the cause of action arose, the contributory fault of the injured
person, a statute, or any other reason, should never be required to pay
by way of contribution a sum that exceeds the amount of her liability to
the injured person.

5. The fact that a wrongdoer's liability to the injured person is limited
should be ignored for the purpose of calculating the amount that she is
liable to pay by way of contribution, except for the purpose of ensuring
that her liability to contribute does not exceed the amount in which her
liability to the injured person was limited.

6. No recommendation made in this Report is intended to affect in any
way the Workers ' Compensation Act .

CHAPTER 7

DEFENCES TO
CONTRIBUTION CLAIMS:
SUBSEQUENT
IMMUNITIES

1. INTRODUCTION

The last chapter considered principally the effect upon rights of contri-
bution of a complete or partial defence available to one wrongdoer against
the claim of the injured person. A common feature of those defences is that
they Umit or exclude liability from the time the injured person suffered the
loss or his cause of action accrued. In this chapter, we consider situations in
which the person from whom contribution is claimed (D2) was at one time
liable to compensate the injured person (P), but where subsequent events
have rendered D2 immune from suit. The question is whether a concurrent
wrongdoer (Dl) who has compensated P is entitled to claim contribution
from D2, even though D2 has ceased to be liable to P.

The three contexts in which this issue is most likely to arise are as
follows. First, different time limitation periods may govern the enforcement
of P's rights against Dl and D2. In the substantial number of cases in which
this problem has arisen, the difficulty has been caused by differing statutory
limitation periods, but if the recommendations in this Report are imple-
mented, then the effect of a contractually limited time for suing may
also have to be considered. • Secondly, D2 may have become immune
from proceedings instituted by P because P has already sued D2 and has
lost. Should this bar a subsequent contribution claim by Dl who settles with
or is successfully sued by P after judgment has been given in D2's favour
against P?

^ In Giffels Associates Ltd. v. Eastern Construction Co. Ltd., [1978] 2 S.C.R. 1346, 84
D.L.R. (3d) 344, aff'ing {sub nom. Dominion Chain Co. Ltd. v. Eastern Construction
Co. Ltd ) 12 O.R. (2d) 201, 68 D.L.R. (3d) 385 (C.A.), rev'ing (1974), 3 O.R. (2d) 481, 46
D.L.R. (3d) 28 (H.C.J. ), the Supreme Court of Canada held that D2 could not be
required to contribute in respect of a liability of Dl to P for which D2 was not liable to P
because the fault in the construction had appeared outside the contractually limited
period of the guarantee. This, it is suggested, is a rather different case because, on the
facts, D2 was at no time liable to P for the loss he sustained. This problem is, therefore,
more properly considered as an exemption clause case.

Since the hmitation period for breach of contract runs from the time when the
breach occurred, whereas in tort it runs from the time when the plaintiff suffered his
loss, the extension of the right of contribution to concurrent contract breakers may
increase the frequency with which the problems considered in the text will arise.

[141]

142

The third situation has already been encountered, and was examined in
chapter 5 of this Report, where the effect upon contribution claims of a
settlement between a wrongdoer and the injured person was considered.
The Commission recommended that, even though a person had finally
settled his share of the liability with P, if the settlement did not discharge
other concurrent wrongdoers' liability, they should be entitled to claim
contribution against the settling wrongdoer who settled for less than his fair
share of the total Uability.^ One objection to this conclusion was that since
the settling wrongdoer could not be sued by P, a later payment by Dl to P
conferred no benefit upon D2, and therefore should not support a claim for
contribution.

Throughout this Report, we have emphasized the restitutionary nature
of contribution claims and the importance of the concept of unjust enrich-
ment as a rationalizing principle. However, a rigorous apphcation of this
approach may seem a less satisfying solution to the difficult problems
considered in this chapter. The argument would be that a contribution claim
should only be permitted if a payment, or its equivalent, by one wrongdoer
to the injured party conferred a benefit upon another wrongdoer. Thus, if at
the time that the payment was made by Dl or Dl was held liable to P, the
other wrongdoer (D2) could not be successfully sued by the injured party,
then no part of Dl's payment should be recoverable, because it conferred no
benefit upon the immune wrongdoer. It does not matter for the purpose of
this argument precisely why the wrongdoer from whom contribution is
claimed (D2) is immune from suit by the injured party, whether it is because
the limitation period has expired within which P's rights against D2 must be
enforced, or because P has already unsuccessfully sued D2 so that the
question of D2's liability to P is res judicata, or because P has released D2
from whatever claim he might have had against him.

It ought to be emphasized for the sake of clarity that this analysis does
not assume that Dl's right to contribution arises when P sustains his injury
or when P's cause of action against the wrongdoers accrues. Thus, in the case
of limitation periods, the argument is not that if P commences proceedings
against Dl at a time when P could no longer sue D2, Dl's claim for
contribution must fail because the limitation period governing the right to
contribution runs from the time when P was injured. It is well established
that a contribution claim is a cause of action that is independent of P's cause
of action;^ the right to contribution is generally thought to arise when Dl has
paid— or done something equivalent— a sum greater than his due share of
the common liability to P of the concurrent wrongdoers.^

Supra, ch. 5, sec. 3(c)(iii).

For a recent affirmation of this principle by the Supreme Court of Canada in the context
of federal jurisdiction, see The Queen v. Thomas Fuller Construction Co. (1958) Ltd.,
[1980] 1 S.C.R. 695, 106 D.L.R. (3d) 193.

This is so in the case of sureties and other co-debtors: Williams, Joint Obligations (1949),
at 167-69, and Goff and Jones, The Law of Restitution (2d ed., 1978), at 215-17. There is
no reason to suppose that any different principle should generally apply to the statutory

143

Rather, the question is whether a payment by Dl to P that confers no
benefit upon D2, because D2 could not at that time have been legally
required to compensate P, is or should be capable, as a matter of substantive
law, of giving rise to a claim for the restitutionary right to contribution. The
expiry of the limitation period governing the enforcement of P's rights
against D2 is thus relevant because it prevents Dl's payment from confer-
ring a benefit upon D2 by discharging a liability enforceable against him
by P. Determining what limitation period should govern the contribution
claim itself, once it has arisen, is a different question, and is considered in
chapter 9.

Despite the logical attractiveness and simplicity of this restitutionary
argument, it lacks the compelling quality that a strictly restitutionary
analysis has when applied to situations in which D2 could at no time have
been successfully sued by P. For it is difficult to resist the thought that, in a
very real sense, Dl acquires at least an inchoate right to contribution when
P's loss is sustained, and that this right should not be destroyed by subse-
quent events over which Dl has no control.^ It may be argued that it is unfair
that P should be able to defeat Dl's right by delaying the institution of

right of contribution among tortfeasors created by the Ontario Negligence Act, R.S.O.
1980, c. 315, although, by virtue of s. 6, a third party notice may be served upon D2
before Dl's liability to P has been established in the main action. Indeed, this was made
clear in Nesbitt v. Beattie, [1955] O.R. Ill, [1955] 2 D.L.R. 91 (C.A.). However, in some
cases it has been stated that the right to contribution arises when the tort is committed;
Glass V. Avenue Dodge Chrysler (1979), 26 O.R. (2d) 592, 10 C.C.L.T. 69 (Co. Ct.) is a
recent illustration to this effect. For a criticism of the reasoning in this decision in which
the relevant authorities on this point are cited, see the annotation by Cheifetz in (1979-
80), 10 C.C.L.T. 70.

See, also, Ronex Properties Ltd. v. John Laing Construction Ltd., [1983] Q.B. 398,
[1982] 3 All E.R. 961 (C.A.) (subsequent reference is to [1983] Q.B.), where it was held
that the actio personalis rule applied only to claims in tort, and not to a claim for
contribution that arose against a concurrent tortfeasor in favour of a person who had
been held liable to the plaintiff in tort. Sir Sebag Shaw said (at 407) that the statutory
right to contribution is not tortious in nature, but

derives from a liability in tort to some third party who could have sued any or all of
the tortfeasors concerned. As between them, a claim for contribution resembles a
claim by a plaintiff for money paid by him to the use of the defendant who has been
relieved pro tanto of his direct liability to the victim of the tort.

The "inchoate right" theory is advanced in Larson, "A Problem in Contribution: The
Tortfeasor with an Individual Defense Against the Injured Party", [1940] Wis. L. Rev
467, at 473-77. In Camp v. Bostwick, 5 Am. Rep. 669 (1870), at 693, an inchoate right to
contribution was said to arise from the very existence of the relationship between co-
sureties:

This equity having once arisen between co-sureties, this reasonable expectation
that each will bear his share of the burden is, as it were, a vested right in each, and
remains for his protection until he is released from all his liability in excess of his
ratable share of the burden.

See, also, Weinrib, "Contribution in a Contractual Setting" ( 1976), 54 Can. B. Rev 338,
at 347, who states that the problem is to determine the scope of protection which should
be given to Dl from "the snuffing out of his existing rights by other parties".

144

proceedings against Dl until the time within which he had to sue D2 has
expired, and that P and D2 should defeat Dl's claim by a settlement, release,
or waiver of D2's liability, or by the result of litigation between P and D2.

To permit P, without penalty, to delay proceedings against Dl until P
can no longer enforce his rights against D2, thereby denying Dl a right to
contribution, seems to revive one of the vices of the old rule in Merry-
weather V. Nixan:^ it would give P an unjustifiable power to choose which of
the wrongdoers will ultimately bear the loss. To bar Dl from claiming
contribution because D2 has already been unsuccessfully sued by P burdens
Dl with the result of litigation to which he was not a party, and that may
have resulted in a verdict in D2's favour because it was incompetently
conducted by P's counsel.

Any resolution of these difficulties requires the relevant policies to be
ranked in order of priority: the relevant considerations are Dl's interest (to
use a neutral word) in obtaining contribution, D2's interest in effectively
retaining the immunity from further claims arising out of P's loss, and P's
interest in recovering no less compensation from Dl than that to which he
would have been entitled if Dl had been the only wrongdoer. It is not
surprising to find that these questions have produced controversy among
commentators, inconsistencies in the case law, and divergent responses from
those law reform bodies and legislatures that have addressed them. We have
already considered the effect of a settlement upon contribution claims, and
will not restate here the arguments that led the Commission to the recom-
mendations made in chapter 5. Of the issues that are included in this
chapter, the time limitation problem has proved the most important and
difficult in practice, and is considered fully below. Whether a person can be
sued for contribution after obtaining a favourable judgment in earlier
litigation instituted by the injured person is the second topic discussed in
this chapter. A third topic concerns the effect upon the right of contribution
of a settlement, release, or waiver by P of D2's liability.

2. CONTRIBUTION AND LIMITATION PERIODS

(a) The Present Law

Ontario was one of the first jurisdictions to include in its statutory
provision governing a right of contribution among tortfeasors a section that
deals specifically vsdth the effect upon contribution of the expiry of a period
of limitation within which the injured party is required to institute proceed-
ings against the person from whom contribution is claimed. Section 9 of the
Negligence Act'' provides as follows:

9. Where an action is commenced against a tort feasor or where a tort feasor
settles with a person who has suffered damage as a result of a tort, within the

^ (1799), 8 T.R. 186, 101 E.R. 1337 (K.B.).
^ Supra, noit 4.

145

period of limitation prescribed for the commencement of actions by any
relevant statute, no proceedings for contribution or indemnity against another
tort feasor are defeated by the operation of any statute limiting the time for the
commencement of action against such other tort feasor provided,

(a) such proceedings are commenced within one year of the date of the
judgment in the action or the settlement, as the case may be; and

(b) there has been compliance with any statute requiring notice of claim
against such tort feasor.

A considerable body of case law has grown up around section 9.
Unfortunately, many of the cases are not easy to reconcile and they contain
a significant degree of confusion. This is attributable in part to the inherent
difficulty of the issues and the lack of clarity in the legislation, which, as we
shall see, has been made more opaque by the courts' interpretation of other
provisions. Moreover, many of the judgments are shortly and inadequately
reasoned.

It should be recalled that the principal section of the Negligence Act is
section 2, which creates a right of contribution where "damages" have been
caused by the "fault or neglect of two or more persons", and states that
where "two or more persons are found at fault or negligent, they are jointly
and severally liable" to the person injured. It should be noted that section 2
does not define those from whom contribution may be claimed as tortfea-
sors who are liable to the injured person: the language of section 2 does not,
therefore, plainly require that contribution may be recovered only from
those who at the time that the claim for contribution is made could be
successfully sued by the plaintiff.

Claims for contribution following a settlement between P and Dl are
dealt with in section 3 of the Negligence Act, which defines those from
whom contribution may be claimed as "any other tort feasor who is, or
would if sued have been, liable"" for the damage in respect of which the
settlement was made. While section 3 limits the persons from whom
contribution may be recovered to those who are or would if sued have been
liable, it is ambiguous concerning whether D2 is liable to contribute if, at the
time of the contribution claim, D2 could defend it successfully by showing
that he had ceased to be liable to P by virtue of the expiry of a limitation
period. The use of the past tense in the phrase, "would if sued have been
liable", might simply allow contribution to be recovered when D2 had
ceased to be liable to P because the settlement had satisfied P's claims against
all other tortfeasors. Alternatively, it might mean that a person who at some
time could have been held liable to P is required to contribute to Dl, the
settling tortfeasor, irrespective of the reason why D2 may no longer be
capable of being sued successfully by P.

The ambiguities in sections 2 and 3 about the relevant time at which D2
must be liable to P seem to have contributed to the difficulties in interpret-
ing section 9. Before turning to the case law in which these provisions, and
particularly section 9, have been considered, it will be helpful to attempt to

146

identify the more obvious meanings that they could bear. In cases where the
same limitation period applies to P's cause of action against both Dl and D2,
the meaning of section 9 is clear. It is a condition precedent to a successful
claim for contribution that, when P commences proceedings against Dl, or
P and Dl settle, Dl's liability must not have become statute barred. If it has
not, then Dl may claim contribution by serving a third party notice, or by
instituting an action against D2 under section 3, subject to the normal
limitation provision governing such a claim. However, if between the time
that P commenced proceedings against Dl, or they settled, and Dl claimed
contribution from D2, D2's liability to P has become statute barred, Dl
must claim contribution within a year. In addition, any statutory require-
ment that D2 be given notice of P's claim must have been satisfied.
Problems arise when different limitation periods apply to P's causes of
action against Dl and D2 or when the relevant limitation periods start
running at different times. The problem considered in this chapter is the
effect upon Dl's prima facie right to contribution of the fact that D2's
liability to P is statute barred when Dl claims contribution from D2.

A narrow construction of the operation of the Negligence Act may lead
to the view that, apart from section 9, D2 is liable to contribute only if, at the
time when Dl was successfully sued by or settled with P, P could have
enforced his right to compensation against D2. This is consistent with the
notion that the right of contribution depends upon the conferral of a benefit
upon D2 by Dl's payment: if, at that time, D2 has ceased to be liable to P,
then Dl's payment to P will not have discharged any legal liability that D2
then had to P. The effect of section 9 is simply to give Dl a year from the date
of the judgment against him in P's favour, or from the date of Dl's settlement
with P, within which to claim contribution, provided that notice has been
served upon D2 in time. The fact that D2 has, at the time of the contribution
claim, ceased to be liable to P by virtue of the expiry of a limitation period
governing the enforcement of P's rights against D2 does not defeat Dl's
claim. The requirement of section 9 that Dl must have been sued by, or
settled v^th, the injured person "within the period of limitation prescribed
for the commencement of actions by any relevant statute" should be taken
to refer to the limitation period prescribed for P's action against Dl and P's
action against D2.

Thus, suppose that P has been injured by the concurrent negligence of
Dl and D2. D2 is a police officer and entitled on the facts to the benefit of
the six months' limitation period contained in the Public Authorities Protec-
tion Act} P commences proceedings against Dl six months less one day after
the accident. On the view of the Negligence Act described above, Dl could
commence proceedings for contribution within one year of the date of the
judgment in P's favour against Dl, even though, by that time, D2's liability
to P had ceased to be enforceable by virtue of the special statutory limitation
period. The purpose of section 9 is, on this view, to provide a specific
limitation period within which the contribution claim must be made, in
circumstances where the period within which P had to sue D2 has expired.

^ R.S.0. 1980, c. 406, s. 11.

147

Section 9 negatives the notion that time runs against Dl's claim for contribu-
tion from the moment when P's right of action arose: it gives Dl a year to
enforce his claim against D2, whose liability to P has expired after the
judgment against Dl. However, if P instituted proceedings against Dl six
months and one day after the accident, Dl would have no right of contribu-
tion against D2.

The attractive aspects of this interpretation are that it is consistent with
the restitutionary basis of contribution, and gives effect to what might have
been a sensible compromise between Dl's right to contribution and D2's
retaining the protection of a statutory limitation period that expired after P
obtained judgment against Dl. One difficulty with it, however, is that it is
settled law, at least at the level of the Ontario Court of Appeal, that there are
very few circumstances in which Dl can commence proceedings for contri-
bution after he has been held liable to P. By virtue of Cohen v. S. McCord &
Co. Ltd.,'^ unless Dl's claim is based upon a payment that he made to P
under a settlement, contribution must normally be claimed by serving a
third party notice. Thus, if it is necessary that D2 must still be liable to P at
the time when judgment is given in P's favour against Dl, there will be few
occasions on which section 9 enables proceedings for contribution to be
commenced at a time when D2 has ceased to be liable to P. For most
purposes, section 9 will apply only when contribution is claimed following a
settlement between Dl and P that was made when D2 was still liable to P.
This may have been a factor in the courts' apparent rejection of the
interpretation of section 9 discussed above.

The relevant provisions of the Negligence Act are capable of a wider
interpretation, which would enable Dl to recover contribution from D2
even though, when P instituted proceedings against Dl or P and Dl settled
P's claim, the limitation period governing D2's liability to P had already
expired. The one restriction upon Dl's right is that he must have com-
menced proceedings for contribution within a year of the judgment or the
settlement. On this view, the Act overrides, for the purpose of contribution,
the limitation period applicable to the enforcement of P's rights against D2,
and departs from the restitutionary principles that in other respects regulate
the right to contribution. This result may be reached solely on the basis of
section 9, if it is assumed that a right of contribution does not otherwise arise
under sections 2 and 3 if D2 has ceased to be liable at the time of the
judgment against Dl or the settlement between P and Dl. When section 9
refers to the commencement of the action against Dl by P, or the settlement
between P and Dl, "within the period of limitation prescribed for the
commencement of actions by any relevant statute", the period of limitation
in question is only that governing P's claim against Dl. It has been argued
that it is not necessary to find in section 9 any reference to the expiry, at the

Cohen v. S. McCord & Co. L/J, [1944] O.R. 568, [1944] 4 D.L.R. 753 (C.A.). See, also,
Rickwood V. The Town ofAylmer, [1957] O.W.N. 243, 8 D.L.R. (2d) 702 (C.A.), and
infra, ch. 9, sec. 2(a)(v). It may well be argued, of course, that s. 9 should be regarded as
authorizing claims for contribution to be made by way of a separate action, as well as by
third party notice.

148

time of the judgment against Dl or the settlement between P and Dl, of the
limitation period governing P's rights against D2, because sections 2 and 3
only require that D2 must have been liable at some time to P.'^

On this view, the effect of section 9 is to reduce to one year the time
within which the contribution claim must be made in order to give some
recognition to the statutory policy of limiting the time within which P must
sue D2. However, to the extent that contribution claims must generally be
made before judgment is rendered against Dl,'^ the one year limitation
period would seldom be relevant.

Turning now to the case law, it is worth repeating our earlier observa-
tion that it does not readily yield a particularly clearly reasoned analysis of
the relevant statutory provisions. '^ Nonetheless, as discussed below, the
weight of authority, and especially the more recent cases, seem to adopt the
broader of the interpretations of the Negligence Act described above. Thus, a
third party notice may be served upon a tortfeasor from whom the plaintiff
can no longer recover damages because of the expiry of a limitation period
and, it would seem, Dl can be awarded contribution in the event that the
other elements of the right to contribution are satisfied. It should be noted
that judges sometimes refer to the fact that the Negligence Act provides that
a third party notice may be served upon a person who "is or may be wholly
or partly responsible for the damages claimed".'^ A decision that a person
may be joined as a third party, even though no longer liable to P, may
therefore not be intended to decide conclusively that section 9 enables the
court to award contribution.

In PaulPapp Ltd. v. Fitzpatrick,^^ D2 appealed against a Master's order
giving Dl liberty to add D2 as a third party to proceedings instituted by P
against Dl. P had sustained injuries as a result of a collision in which vehicles
driven by P and Dl were involved. Dl believed that the accident may have
been caused in part by D2's negligence in failing properly to repair the
brakes on Dl's car. Schroeder J.A. pointed out that it was sufficient for the
service of a third party notice under section 6 that the person whom it is
sought to serve " 'is or may be wholly or partly responsible' for the damages
claimed", •^ and that even though P's claim against D2 may have been
barred by The Highway Traffic Act ,^^ Dl's right of contribution against D2

'^ Cheifetz, Apportionment of Fault in Tort (1981), at 49-55. On s. 9 generally, see infra, ch.
9. This view was recently adopted in Re Urquhart and Hatt (1982), 132 D.L.R. (3d) 685
(Ont. Co. Ct.).

'^ Cohen v. S. McCord & Co. Ltd. , supra, note 9.

Supra, this sec.

^^ Negligence Act, supra, note 4, s. 6.

•'^ [1967] lO.R. 565 (C.A.).

'5 7/?/^., at 568.

•^ R.S.0. 1960, c. 172, s. 147(1). Section 147(1) imposed a 12 month limitation period upon
the recovery of damages occasioned by a motor vehicle. This provision was re-enacted

149

may be preserved by section 9 of the Negligence Act ^'' Similar conclusions
appear to have been reached in Judson v. Vasilaras and Town of Lindsay '^
2ind Attorney-General of Ontario v. Kilbrick}"^

The question was discussed further in Paquette v. Batchelor,^^ in which
Dl sought to serve a third party notice upon D2. When P commenced the
main action against Dl the hmitation period governing D2's liabiHty to P
had already expired. Osborne J. held that since the contribution claim was
an independent action, the six months' limitation period did not start to run
in D2's favour until Dl had been held liable to P. Moreover, he also stated
that section 9 preserved Dl's rights from being extinguished by the lapse of
time that barred P's claim against D2. A similar analysis of section 9 was
adopted in Pek v. Levasseur?^ Courts in other provinces with legislation
similar to section 9 have reached the same result as Ontario courts.

in R.S.0. 1970, c. 202, s. 146(1), but amended by The Highway Traffic Amendment Act,
1975 (No. 2), S.O. 1975, c. 37, s. 1, so as to extend the limitation period to 2 years.

Although not mentioned in the reasons for judgment, the result of this case may be
explicable on another ground. The time limitation in s. 147(1) of The Highway Traffic
Act was subject to s.s. (3), which provided that if proceedings were instituted within the
limitation period, counterclaims or third party proceedings were not barred by the fact
that they were instituted outside the period. Section 147(3) now appears, in the same
terms, as s. 180(3) of the Highway Traffic Act, R.S.0. 1980, c. 198.

Third party proceedings must still normally be instituted within the period
prescribed by the applicable rules of civil procedure: hinder v. Hyla, [1962] O.W.N. 13
(H.C.J. ). However, the court does have a discretion to allow the third party notice to
stand despite the lapse of a limitation period and the fact that the notice is out of time:
Boylan v. Red Barn System (Canada) Ltd. (1974), 7 O.R. (2d) 380 (Div Ct.), and Brock
University v. Stewart Hinan Corp. Ltd. (1980), 27 O.R. (2d) 329, 108 D.L.R. (3d) 137
(Div Ct.). On the factors to be considered by the judge in exercising his discretion to
issue a third party notice outside the normal limitation period, see Pugliese v. National
Capital Commission (1981), 32 O.R. (2d) 264 (Div Ct.); Waterloo County Board of
Education v. Mark, Musselman, Mclntyre, Coombe (1982), 38 O.R. (2d) 61 (H.C.J.);
and Ejsymont v. Toronto-Dominion Bank (1984), 47 O.R. (2d) 596 (S.C.O-).

The current Rules of Civil Procedure, O. Reg. 560/84, make some significant
changes to the law relating to third party proceedings. In particular, only the plaintiff in
the main action may object to the issue of a third party claim on the ground that it is out
of time. The court still retains a discretion to extend the period within which the claim
must normally be issued. See, generally, Rules of Civil Procedure, R.29, especially rr.
29.02 and 29.09.

[197 1] 1 O.R. 290 (H.C.J. ). In this case, the person sought to be added as a third party was
a municipal corporation. It objected to service on the ground that The Municipal Act,
R.S.O. 1960, c. 249, s. 443(2), imposed a 3 month limitation period in respect of the
liability alleged. The application by Dl was allowed without prejudice to the right of D2
to rely at trial upon the statutory limitation period. Section 443(2) has been re-enacted
in identical terms as s. 284(2) of the Municipal Act , R.S.O. 1980, c. 302.

19 (1974), 4 O.R. (2d) 313 (C.A.). A recent decision, Brock University v. Stewart Hinan Ltd.,
supra, note 17, affirms this view of the law. See, d\so, Arnold v. Teno, [1978] 2 S.C.R. 287,
83 D.L.R. (3d) 609.

2^ (1980), 28 O.R. (2d) 590, 1 1 1 D.L.R. (3d) 642 (H.C.J.).

2^ (1982), 38 O.R. (2d) 108 (Master S.C.O.), aff'd (1982), 38 O.R. (2d) 109n (H.C.J.). See,
also, Ejsymont v. Toronto- Dominion Bank, supra, note 14.

150

The courts have insisted, however, that the third party notice be served
by the defendant within the period specified by the Rules of Civil
Prbcedure,^^ although this may be extended with leave of the court.^^

On the other hand, it is quite clear that courts will not allow the
Negligence Act to be used so as to revive a liability of D2 to P that has ceased
to be enforceable as a result of lapse of time. And for this purpose it does not
seem to matter whether D2 is sought to be made a party-defendant by P^'* or
by D1.25

(b) Alternatives for Reform

The uncertainties in the present law and the difficulties of construing
section 9 justify, in themselves, a re-examination of this aspect of the
Negligence Act. In addition, as indicated, any extension of the right to
contribution among wrongdoers to include those in breach of contract or of
a fiduciary obligation is likely to give rise to new aspects of the time
limitation problem. ^^ The Limitations Act^~' provides different limitation
periods for different causes of action; limitation periods may start running
from different points depending upon the nature of the cause of action; and
actions based upon allegations of breach of a fiduciary obligation are also
subject to the more flexible equitable doctrine of laches. While the best
solution to many of the difficulties discussed in this part of the chapter could
be resolved by reforming and simplifying the law relating to limitations,^^
short of this there are a number of possible reforms that could be made to
the law of contribution with respect to the problem under consideration.

One alternative would be to permit Dl to claim contribution regardless
of the fact that D2's liability to P had become statute-barred. As we have
seen, Ontario courts have adopted this approach, as has at least one English
court. In Harvey v. R.G. O 'Dell Ltd., ^^ P instituted proceedings against Dl at

Supra, note 17.

See discussion ibid.

'^^ Latiimor v. Heaps (1931), 40 O.W.N. 580 (H.C. Div.).

25 Adams v. W.J. Hyatt Ltd, [1954] O.W.N. 895 (H.C.J.). See, also, Kane v. Haman, [1971]
1 O.R. 294 (H.C.J. ), where it was also said that the fact that the time limitation on D2's
liability to P had expired did not prejudice Dl's right to join D2 as a third party.

See5M/7ra, note 1.

2^ R.S.O. 1980, c. 240.

See Ontario Law Reform Commission, Report on Limitation of Actions (1969); Ontario,
Ministry of the Attorney General, Discussion Paper on Proposed Limitations Act
(1977); and former proposed Limitations Act, 1983, Bill 160, 1983 (32d Legis. 3d Sess.).

[1958] 2 Q.B. 78. See, also, Hordern-Richmond Ltd v. Duncan, [1947] K.B. 545.

151

a time when P's claim against D2 was statute-barred. McNair J. held that Dl
was entitled to serve a third party notice upon D2 despite the fact that D2's
liability to P had lapsed. The English Law Reform (Married Women and
Tortfeasors) Act, 1935 ^^ contained no provision analogous to section 9 of the
Ontario Act; the critical words in section 6(l)(c) of the English statute
defined a person liable to a contribution claim as "any other tort feasor who
is, or would if sued have been, liable in respect of the same damage. . .".
McNair J. held that if D2 had not been sued by P, it was enough for Dl to
establish that D2 would have been liable if sued at some time.^' He thought
it contrary to Parliament's intention in repealing the rule in Merryweather
V. Nixan^^ that P should be able to defeat Dl's ability to claim contribution
by delaying proceedings against Dl until such time as D2 was no longer
liable to P

The High Court of Australia has placed the same interpretation upon
the New South Wales statute that is identical to the English Act of 1935.
Thus, in Brambles Construction Pty. Ltd. v. Helmers,^^ Windeyer J. said: "It
is enough that there was a time, before the habihty of [Dl]. . .was actually
ascertained, at which. . .[P] could have" sued D2. In those Canadian pro-
vinces whose legislation on contribution among tortfeasors is derived from
the English Act of 1935, there are a number of cases holding that it is enough
that D2 was at one time liable to P, even though the limitation period
governing P's claim against D2 had expired by the time that Dl was held
liable to P.^"^ There are also cases that do not follow Harvey's case, and deny
Dl a right to contribution in these circumstances.^^

^^ Law Reform (Married Women and Tortfeasors) Act, 1935, c. 30 (U.K.).

^' In George Wimpey & Co. Ltd. v. British Overseas Airways Corp., [1955] A.C. 169, [1954]
3 All E.R. 661 (H.L.) (subsequent reference is to [1955] A.C), the House of Lords had
held that if D2 had been sued by P, and P's claim had failed because D2 could claim the
protection of a short limitation period, then Dl had no right to contribution. It is
anomalous that DTs success should depend solely upon whether P had instituted
proceedings against D2. The reasoning in Wimpey was applied in County of Parkland
No. 31 V. Stetar, [1975] 2 S.C.R. 884, to legislation worded similarly to s. 6(l)(c) of the
English Act of 1935. See, also, Aleman v. Blair and Canadian Sugar Factories Ltd.
(1963), 44 W.W.R. (N.S.) 530 (Alta. S.C, T.D.).

^^ Supra, note 6.

^^ (1966), 114 C.L.R. 213 (H.C.), at 221.

^"^ See, for example, Clayton v. McNeill's Taxi Ltd., City of Edmonton and Crassland,
[1946] 3 W.W.R. 218 (Alta. S.C, T.D.); British Columbia Hydro and Power .Authority v.
Kees van Westen, [1974] 3 W.W.R. 20 (B.C.S.C); Scott v. Whitworth, [1974] 6 W.W.R.
740 (Alta. S.C, App. Div.), leave to appeal to Supreme Court of Canada refused, [1974]
S.C.R. vii; and MacKenzie v. Vance (1977), 74 D.L.R. (3d) 383 (N.S.S.C, App. Div.).

^5 Cohhle V. Mills, [1947] 2 W.W.R. 790 (Alta. S.C, T.D.), and Johnson v. Vancouver
General Hospital and Van Louie (1973), 44 D.L.R. (3d) 286, [1974] 1 W.W.R. 239
(B.C.CA).

152

The English Civil Liability (Contribution) Act 1978^^ appears to have
given statutory authority to the result in Harvey v. R.G. O 'Dell Ltd. Section
1(3) provides as follows:

1,— (3) A person shall be liable to make contribution. . .notwithstanding that
he has ceased to be liable in respect of the damage in question since the time
when the damage occurred, unless he ceased to be liable by virtue of the expiry
of a period of limitation or prescription which extinguished the right on which
the claim against him in respect of the damage was based.

Despite the somewhat ambiguous drafting of the last clause of this subsec-
tion, it would seem that D2 remains liable to contribute even though his
liability to P had become statute-barred at some time before Dl claimed
contribution.^^ This provision not only requires D2 to pay contribution,
even though Dl's payment to P conferred no benefit upon him, but also
continues D2's Uability to contribute for exactly the same length of time that
governs all contribution claims.

This approach, in effect, ignores, for the purposes of Dl's claim for
contribution, the fact that D2 had ceased to be liable to P when Dl's right to
contribution arose. A number of advantages can be claimed for it. First, Dl
is not prejudiced by the selection by P of the time at which he commences
proceedings against Dl. This, of course, is an event over which Dl has no
control, and it is unfair to prejudice Dl by denying him a right to contribu-
tion solely because P delayed bringing suit until the time within which he
had to sue D2 had expired. To regulate the right of contribution in this way
introduces into the distribution of P's loss among those whose wrongful
conduct caused it an arbitrariness that the abolition of the rule in Mer-
ryweather v. Nixan was intended to avoid.

Secondly, the right to contribution is a claim that is independent of P's
rights against the wrongdoers. It follows from this that the fact that D2 is no
longer liable to P should not inevitably preclude Dl from claiming contribu-
tion: Dl's right arises at the time that he is held liable to P or settles with P.
The limitation period governing the contribution claim should run in D2's
favour, and against Dl, from the time that the right to contribution arose,
not from the time when P's rights accrued. This solution also avoids the
absurdity of saying that, if D2 cannot be required to contribute where he had
ceased to be liable to P when P sues Dl, Dl's right to contribution is statute-
barred before it has even arisen.

^^ Civil Liability (Contribution) Act 1978, c. 47 (U.K.).

To construe s. 1(3) as applying to all periods of limitation would, of course, produce the
opposite result from that described in the text. The last clause of s. 1(3) probably only
applies to claims for the recovery of land and goods, where D2 has acquired, or P has
lost, title as a result of the lapse of time. In other contexts, the expiry of a limitation
period is normally said to bar a plaintiff's remedy, not extinguish his right.

The Law Commission's Working Paper {Contribution, Working Paper No. 59
(1975)), paras. 31-35, at 18-22, canvassed the possible solutions to the problem without

153

There are, however, some serious objections to this solution. First, it is
inconsistent with the restitutionary character of contribution claims: if Dl is
held liable to or settles with P at a time when P's rights against D2 are statute-
barred, Dl's payment to P discharges no legally enforceable liability of D2
and thus confers upon D2 no benefit, the retention of which would unjustly
enrich him at Dl's expense. The discharge of an unenforceable legal obliga-
tion does not generally constitute a benefit in the law of restitution.

Secondly, it may be argued that to require D2 to contribute to a liability
discharged by Dl when P could no longer enforce D2's liability to him would
deprive D2 of the protection that it was contemplated he should enjoy when
P was statutorily required to enforce his rights against D2 within a shorter
period than that applicable to P's rights against Dl. If the result is unsatisfac-
tory, it is because the law of limitations is defective. Anomalies produced by
that branch of the law should be redressed by reforming it directly, and not
indirectly by tinkering with the principles underlying the law of contribu-
tion. While it is true that for some purposes the right to contribution is
independent of the rights of the injured party and arises from the time when
Dl is held liable to or settles with P and not from the time when P's cause of
action arose, nonetheless, if D2 remains potentially liable for contribution
in respect of a payment made by Dl to P after D2 had ceased to be liable to P,
D2 is, in substance, deprived of the protection afforded by the limitation
period within which P must enforce his rights against D2. If D2 defends
against the contribution claim by disputing his liability to P or the degree of
fault that should be attributed to him, he will have to rely upon the same
stale evidence upon which he would have had to rely if he had been sued out
of time by P. Allowing Dl to claim contribution in these circumstances also
prevents D2 from regarding any potential liability that he may have
incurred as a result of P's injury as concluded at the expiry of the limitation
period.

making any provisional recommendation. In its Report, the Law Commission recom-
mended no change in the law, but referred the problem to the Law Reform Committee
for its consideration when reviewing the law relating to limitation periods: Law of
Contract: Report on Contribution, Law Com. No. 79 (1977) (hereinafter referred to as
"Law Commission Report"), para. 32, at 10. The final Report of that Committee
{Twenty-First Report (Final Report on Limitations of Actions) (Cmnd. 6923, 1977)),
para. 3.34, at 40, recommended that there should be no change in the law as it had been
established in Harvey v. R.G. O'Dell Ltd., supra, note 29. It concluded that, despite the
theoretical possibility that the present law exposed D2 to a claim for contribution long
after his primary liability to P had expired, it "causes few problems in practice" because
well advised plaintiffs sue all possible defendants at one time, and if they do not, the
defendant who is sued will normally quickly bring them into the action by the service of
a third party notice.

The Law Reform Commission of Hong Kong recommended the adoption of the
solution contained in the English Act of 1978, but was critical of the draftsmanship of
s. 1(3) (Report on the Law Relatinf^ to Contribution Between Wrongdoers, Topic 5
(1984), paras. 6.2-6.4, at 33 (hereinafter referred to as "Hong Kong Report")).

The South Australian Wrongs Act, 1936-1975, s. 25(l)(a)(iv) and (3), operates in
much the same way: see Monaghan v. Wardrope and Carroll Ptv. Ltd. (1970), S.A.S.R.
575 (S.C), and Aakster v. HA. Chalmers Pty Ltd. (1972), 3 S.A.S.R. 519 (S.C).

154

The third objection is that if D2's UabiUty to P arose from a breach of
contract, and the contract included a short Umitation period, to permit Dl
to claim contribution from D2 in respect of a liability established outside
this period would deprive D2 of part of the bargain that he had made with P.
Contracts should not lightly be upset in order to prevent a third party (Dl)
from suffering some "injustice". The Commission has already argued in the
context of contractual exemption and limited liability clauses that Dl
should not be given a windfall for which he had not bargained. ^^

A second approach to the issue under consideration would remove
some of the force of the objections to the alternative considered above by
providing for a short limitation period within which contribution must be
claimed when D2's liability to P has become statute-barred at the date of
either a settlement between P and Dl or the institution of proceedings by P
against Dl. This may have been the kind of scheme originally contemplated
by section 9 of the Negligence Act. It might be suggested, therefore, that,
where D2's liability to P had expired at the time of the settlement between P
and Dl or the institution of proceedings by P against Dl, D2 should remain
liable to a contribution claim made within six months of either of these
dates, even though the normal limitation period governing contribution
claims would not otherwise expire until considerably later. ^^

This approach has been adopted by the Alberta Institute of Law
Research and Reform, which has recommended that contribution should
be given a limited priority over D2's security from suit outside the period
governing his liability to P.^^ It has therefore proposed that contribution may
be claimed from D2, even though he had ceased to be liable to P when P
instituted proceedings against Dl, provided that Dl serves a third party
notice within six months from the date when P served notice of his claim
upon Dl. D2 would have six months from the time when he was served with
notice by Dl to serve notice upon D3. The Institute also proposed that Dl
should be able to continue his claim for contribution by way of an action if P

^^ See supra, ch. 6, sees. 3(d)(i)a and b. See, also, infra, note 43, on the possible effect of the
Uniform Contributory Fault Act on contractually imposed limitation periods. The
Uniform Act was adopted by the Uniform Law Conference of Canada in 1984: see
Proceedings of the Sixty-Sixth Annual Meeting (1984), Appendix F, Uniform Contribu-
tory Fauh Act .

The Limitations Act , supra, note 27, contains no specific limitation period for contribu-
tion claims, but the period is probably 6 years, since quasi-contractual claims (or
equitable claims analogous thereto) are, presumably, governed by the period applicable
to actions in contract: see Black v. Horseman (1974), 4 O.R. (2d) 188 (H.C.J. ). However,
it is also arguable that the right of contribution under the Negligence Act, supra, note 4,
falls within s. 45(l)(h) of the Limitations Act as an action given by statute for damages or
a sum of money. Compare Schwella v. The Queen, [1957] Ex. C.R. 226, and Sherritt v.
Thorold Concrete Block Co., [1954] O.W.N. 535 (C.A.).

Alberta, Institute of Law Research and Reform, Contributory Negligence and Concur-
rent Wrongdoers, Report No. 31 (1979) (hereinafter referred to as "Alberta Report"), at
62-71.

155

and Dl settled after P had served notice upon Dl, and Dl had served a third
party notice upon D2.

The Institute was unable to make an analogous recommendation to
cover the case where P has never instituted proceedings against Dl, and
where Dl's claim for contribution is based upon a settlement between P and
Dl. In this situation, the Institute recommended that D2 should not be liable
to a claim for contribution in respect of a payment by Dl to P under a
settlement that was made after D2's liability to P had ceased to be enforce-
able by virtue of the lapse of time.

The Alberta Institute's proposal may be attacked on the ground that it
extends D2's liability to contribute beyond the contractual or statutory
limitation period within which P must sue D2. Moreover, where P must
proceed against D2 within a particularly short limitation period, this
provision might expose D2 to liability to Dl for a substantial time after his
liability to P had expired, especially if P commenced proceedings against Dl
just before Dl's liability became statute-barred. In addition, its different
treatment of claims based upon the liability of Dl established following the
institution of legal proceedings by P, on the one hand, and settlements, on
the other, is unsatisfactory.'*^

The Uniform Contributory Fault Act, adopted by the Uniform Law
Conference of Canada,'^^ contains no provisions that bear specifically upon
the problem under consideration."^^ However, it may be that the definition
in section 1(a) of concurrent wrongdoers as persons "whose wrongful acts
contribute to the same damage" only requires that they must have been
potentially liable at any time after P sustained the loss.

A third, and quite different, solution would be to impose upon the
injured person the cost of his failure to institute proceedings against Dl until
the lapse of time had rendered P's rights against D2 unenforceable. As might
be anticipated, this is the approach adopted in the Irish Civil Liability Act,
1961, "^"^ section 35(l)(i) of which provides that the plaintiff shall be respon-

"^^ This point is conceded in the Alberta Report, ibid., at 71. There is no explanation why
the Institute did not recommend that Dl could claim contribution within 6 months of
making a settlement with P, even though D2's liability to P had expired by the time of the
settlement. To make Dl's right depend upon whether or not P had instituted legal
proceedings against Dl before the settlement was made seems odd.

Supra, note 38.

"^^ It may be that the definition of a "release" in s. 1 of the Uniform Act as including an
agreement that limits the liability of a person for damages applies to a limitation period
contained in a contract. If so, then s. 12(2) solves the contribution problem by reducing
the damages recoverable by the injured person by the amount that would otherwise
have corresponded to the degree of responsibility for the loss that was attributable to the
concurrent wrongdoer whose liability has ceased to be enforceable by virtue of the
contractual clause.

Civil Liability Act. 1961, No. 41.

156

sible for the acts of a concurrent wrongdoer against whom he can no longer
proceed by virtue of the lapse of a statutory limitation period.

The proposal that the injured person's damages should be reduced if he
unreasonably delayed proceedings against Dl until P's claim against D2 had
become statute-barred has been supported by Professor Larson,"^^ and some
judicial support can be found in the judgment of the Alberta Supreme
Court, Appellate Division, in County of Parkland No. 31 v. Stetar,^^ in
which P was awarded judgment against Dl for that portion of P's loss that
corresponded to Dl's degree of fault. P was left to bear the share attributable
to D2, whom he could no longer sue, and from whom Dl could not obtain
contribution because P had failed to serve notice upon D2 in time. The
Supreme Court of Canada, however, reversed this decision, and awarded
damages against Dl for the whole of P's loss; Dl was denied a right of
contribution against D2.

The advantages of the position adopted in the Irish Act are that it
protects D2 from stale claims and gives full effect to the reasons for giving
D2 the benefit of a short limitation period against P. In addition, it prevents
Dl from being prejudiced by P's delay, a matter over which he has no
control. It thus limits the ability of P arbitrarily to cast the entire burden of
compensating him, without any opportunity of apportionment, upon one
of the concurrent wrongdoers.

The disadvantages of the Irish solution are that it derogates from the
principle that the injured person should not be prejudiced by the existence
of another wrongdoer. Moreover, the plaintiff should not be penalized for
deciding to proceed against only one wrongdoer, nor prejudiced in his claim
against D2 for the way in which he decides to conduct his litigation with Dl.
Any limitation upon P's right to recover that is regulated by reference to an
unreasonable failure to proceed in time against D2 is likely to be difficult to
apply

A final approach would be to change the present law so as to give the
highest priority to the restitutionary basis upon which claims for contribu-
tion rest, leaving any injustices that result from the differing operation of the
limitation periods in respect of P's claim against Dl and D2 to be dealt with
by reforming the major source of the problems, namely, the law of limita-
tions. Nor is this view inconsistent with the notion that the right of
contribution is an independent right that arises at the time when Dl's
liability to P is ascertained and that any limitation period should run from
then, and not from when P's cause of action arose. The argument is not that,
if Dl is sued by P after D2 had ceased to be liable to P, Dl's claim for
contribution is statute-barred; rather, it is that the right to contribution
never arose at all because Dl's payment can confer no benefit upon D2.

^^ Supra, note 5, at 501.

"^^ See supra, note 31, at 889-90.

157

The principal weakness of this proposal is, of course, that it enables P to
prevent Dl from claiming contribution by simply delaying proceeding
against Dl until D2's liability to P has ceased to be enforceable. This
difficulty may be met in part by allowing Dl to seek a declaration of
contingent entitlement to contribution from D2 in the event that Dl is sued
by P and held liable. A proceeding of this kind would put D2 on notice that
he might be required to pay contribution, and would enable Dl to preserve
his ability to claim contribution in the event that P sued Dl at a time when
D2 was no longer liable to P. It can also be argued that it is unattractive to
give D2 the benefit of a technical and often substantively unmeritorious
defence at the expense of Dl.

The Commission has concluded that the consequences of the operation
of different Umitation periods should not fall on P. The Irish Act's solution
should therefore be rejected. Proposals for reforming the law of contribution
among wrongdoers seem an inappropriate means for requiring the injured
person to sue all who may possibly be liable for his loss, on pain of suffering
a reduction in damages, and for derogating from the important principle of
the in solidum Uability of those whose concurrent wrongs have caused a
single, indivisible loss. Some of the most cogent doubts about the desirabil-
ity of the right to contribution, which were considered in chapter 4 of this
Report,"^^ spring from a fear that retaining and extending the right may
prejudice the injured person's ability to recover full compensation, and a
belief that this risk is not worth running in order to achieve fairness among
the wrongdoers.

A more difficult question is whether D2 should remain liable to pay
contribution well beyond the period of his enforceable liability to P. The
issue here is whether priority should be given to D2's protection from claims
arising, in the broad sense, out of the loss inflicted upon P, or to Dl's interest
in ensuring that his ability to recover contribution is not prejudiced by the
conduct of P after P's cause of action against Dl and D2 has arisen. As we
have seen in this chapter, powerful arguments can be made on both sides of
this issue, and no result may be completely satisfactory.

We turn first to consider the case of a statutory limitation period. The
Commission has decided to recommend that a person should remain liable
to pay contribution notwithstanding the fact that the injured person's rights
against him have become unenforceable as a result of the expiry of a
statutory limitation period or, indeed, the existence of an equitable defence
based on delay'*^ Thus, Dl's ability to claim contribution should not be

Supra, ch. 4, sec. 3(a)(i).

^^ See the Commission's proposed Contribution and Comparative Fault Act (hereinafter
referred to as "Draft Act"), s. 15(a). The Act appears as an Appendix of this Report.
Compare the Commission's Report on Limitation of Actions, supra, note 28, at 113.

158

prejudiced by any delay on the part of P in instituting proceedings against
D2, even if D2's liability had become statute-barred when P instituted
proceedings against Dl. The Commission also recommends that the result
should be no different if Dl's claim is based upon a settlement that he has
made with P."^^ It would be arbitrary to prevent Dl from recovering contri-
bution after settling with P, if, at the time of the settlement, D2's liability to P
had ceased to be legally enforceable as a result of a statutory limitation
period. It would either discourage the well-advised from settling the injured
person's claim, or deny contribution to a person who could have recovered if
he had forced P to sue him.

The preceding recommendations respecting the effect of a statutory
limitation period would, therefore, embody the interpretation given by our
courts to the Negligence Act and make it applicable to all rights of contribu-
tion among concurrent wrongdoers, whether tortfeasors or those in breach
of a contractual, statutory, or fiduciary duty.

It is now necessary for us to consider the limitations imposed by
paragraphs (a) and (b) of section 9 of the Negligence Act . With respect to
paragraph (b), it seems to us to be difficult in principle to continue to justify
the existing distinction between a limitation period and a statutory provi-
sion that a person must be served with notice of the claim. Nor, indeed, do
we see why P's failure to comply with any procedural requirement should be
treated differently. In all these cases, the purpose is to protect a potential
defendant from defending an action for damages by the injured person at a
time when he may no longer expect to have to do so and, indeed, when he
has, for example, lost or destroyed the evidence or when the evidence can no
longer be obtained. If the right to contribution is not defeated by the
plaintiff's delay in instituting proceedings, then it should be equally
immune to a failure by the plaintiff to serve notice of his claim upon a
concurrent wrongdoer or to comply with any other procedural requirement,
and we so recommend. ^^

We do recognize, however, that some statutes require the giving of
notice of a claim within a very short period of time from when P's cause of
action arose. For example, section 284(5) of the Municipal Act^^ provides
that no action shall be brought against a municipality for breach of its duty
to keep highways and bridges in repair unless notice of the claim is given
within ten days (or seven days in the case of an urban municipality). Short
notice provisions of this kind are designed to give the defendant the
opportunity to preserve the evidence needed to defend P's action where that
evidence is likely to be lost or to disappear quickly.

"^^ Draft Act, s. 15(d).

^^ Ibid.,s. 15(c).

^' R.S.O. 1980, c. 302. See, also. Proceedings Against the Crown Act, R.S.O. 1980, c. 393,
s. 7(3).

159

Under our recommendation permitting Dl to claim contribution even
though notice was not given to D2 within the time stipulated by statute, it
would be possible, for example, for a concurrent wrongdoer to claim
contribution against a municipality several years after an accident, and
without any notice to the municipality, where the claim is based on the
municipality's alleged failure to clear the highway of snow and ice, even
though the injured party would be barred from bringing his own action in
respect of the accident. On the other hand, as we have said, the alternative
solution to the problem created by P's failure to serve notice is also subject to
considerable criticism, both in principle and in practice. Moreover, not all
notice provisions are as short as the one contained in section 284(5) of the
Municipal Act; to the extent that particular notice periods and particular
limitation periods are of the same length of time, the arguments for treating
the two in different ways clearly become less compelling.

The Commission does, however, believe that attention should be drawn
to the various statutory notice provisions, particularly having regard to the
fact that our proposals would alter the law quite significantly in this area.
Accordingly, we recommend that, should the Commission's proposed legis-
lation be enacted, those governmental officials responsible for the adminis-
tration of statutes requiring notice of a claim to be sent to an alleged
wrongdoer should review the nature and purpose of the statutory notice
requirements in order to determine whether they are of overriding impor-
tance and, therefore, whether they ought to be made to apply notwithstand-
ing the Commission's Contribution and Comparative Fault Act. If it is
thought that the failure to give notice under a particular statutory notice
provision should continue to be available as a defence to a contribution
claim, an express non obstante clause could then be enacted. We believe that
this proposal properly places the burden on government officials adminis-
tering the relevant statutes to justify the retention of existing notice provi-
sions and, therefore, the protection of concurrent wrongdoers against whom
contribution is claimed.

With respect to the special limitation period, set out in section 9(a),
within which a claim for contribution must be made against a wrongdoer
who has ceased to be Uable to the injured person, the Commission wishes to
make the following comments in support of its proposal in favour of
abolition. For one thing, nearly all claims for contribution made following
the institution of legal proceedings by P against Dl will be made in the
course of that litigation by means of a third party claim. Moreover, in the
cases in which Dl claims contribution in an independent action, following
either a settlement with P or a judgment against him in P's favour, the
requirement that Dl proceed within a year of judgment or settlement does
not, in our view, provide a very effective compromise between the interests
of Dl and D2. The length of time for which D2 will remain exposed to
liability to Dl after P's action against D2 has been barred by lapse of time
depends, under section 9, upon the date of the settlement or judgment, not
the date when P's rights against D2 ceased to be enforceable. To this extent,
paragraph (a) is an arbitrary restriction upon the rights to recover contribu-
tion.

160

We turn now to consider the effect of a contractually imposed limita-
tion period. In this case— where the contract between P and D2 includes a
short hmitation period that, at the operative time in terms of Dl's contribu-
tion claim, renders D2 immune from suit by P— we believe that different
considerations from those described above ought to apply. It will be recalled
that, in the context of contractual exemption clauses, we were not of the
opinion that a contractual term should be set aside, and that D2 should be
deprived of the bargain entered into with P, in order to ensure that Dl is not
prejudiced by this bargain. To assist Dl, we would have been compelled to
give Dl a windfall for which he had not paid.

For these reasons— which, we believe, apply equally in the analogous
case of a contractual limitation period in favour of D2— the Commission
recommends that it should be a defence to a claim for contribution for the
contributor to establish that proceedings were instituted by the injured
person against the claimant, or a settlement was made between them, after
the expiry of a limitation period contained in a contract made between the
contributor and the injured person before the latter's cause of action arose
against the contributor. ^^

3. THE EFFECT OF A JUDGMENT IN FAVOUR OF D2 IN
PROCEEDINGS INSTITUTED BY P

(a) Introduction

In this part of the chapter, the question to be considered is whether it
should be a defence to a claim for contribution that the person from whom it
is claimed (D2) has ceased to be liable to the injured person (P) because,
before the claimant's (Dl) right to contribution arose (as a result of a
settlement between P and Dl or successful legal proceedings by P against
Dl), D2 had already been sued by P and judgment had been given in D2's
favour. This problem may arise in a number of different contexts. First, P
may have sued Dl and D2 together, and P's claim against D2 may have been
dismissed. To the extent that the law allows a claim for contribution that
could have been made by a third party notice to be pursued in a separate
action, should the failure of P to obtain judgment against D2 be a conclusive
defence to the action for contribution? Secondly, P may proceed against D2
alone. If P's claim is unsuccessful, but he later sues Dl, should Dl be entitled
either to serve a third party notice or to institute a separate action for
contribution against D2? Thirdly, if P has unsuccessfully sued D2, and P and
Dl later settle P's claim, should Dl be able to recover contribution from D2?
Fourthly, if P successfully sued Dl, who does not serve a third party notice
upon D2, and P then sues D2 because Dl has not satisfied the judgment in
P's favour, but loses, can Dl subsequently claim contribution from D2 if he
later satisfies P's judgment?

^2 Draft Act, s. I4(l)(b).

161

The problem common to these hypothetical is that when Dl was held
liable to or settled with P, D2 could not legally be required to compensate P
because the judgment rendered in D2's favour in the action instituted by P
had made the issue of D2's liability to P res judicata. To use the principles of
the law of restitution, Dl's satisfaction of P's claim will confer no benefit
upon D2 because D2 could not have been successfully sued by P: he had no
legal liability to P that Dl's payment could discharge. Another reason why it
would be unjust to hold D2 liable to contribute is that it would expose D2 to
the "double jeopardy" of having to relitigate with Dl a question that had
already been decided in his favour in the action brought by P. There is, in
addition, a public interest in the finality of litigation. On the other hand, it
can be argued that Dl should not lose his right to contribution and thus be
prejudiced by the outcome of Utigation in which he did not participate: the
doctrine o{ res judicata usually only applies when the issues and the parties
are identical.

(b) The Present Law

It has already been noted in this Report that section 2 of the Negligence
Act, which is the principal provision creating the right of contribution
among concurrent tortfeasors, does not define those who may claim contri-
bution, and those from whom it is claimed, as persons who are liable to the
injured person for the loss that he has sustained. Similarly, section 6, which
provides for the service of third party notices for contribution, speaks of the
person upon whom notice may be served as one who "is or may be wholly or
partly responsible for the damages claimed". The language of these sections
thus leaves it open to argument that they do not limit those from whom
contribution may be claimed to persons who, at the time when the right to
contribution arose, were still potentially Uable to be sued successfully by the
injured person. However, it should also be noted that section 3 defines those
from whom contribution may be recovered by a person who has settled with
the injured person as "any other tort feasor who is, or would if sued have
been, liable in respect of the damage".

There seems to be relatively little case law in Ontario on the application
of these provisions to the problem under consideration. However, the issue
did arise in Horvath v. Registrar ofM. K.^^ In this case, the Registrar sought
to join as third parties persons (D2) against whom the plaintiff's claim had
already failed, apparently on its merits. The Master dismissed the applica-
tion on the basis of what seemed to him to be "the clear effect" of section 6 of
the Negligence Act. He held that, although the issue of D2's liability to P was
not strictly res judicata against Dl for the purpose of claiming contribution,
it was not intended "that the defendant [D2] in the original action should be
subject to the possibility of being put in jeopardy again under [section 6 of
the Negligence ActY.^"^

^^ [1961] O.W.N. 324 (Master S.C.O.).
^"^ Ibid., at 325.

162

The reasons given for judgment, however, are not very convincing, and
its authority may therefore be open to question. The learned Master relied
upon Sinkevitch and Beaudoin v. Canadian Pacific Railway Co.^^ for the
proposition that section 6 does not authorize the issue of a third party notice
against a person "against whom a judgment for damages could not in law be
given". But the person from whom contribution was claimed in Sinkevitch
enjoyed a statutory immunity from suit under workers' compensation
legislation. A case in which D2 was never potentially Uable to the plaintiff
does not necessarily determine the result of one in which D2's defence is
that, although liable to P at one time, he has ceased to be liable by virtue of a
judgment in his favour in an action brought by P.

The effect upon a contribution claim of an existing judgment in favour
of D2 has been considered on a number of occasions in other jurisdictions,
where the relevant legislation was worded, like section 3 of the Ontario
Negligence Act , so as to define potential contributors as those who are or
would if sued have been liable in respect of the plaintiff's damage.

The best known is the decision of the House of Lords in George
Wimpey & Co. Ltd. v. British Overseas Airways Corp.^^ In this case, P sued
Dl and D2 for damage caused by the negligence of the defendants' employ-
ees. Dl was held liable, but P's action against D2 was dismissed on the
ground that P had instituted proceedings after the expiry of the short
limitation period within which public authorities were at that time required
by statute to be sued.^^ By a majority, the House of Lords struck out Dl's
third party notice for contribution on the ground that section 6(l)(c) of the
Law Reform (Married Women and Tortfeasors) Act, 1935^^ contemplated
only two categories of persons from whom contribution could be sought.
These were tortfeasors who had been held liable to P in legal proceedings
and those against whom no legal proceedings had been instituted by P, but
who would, if sued, have been held liable. Thus, there was no right to claim
contribution from a person in the position of D2 in this case, that is, a person
who had been sued and held not liable, even though the plaintiff's action
had failed because it was out of time, rather than on the substantive issue of
the legal wrongfulness of D2's conduct.^^ It seems tolerably clear that their

55 [1954]O.W.N.21(H.C.J.),at23.

5^ Supra, note 31.

5^ Limitation Act 1939, c. 21 (U.K.), s. 21. This Act was repealed by the Law Reform
(Limitation of Actions, &c.) Act, 1954, c. 36 (U.K.). However, in Ontario, short
limitation periods apply to some actions against public authorities {Public Authorities
Protection Act , supra, note 8, s. 11(1)), and municipalities {Municipal Act , supra, note
18, s. 284(2)). The Health Disciplines Act , R.S.0. 1980, c. 196, s. 17, also contains a short
limitation period for malpractice suits.

5^ Supra, note 30.

5^ This was the view of Viscount Simonds and Lord Tucker. The third member of the
majority, Lord Reid, held that a contribution claim failed if D2 had ceased to be liable
either when Dl was sued by P or when Dl claimed contribution from D2. He did not
find it necessary to select between these because on the facts D2 had ceased to be liable to
P at both times.

163

Lordships would have reached the same result if D2 had been found not
liable to P on the merits and Dl had subsequently contended that the court
had erred in finding D2 not liable to P.^^

A question not decided in Wimpey was whether the result would have
been the same if D2 had not been sued by P This would have required their
Lordships to consider the issue discussed in the previous part of this chapter,
namely, the effect upon a claim for contribution of the expiry of the
limitation period in D2's favour against P by the time that P sued Dl or Dl
claimed contribution from D2. The subsequent decision in Harvey v. R.G.
O'DellLtd.^^ that, where D2 had not been sued, he could be required to pay
contribution to Dl provided only that he had at some time been liable to P,
created a serious anomaly in English law. It was difficult to justify a
conclusion that whether D2 was bound to contribute after P's claim against
him had become statute-barred depended upon the fortuity of whether P
had sued D2 or not.

The reasoning and the result in Wimpey have been followed by the
Supreme Court of Canada in a case that arose under Alberta's Tort-feasors
Act,^^ which defined those from whom contribution could be claimed in the
same way as the English Act of 1935. In County of Parkland No. 31 v.
Stetar,^^ P sued Dl and D2 for injuries caused by the defendants' negligence.
The trial judge attributed 75 percent of the fault to Dl, and 25 percent to D2.
However, P did not obtain judgment against D2, a municipality, because
notice had not been given to D2 of P's claim in the short period provided by
the Municipal Government Act, 1968.^^ Dl's claim for contribution was
dismissed.^^

While these decisions seem clearly to preclude a claim for contribution
under section 3 of the Ontario Negligence Act against a person who has
already been held not Hable, for whatever reason, to the injured person,
neither they nor Horvath s case can be regarded as settling conclusively the

^^ Thus, Viscount Simonds stated that it would be undesirable to expose D2 to a second
action, brought by Dl, on the assumption that P's action had failed because "the case
had been inadequately presented or even because the judge or jury had taken a wrong
view of it" (George Wimpey & Co. Ltd. v. British Overseas Airways Corp., supra, note
31, at 178).

^^ 5'M/7ra,note29.

62 R.S.A. 1955, c. 336 (now R.S.A. 1980, c. T-6).

6^ Supra, note 31.

6'* C. 68 (now R.S.A. 1980, c. M-26).

6^ Dickson J. stated that had Alberta's Contributory Negligence Act, R.S.A. 1970, c. 65
(now R.S.A. 1980, c. C-23), applied, then the county might have been liable to pay
contribution, even though the plaintiff's action failed because timely notice of the claim
was not given. See, also, Mackenzie v. Vance, supra, note 34, and Campbell v. Bart let t
and Yonge (third party) (No. 2) (1979), 107 D.L.R. (3d) 591, [1980] 1 W.W.R. 758 (Sask.
C.A.). But see J.R. Paine and Associates Ltd. v. Strong, Lamb and Nelson Ltd. (1979),
103 D.L.R. (3d) 579, [1979] 6 W.W.R. 353 (Alta. C.A.).

164

question whether sections 2 and 6 permit the service of a third party notice
upon an alleged tortfeasor against whom P has unsuccessfully instituted
proceedings in respect of the damage.

The rationale for the courts' interpretation of the relevant legislation in
Wimpey and Stetar was later made clear by the English Court of Appeal in
Hart V. Hall & Pickles Ltd.^^ In this case, the Court allowed a third party
notice to be served upon a person who had previously been sued by P, but
whose action had been struck out for lack of prosecution. Lord Denning
M.R. distinguished the case before him from Wimpey in this way:^^

When an action has been dismissed for want of prosecution, the defendant has
not been 'sued to judgment' at all. There has been no finding on the merits.
There has been no judgment that the defendant is not liable. It is only an
interlocutory order— a matter of procedure— which does not affect substantive
rights. It is not a final decision. It does not give rise to an estoppel by res
judicata. The plaintiff can start another action for the same cause, so long as he
does so within the period allowed by the Statute of Limitations.

The concluding sentences of this passage reveal a rationale that may well
extend beyond the particular language in which the liability to contribute is
defined in the 1935 English Act and those statutes that are patterned after
it.^^ If the reason for the failure of P's action against D2 is such that he is free
to institute fresh proceedings against D2, then D2 remains potentially Uable
to P when contribution is claimed by Dl. If Dl is held liable to P, then his
payment is still capable of conferring a benefit upon D2 by discharging an
existing liability to P. In other words, the passage supports a restitutionary
view of the right to contribution.^^

^^ [1969] 1 Q.B. 405 (C.A.).

^^ 7/?/^., at 411.

^^ See Re Urquhart and Halt, supra, note 10.

A similar result was reached in a New Zealand case, Calderwood v. The Nominal
Defendant, [1970] N.Z.L.R. 296 (C.A.), in a rather different context. P had been injured
by the negligence of Dl and D2. P first sued D2, who served a third party notice upon
Dl. Judgment was given in P's favour, the judge having found that P had sustained a loss
of about N.Z.$24,000. However, D2's liability was limited by statute to $15,000. The
comparative degrees of fault of D2 and Dl were assessed at 60% and 40%, respectively,
and Dl was ordered to pay contribution to D2 of 40% of $15,000. P then instituted a
second action, this time against Dl, in order to recover the difference between $24,000
and the $15,000 recovered in the first action against D2. Dl's liability to pay P this sum
was not disputed, but the question was whether Dl could recover 60% of it from D2 by
way of contribution. Dl argued that the judge in the first action had erred because he
ought to have apportioned between Dl and D2 the full $24,000, provided only that D2
could never have been required to pay more than $15,000. The Court of Appeal refused
to consider whether the judge had erred in the way contended by Dl. It denied Dl's claim
for contribution on the ground that D2 had ceased to be liable to P as a result of
satisfying the judgment entered against D2 in the first action. When Dl paid under the
judgment in the second action, he did not thereby discharge any existing liability to P
owed by D2.

165

One possible solution to the problem raised above is to adopt the view
taken by the English courts and the Supreme Court of Canada towards the
interpretation of legislation that differs in some significant respects from the
present Ontario Negligence Act. New legislation could provide that if P had
instituted legal proceedings against D2 that had resulted in a judgment in
D2's favour that rendered the issue of D2's liability to P res judicata between
them, then D2 could not subsequently be held liable to contribute to Dl.
Since the principal reasons for this view are the restitutionary nature of the
right to contribution and the public interest in discouraging multiple suits
and in not reopening questions already litigated, thereby exposing litigants
to "double jeopardy", it should generally make no difference whether P's
action failed because of delay or some other "technical" reason, or on more
substantive questions of D2's liability to P.

The English Law Commission proposed that a person who, after a trial,
has been found not Hable to the injured person "on the merits" should not
subsequently be liable to pay contribution to a concurrent wrongdoer. ^^ The
requirement that the judgment in D2's favour should be "on the merits" was
intended to exclude collusive judgments^ ^ and the dismissal of a proceeding
for want of prosecution or on the ground that it had been brought outside
the limitation period within which P must enforce his rights against D2. The
Law Commission took the view that if P's action against D2 had failed
because P had not succeeded in establishing that D2 was ever liable, D2
ought not to be placed in a position of double jeopardy by being forced to
relitigate the substantive issues.^^

This matter is dealt with in the English Civil Liability (Contribution)
Act 1978 P section 1(5) of which provides that a judgment in an action
brought by P against D2 "should be conclusive in the proceedings for
contribution as to any issue determined by that judgment in favour of
[D2]". This is presumably intended to implement the English Law Commis-
sion's recommendation, although whether it is appropriately worded so as to
have this effect has been doubted. ^"^ The Law Commission of Hong Kong

Law Commission Report, supra, note 37, paras. 62-65, at 19.

^' For an example, see Corvi v. Ellis, [1969] S.C. 312 (Ct. of Sess.). What the Commission
had in mind was the institution of proceedings against D2 for the sole purpose of
precluding a subsequent claim for contribution by Dl: it will be recalled that a
settlement between P and D2 leaves D2 exposed to the possibility of a claim for
contribution by Dl in the event that D2 settled for less than his proportionate share of
the liability.

^^ See, generally, Law Commission Report, supra, note 37, paras. 60-67, at 18-20.
^■^ Supra, note 36.

'^^ If this provision is read literally and in isolation, it might be argued that Dl could not
reopen a finding that P's action failed because D2's liability had become statute-barred.
However, s. 1(5) should be read in conjunction with s. 1(3), which provides that it is no

166

has adopted the English Law Commission's recommendation in this
respect.^^

The Alberta Institute for Law Research and Reform has also recom-
mended the adoption of the English Law Commission's resolution of these
issues. ^^ Thus, the Institute concluded that "it is preferable for Dl to lose his
claim for contribution than that D2 should be required to defend himself
twice". A judgment in favour of D2 would not, however, bar a claim for
contribution in cases where P's action had failed because it was commenced
after any relevant limitation period had run in D2's favour, or where the
plaintiff's action had been dismissed for want of prosecution, or where
judgment was obtained as a result of collusion between P and D2. Section 13
of the Canadian Uniform Contributory Fault Ac f is similar to section 1(5)
of the English Act of 1978, but, unUke the English legislation, the Uniform
Contributory Fault Act makes no specific provision for the effect upon
contribution claims of the running of time in D2's favour against P. It also
limits the scope of the estoppel to "any issue that has been determined on its
merit in the action".

The advantages of this view are that it effectively protects D2 from
"double jeopardy" and avoids the waste of resources involved in allowing
the relitigation of issues. To the extent that it denies a right of contribution
against a person who can no longer be sued by the injured person when P
institutes proceedings against or settles with Dl, it is consistent with the
restitutionary nature of the claim. On the other hand, of course, it deprives
Dl of a right that he would otherwise have had if P had not sued D2, and
imposes upon Dl the cost of the failure of P's action against D2, to which Dl
was not a party and over which he had no control. The exceptions to the rule
contained in the English Act of 1978, the Alberta Institute's Report, and
section 13 of the Uniform Contributory Fault Act attempt to minimize this
disadvantage by confining it to judgments made "on the merits".

A second approach, at the opposite end of the spectrum, would be a rule
that the existence of a judgment in favour of the person from whom
contribution is claimed should never be relevant to the liability of that
person to pay contribution. The inquiry on the contribution claim would be
confined to determining whether D2 ought to have been held liable to P. For
this purpose, it should be open to Dl to produce evidence or legal argument
to persuade the court of D2's liability (whether or not this material had been
put before the court that determined P's action against D2), even though

defence to a contribution claim that D2 has ceased to be liable to P. Dl could thus argue
that D2 cannot rely upon the expiry of the limitation period as a defence to Dl's claim.
The drafting is not, however, satisfactory and departs from that proposed by the Law
Commission.

^^ See paras. 6.5-6.9, at 33-35, of the Hong Kong Report, supra, note 37. It was, however,
critical of the drafting of the 1978 Act on this point.

^^ Alberta Report, supra, note 40, at 76, Recommendation 18.

Supra, note 38.

167

such a conclusion would be inconsistent with the judgment in the litigation
instituted against D2 by P.

However, a special consideration arises if P's action failed against D2
because it was commenced after the expiry of the limitation period govern-
ing the enforcement of P's rights against D2. The Commission has already
recommended that D2 should be required to contribute, even though, at the
time when P settled with Dl or commenced proceedings against Dl, D2
could no longer be sued by P.^^ It follows, therefore, that Dl's claim for
contribution will not be defeated by D2's establishing that P's action against
him was properly dismissed as being out of time.

The advantage of this view is that it prevents Dl from being prejudiced
by the conduct of P after he sustained the loss for which Dl and D2 were
initially liable. It protects Dl from any adverse consequences of litigation to
which he was not a party and puts him in the same position as he would have
been if P had not sued D2. Of course, D2 may succeed in satisfying the court
in the contribution proceeding that he had been correctly found riot liable
toP

A third approach is reflected in the Irish Civil Liability Act, 1961 ,^^
which contains an elaborate set of provisions that are designed to avoid the
most obvious injustices likely to be caused to Dl by the first approach, and
to D2 by the second. First, section 29(5) of the Act provides that, where Dl
and D2 are joined as parties-defendant to P's action, and P's action against
D2 is dismissed, Dl is bound by any findings of fact and law upon which the
judgment in D2's favour was based. However, Dl is not estopped from
subsequently asserting that D2 was a wrongdoer if P obtained judgment in
fraud of Dl or if the proceedings took place in a foreign jurisdiction in which
Dl was denied an opportunity either to present evidence and legal argument
designed to establish D2's liability to P, or to launch or to oppose an appeal
against the judgment in the litigation between P and D2. In addition, under
section 29(2), if Dl is joined as a third party to the suit between P and D2, Dl
is bound by any finding of fact and law in the action on which he was given
leave to defend. Where Dl was not a party to P's proceeding against D2,
section 29(8) of the Act provides that it is no defence to a contribution claim
that D2 had been unsuccessfully sued by P.

This last provision, however, must be read in the light of section 35(l)(j),
which reduces the damages recoverable by P from Dl if Dl can establish
that, despite an earlier judgment in favour of D2 in an action brought
against him by P, both Dl and D2 were concurrent wrongdoers. P is thus
identified with D2 and the damages that he can recover from Dl are reduced
by an amount proportionate to the degree of fault that should have been
attributed to D2. This solution removes from both Dl and D2 the harsh

^^ See supra, this ch., sec. 2(c).
^^ Supra, note 44.

168

consequences of P's previous unsuccessful suit against D2, by penalizing the
injured person. Moreover, it discourages a multiplicity of proceedings by
giving P a strong incentive to proceed against Dl and D2 in a single action.
The objection to this scheme is, of course, that it makes P worse off than he
would have been if Dl's wrongful conduct had been the sole cause of P's
injury.

(d) Conclusions

The Commission does not favour the solution to this problem con-
tained in the Irish Act. The avoidance of unfairness to Dl and D2 is
purchased at the expense of the injured party. In our view, the adjustment of
the secondary rights and duties of the wrongdoers should not be effected by
frustrating a cardinal policy of the law respecting the primary right of the
injured person to be compensated fully for the injury caused by the defen-
dants' wrongful conduct. It is true that the plaintiff may avoid this unfortu-
nate consequence by proceeding against Dl and D2 in a single action, but
the penalty prescribed for P's faiUng to do this is unduly onerous. The
Commission has already proposed sanctions that it believes may appropri-
ately be imposed in order to encourage P to join all concurrent
wrongdoers. ^^ Moreover, to increase further the pressure upon P to sue all
possible defendants together may add unreasonable elements of complexity,
delay, hazard, and cost to P's ability to obtain relief. P's right to compensa-
tion shguld be neither substantively reduced nor procedurally burdened by
the presence of more than one wrongdoer.

The choice thus lies between, on the one hand, exposing D2 to "double
jeopardy" by reopening matters already litigated to judgment between P
and D2, and, on the other, depriving Dl of the right to contribution that he
would have enjoyed if P had not sued D2 and lost. Whichever view is
adopted may cause hardship and violate a particular poHcy of the law.

In chapter 5, the Commission took the position that if Dl claims
contribution after settling with P, D2 should not be able to defend the claim
on the ground that Dl ought not to have settled because Dl was not liable to
P^^ In addition, in chapter 6 we recommended that, if Dl is successfully sued
by P, it should not be a defence to any claim for contribution pursued in an
independent action for D2 to prove that Dl ought not to have been held
liable to P, except where the judgment against Dl was obtained by collusion
or fraud. ^^

^^ See supra, ch. 2, sec. 4(a).

^^ See supra, ch. 5, sec. 3(b).

^^ See supra, ch. 6, sec. 2. However, in the contribution action, D2 would be entitled to
show that the court wrongly assessed the quantum of the injured person's loss in Pv.Dl.

169

If D2 cannot reopen a settlement between Dl and P or the liability of
Dl, as determined in Pv.Dl, then we believe that Dl should be bound by the
result of the litigation between P and D2. Since Dl's payment has conferred
no benefit upon D2 that it would be unjust for him to retain, the costs
involved in permitting further litigation of the same issues outweigh the
benefit of attempting to achieve some rather nebulous notion of a fair
apportionment of P's loss between Dl and D2. Moreover, to require D2 to
defend a second trial may be regarded in the circumstances as especially
harsh, particularly when judgment was given in D2's favour on a ground
inconsistent with D2's ever having been liable to P.

Accordingly, the Commission recommends that it should be a defence
to a claim for contribution for the contributor to establish that judgment on
the merits has already been given in his favour in an action by the injured
person. ^^ This proposal should not apply, therefore, to the dismissal of the
injured person's action for delay. ^"^ We also recommend that such a judg-
ment should not be a defence to a contribution claim where it was obtained
by collusion or fraud. ^^

Moreover, we wish to re-emphasize our support of the provisions in the
Irish Act that make it clear that Dl is bound by any finding made in an
action by P against both Dl and D2, as co-defendants. If Dl is brought into
the action as a third party, he would also be bound by a finding made in the
main action on which he has been given leave to contest. ^^ Since P will often
join all concurrent wrongdoers as defendants, and since, where he does not,
Dl can normally be expected to serve a third party notice, the problem
discussed in this part of the chapter may, in any event, arise only rarely.

4. THE EFFECT UPON THE RIGHT TO CONTRIBUTION OF A
SETTLEMENT, RELEASE, OR WAIVER BY P OF D2'S
LIABILITY

This Report has already considered the contribution implications of a
settlement between one wrongdoer and the injured person. It was concluded
that a settlement that still left another wrongdoer liable to be sued by the
plaintiff should not protect the settling wrongdoer from a subsequent claim
for contribution in the event that he had been able to settle with P for a sum
less than an amount of P's loss that was proportionate to his due share.

^3 Draft Act, s. 14(l)(c).
^"^ Ibid., s. 15(b).
^5 Ibid., s. 14(2).

See supra, ch. 6, sec. 2. This may already be the law in Ontario: Kirk v. Faugh, [1951]
O.W.N. 745 (H.C.J.). See, now, Rules of Civil Procedure, supra, note 17, r. 29.05(5),
which also provides that a third party who does not deliver a statement of defence to the
main action is also bound by an order or determination made in the main action
between the plaintiff and the party claiming contribution.

170

The Commission recommends that, even though the concurrent
wrongdoer (D2) who settled with P, or to whom P gave a release or waiver,
may have ceased to be liable to P by the time that Dl claims contribution, Dl
should nonetheless be entitled to contribution for a sum proportionate to
D2's proper share.^^ The settlement, release, or waiver will merely have the
effect of reducing Dl's liability to P. The Commission has taken the view that
to apply a strictly restitutionary approach in this context would give P too
much power to decide who should ultimately bear the loss.

Recommendations

1. (1) It should never be a defence to a claim for contribution for the

contributor to establish that his liability to the injured person had
ceased to be enforceable by reason of the failure of the injured
person to comply with a procedural requirement, the expiry of a
statutory limitation period, dismissal of the injured person's action
for delay, or an analogous equitable bar upon a successful suit by
the injured person. The contributor should not be protected from
Uability to contribute, even if he had ceased to be capable of being
successfully sued by the injured person when that person com-
menced proceedings against or settled with the person claiming
contribution.

(2)^ Should the recommendation in paragraph (1) be enacted, those
' governmental officials responsible for the administration of stat-
utes requiring notice of a claim to be sent to an alleged wrongdoer
should review the nature and purpose of the statutory notice
requirements in order to determine whether they are of overriding
importance and, therefore, whether they ought to be made to apply
notwithstanding the Commission's Contribution and Comparative
Fault Act.

2. It should be a defence to a claim for contribution for the contributor to
establish that proceedings were instituted by the injured person against
the claimant, or a settlement was made between them, after the expiry
of a limitation period contained in a contract made between the
contributor and the injured person before the latter 's cause of action
arose against the contributor.

3. (1) It should be a defence to a claim for contribution for the contribu-

tor to establish that judgment on the merits has already been given
in his favour in an action by the injured person, except where the
judgment was obtained by collusion or fraud.

Draft Act, s. 15(d). For a recent decision affirming that this is already the law, see Re
Urquhart and Halt, supra, note 10.

171

(2) The recommendation in paragraph (1) should not apply where the
injured person's action was dismissed for delay.

It should never be a defence to a claim for contribution for the
contributor to establish that he had ceased to be liable to the injured
person by virtue of a settlement made with, or a release or waiver of
liability given by, the injured person after that person's cause of action
against him arose.

CHAPTER 8

THE ASSESSMENT OF
CONTRIBUTION

1. INTRODUCTION

The previous chapters of this Report have considered the cir-
cumstances in which a right of contribution should arise among concurrent
wrongdoers who have caused a single loss to an injured person. In addition,
they have canvassed the principal defences that should be available to a
person against whom a right of contribution is asserted. In this chapter, we
assume that a right of contribution has been established, and examine the
principles that should govern the amount that the contributor ought to pay.

The task of quantifying D2's liability to Dl can be broken into a series of
more specific questions. The first is to decide to what sum Dl and D2 are
required to contribute; this we shall refer to as the "contributable sum". A
second relevant consideration is the persons among whom the contributable
sum should be divided. A problem that can arise in this context is that not all
those liable to the plaintiff may be parties to the litigation in which the claim
for contribution is made. In calculating how the loss ought to be divided
among those who are parties, should account be taken of the existence of
other wrongdoers who are not before the court? After determining the
contributable sum and the number of parts into which it is to be divided, the
last question concerns the quantification of each of those parts. In other
words, on what basis should the court decide how much each of those liable
to contribute is required to pay?

2. THE CONTRIBUTABLE SUM

(a) General

The situation considered throughout this Report is one in which the
wrongful conduct of two or more persons has caused a single or indivisible
loss to another. It is only in respect of damages for this loss that a right of
contribution can arise. If it is possible to identify some element of the
damage suffered by the injured person for which one wrongdoer (Dl) is
solely hable, then that person will have no reason for requiring others to bear
that portion of the liability • Since no one else is legally liable to compensate

' See Katzman v. Yaeck (1982), 37 O.R. (2d) 500, at 504-07, 136 D.L.R. (3d) 536 (C.A.),
where the injuries originally sustained in a motor vehicle collision, negligently caused by

[173]

174

the injured person for that item of her loss, any payment made by Dl to P in
discharge of this liability confers no benefit upon anyone else. However, a
defendant may claim contribution in respect of that part of the plaintiff's
loss for which another is concurrently liable with the defendant.

An item of P's loss may be attributable solely to one wrongdoer because
it is clear on the facts that her conduct alone caused it. But differences that
result from the operation of rules of law of general application may also
produce differences in the damages recoverable from the various wrong-
doers. For instance, exemplary damages may be awarded against one
defendant, but not the other.^ Differences in the rules relating to remoteness
of damage in tort actions and actions based on breach of contract may also
result in a lower liability for one defendant. A fiduciary who profits from her
breach of duty may be required to disgorge, even though the beneficiary of
the relationship could not have made the profit for herself, and could not be
said otherwise to have suffered a loss equal to the fiduciary's gain.^ Only in
respect of the injured person's loss may the fiduciary and another be
concurrently liable.

In each of the circumstances described above, the sum to which the
parties may be required to contribute is limited to that for which they are
both liable. Not only does their common liability provide the amount
beyond which they cannot be required to contribute, but the proportion of
the liability attributable to their degree of fault is calculated as a percentage
of this amount. On the other hand, if the liability of one concurrent
wrongdoer is limited by the operation of a partial defence apphcable to that
person, then, according to the recommendations made in chapter 6, the
contributable sum is calculated by reference to the parties' full liability to
the plaintiff, and the limitation serves only to determine the maximum sum
that the party with the limited liability can be required to contribute.
Contractually or statutorily limited liability and the partial defence of

the defendant, were increased by the negligence of the dentist, the third party, who
subsequently treated her.

On the award of punitive damages generally, see Waddams, The Law of Damages
( 1983), ch. 1 1. Punitive damages, or damages for mental distress, have not generally been
regarded as recoverable for a breach of contract {Addis v. Gramophone Co. Ltd. , [1909]
A.C. 488 (H.L.)), but courts in Canada appear to be retreating from this position more
quickly than English courts. For two recent statements of the growing willingness of
Ontario courts to recognize this head of recovery, see Pilato v. Hamilton Place Conven-
tion Centre Inc. (1984), 45 O.R. (2d) 652, at 663-64, 7 D.L.R. (4th) 342 (H.C.J.)
(wrongful dismissal), and Thompson v. Zurich Insurance Co. (1984), 45 O.R. (2d) 744,
at 750-53, 7 D.L.R. (4th) 664 (H.C.J.). See, also, Waddams, supra, this note, at 576-78.

See, however, Vorvis v. Insurance Corp. of British Columbia (1984), 53 B.C.L.R.
63, 9 D.L.R. (4th) 40 (C.A.), where a majority adhered to the view taken in the older
authorities. See, too, Attorney-General for Ontario v. Tiberius Productions Inc. (1984),
46 O.R. (2d) 152, 8 D.L.R. (4th) 479 (H.C.J.).

Reading v. Attorney-General, [1951] A.C. 507 (H.L.) and Boardman v. Phipps, [1967] 2
A.C. 46 (H.L.) are the leading authorities.

175

contributory negligence that may be available to one defendant, but not the
other, provide the most obvious examples.'*

The reason for treating the latter cases differently from those consid-
ered in the previous paragraph is that, in the examples given in that
paragraph, the defendants were not concurrent wrongdoers in respect of the
larger sum for which only one was liable. On the other hand, the conduct of
a person whose liability is limited by one of the special defences considered
in the immediately preceding paragraph is still a legal cause of the injured
person's loss. Her liability is limited, not because she is not a wrongdoer in
respect of the whole loss, but because the plaintiff's conduct has reduced the
damages recoverable. The defendants may be legally liable for causing the
same loss, but the damages payable by way of compensation are different.

We turn now to consider some problems of calculating the sum to
which concurrent wrongdoers must contribute when their wrongful con-
duct has caused a single loss for which they are liable to the injured party in
the context of both settlements and successive judgments.

(b) Settlements

(i) General

As we have already seen, an individual who has settled with the injured
person may recover contribution from others who are liable for the loss.^
The Commission has recommended that this right should be retained,
whether or not the settlement effectively bars the injured person from suing
others in respect of the loss to which the settlement related.^ The question
considered here is the sum to which the person from whom contribution is
claimed (D2) following a settlement between P and Dl should be required to
contribute.

One view would be that it is for the court in the contribution claim to
decide the amount for which Dl and D2 could have been held legally liable
to pay to P by way of damages, and that this is the sum upon which the
parties' proper share should be calculated. The justification for this view is
that the purpose of contribution is to apportion between Dl and D2 their

The consequences for the right of contribution of the availability of one of these defences
to a concurrent wrongdoer are described supra, ch. 6, sec. 3(d). In a recent case, it was
said that a party whose liability to the injured person has been reduced as a result of a
partial defence of contributory negligence likely cannot be required to contribute more
than the amount to which her liability has thereby been reduced: Acrecrest Ltd. v. WS.
Hattren& Partners, [1983] Q.B. 260, at 280-81, [1983] 1 All E.R. 17 (C.A.), overruled on
other grounds by Governors of the Peahody Donation Fund v. Sir Lindsay Parkinson &
Co. Ltd., [1985] 1 A.C. 210, [1984] 3 W.L.R. 953 (H.L.).

Supra, ch. 5, sec. 2.

Supra, ch. 5, sees. 3(a) and (c).

176

common liability to P, and that in order to ensure that neither is unjustly
enriched at the expense of the other, the benefit obtained by D2 as a result of
Dl's discharge or reduction of D2's liability to P should be used as the
amount in respect of which contribution may be required. An opposing
argument would be that to require Dl to quantify with precision the liabiHty
of Dl and D2 to P would be unduly onerous, and would tend to discourage
settlements. For if Dl settled with P on the basis of a sum that exceeded the
total liability, then Dl would be forced to absorb the excess. It may be too
generous to D2 to allow her to stand aside from the settlement, and then to
contest a claim for contribution on the ground that Dl had settled for too
high a figure.

An example will illustrate the choices. Suppose, for instance, that P's
claim was for $10,000, but that she accepted from Dl the sum of $8,000 as a
final settlement of her claim against Dl and any other person against whom
she could have proceeded in respect of the injury. Dl then claims contribu-
tion from D2, who admits that Dl and D2 are equally at fault, but argues
that P would not have recovered more than $7,000 if she had instituted legal
proceedings against the wrongdoers. Should Dl be required to prove the
exact amount that P would have been awarded if she had sued, or should Dl
be able to rely upon the amount of the settlement as the proper figure? On
the first view, Dl would recover $3,500 and would have to absorb the
amount by which she overestimated her liability to P. On the other view, Dl
would recover $4,000 and thus force D2, although no more at fault than Dl,
to pay a sum greater than half of her liability as would have been determined
by the court. These extreme positions do not, of course, exhaust the
possibilities: a compromise between the competing considerations outlined
above might produce a rule that required Dl to prove that the amount for
which she settled was a reasonable estimate of the common liability. A
solution that is more favourable to Dl's interest would regard the settlement
figure as a presumptively correct assessment of P's recoverable loss, and
place upon D2 the burden of proving that it was excessive.

The fact situation considered above may be varied by postulating a case
in which P sued D2 after she had made a settlement with Dl that did not
prevent P from suing other wrongdoers liable for P's loss. This could occur if
Dl purported to settle only her own share of the liability, or if the agreement
was not expressly made in final settlement of all the actions that P might
have against others, and the settlement figure was less than P's recoverable
loss or Dl's payment was not forthcoming. In the litigation between P and
D2, the court will determine P's recoverable loss; D2's liability will be
calculated by deducting from this figure the amount that Dl paid P under
the settlement. If Dl later claims contribution from D2, should D2's
contribution be assessed with reference to the settlement figure or the figure
at which the court in P's action against D2 fixed P's recoverable loss? What if
D2 claims contribution from Dl by making her a third party to the main
action? Should Dl be bound by the court's assessment of P's loss, even if it is
less than the settlement figure?

177

(ii) The Present Law

The relevant provision in the Negligence Act'' is section 3. This section
provides that a tortfeasor who has settled with the plaintiff may recover
contribution from any other tortfeasor "who is, or would if sued have been,
liable in respect oUhe damage. . .". The party claiming contribution under
this section is required to "satisfy the court that the amount of the settlement
was reasonable, and in the event that the court finds the amount of the
settlement was excessive it may fix the amount at which the claim should
have been settled".

The Act, therefore, does not limit Dl to claiming contribution on the
basis of the exact amount of P's legally recoverable loss; it does, however,
place the onus of proving the reasonableness of the settlement figure upon
Dl, who will normally be able to discharge this burden by leading evidence
from which the court can approximate what P would have recovered if she
had instituted legal proceedings. In determining the reasonableness of a
settlement figure it is relevant to take into account any amount by which P's
damages would have been reduced as a result of her contributory
negligence.^ Once Dl has established the reasonableness of the settlement
figure, the burden of proving that it was excessive shifts to D2. If the court
finds that the settlement figure was excessive, D2 will only be required to
contribute to the sum fixed by the court as that at which Dl ought to have
settled P's claim. However, the Commission has previously proposed that a
claimant who settled when she was not liable at all should not necessarily
have the amount of the contributable sum reduced to zero. Such a result
would negative the right of such persons to claim contribution, and would
undermine the policy of encouraging settlements upon which the Commis-
sion has based its recommendation that Dl should be able to claim contribu-
tion even though she could not have been sued successfully by the injured
person.^ Indeed, a person who settled when she was not liable to the injured
person should normally be entitled to an indemnity from those whose
liability was thereby discharged.

The Act does not deal specifically with the application of section 3 to a
situation where P's recoverable loss has already been quantified in legal
proceedings instituted by P against D2, to which Dl was not a party. One
possibility is that a court would simply apply section 3 in such a case exactly
as it would have done if the common liability had not been determined in a
prior legal proceeding at a figure lower than that on which the settlement
between P and D2 was based. The language of section 3 would certainly
support this conclusion, and it could also be argued that Dl's right to
contribution should not be reduced by the institution of legal proceedings by

"^ Negligence Act, R.S.O. 1980, c. 315.

^ Nesbitt V. Beattie, [1955] O.R. Ill, [1955] 2 D.L.R. 91 (C.A.).

^ Supra, ch. 5, sec. 3(b).

178

P against D2 to which she was not a party. Of course, if D2 brought Dl into
the action by a third party claim, Dl would be entitled to contest the
quantum of P's damages and would be bound by the judicial determination
of the question. On the other hand, it may be argued that to calculate D2's
contribution by reference to a figure that is higher than that for which she
has been held legally liable is unfair, and is inconsistent with the restitution-
ary basis of contribution.

(iii) Other Jurisdictions

The principal bases upon which the contributable sum could be deter-
mined in a claim made following a settlement have already been outlined.
This section provides a brief survey of the ways in which this problem has
been dealt with in other jurisdictions.

0. Final Settlement

The Irish Civil Liability Act, 1961 '^ contains a provision, section 22(1),
that is substantially similar to section 3 of Ontario's Negligence Act. The
Alberta Institute of Law Research and Reform has recommended the
adoption of the Ontario formula. •' Section 12(3) of the Uniform Contribu-
tory Fault Act, adopted by the Uniform Law Conference of Canada, '^ is
worded slightly differently: it states that the sum to which D2 is required to
contribute following a settlement between P and Dl, which releases all the
claims that P may otherwise have had, should be based on the lesser of the
value of the consideration actually given for the release and the value that
"in all the circumstances. . .it would have been reasonable to give for the
release". However, it is unlikely that this wording would in practice produce
any significantly different results from those that would follow from the
formula suggested by the Alberta Institute and already contained in the
Ontario Act. The American Uniform Comparative Fault Act^^ restricts the
right to recover contribution to claims made following a total settlement,
and then only "to the extent that the amount paid in settlement was
reasonable".

A Working Paper published in 1983 by the Contracts and Commercial
Law Reform Committee of New Zealand has recommended that Dl should
be able to recover contribution based upon the amount of her settlement

'^ Civil Liability Act, 7967, No. 41.

'^ Alberta, Institute of Law Research and Reform, Contributory Negligence and Concur-
rent Wrongdoers, Report No. 31 (1979) (hereinafter referred to as "Alberta Report"), at
55-56.

^^ Uniform Law Conference of Canada, Proceedings of the Sixty-Sixth Annual Meeting
(1984), Appendix F, Uniform Contributory Fault Act .

^^ National Conference of Commissioners on Uniform State Laws, Uniform Comparative
Fault Act, Uniform Laws Annotated, Vol. 12 (1987 Pocket Part), §4(b).

179

with P, provided that the settlement was reasonable "having regard to all
factors that influenced the settlement", and that "D2 is liable to P for an
amount equal to or exceeding the amount claimed by Dl by way of
contribution". ^"^ This second requirement may limit the occasions on which
Dl is able to use the settlement figure as the basis on which the loss should be
apportioned, and may often require Dl to establish the precise amount of
the parties' concurrent liability.

The English Civil Liability (Contribution) Act 1978^^ differs from the
measures considered in the previous paragraphs, in that it does not expressly
provide that a claimant for contribution who has settled with the injured
person must prove that the settlement figure was reasonable. Thus, section
1(4) provides that contribution may be claimed by a "person who has made
or agreed to make any payment in bona fide settlement or compromise of
any claim made against him" by the injured person.

It is doubtful whether the omission of any express requirement that the
settlement figure must be reasonable is likely to produce results that are
materially different from those found in cases under the formula contained
in the Ontario Negligence Act . Indeed, in making the recommendation that
became section 1(4) of the 1978 Act, the English Law Commission thought
that its proposal took "roughly the same line" as the Irish Act, and noted
that section 22(1) of that Act "does not seem to have given rise to any
difficulties or been the subject of criticism in the Republic of Ireland".'^
There is judicial authority for the proposition that a claim for damages for
breach of contract may be quantified by reference to the amount for which
the plaintiff settled a claim made by a third party only if the settlement
figure was reasonable. '^ A settlement for an amount substantially in excess
of the damages that the injured person would have recovered had she sued
might well not be regarded by a court as bona fide. If this inference were
drawn, then the result would seem to be that Dl could not claim contribu-
tion at all, a result that might be considered unduly harsh.

Some have thought, however, that the choice between the English and
the Ontario solutions may have practical consequences. The Law Reform
Commission of Hong Kong, for example, decided not to recommend the
adoption of an explicit requirement that Dl establish the reasonableness of
the settlement figure, on the ground that "a claimant would be required to

'"* New Zealand, Contracts and Commercial Law Reform Committee, Working Paper on
Contribution in Civil Cases (1983) (hereinafter referred to as "New Zealand Working
Paper"), at 17.

'5 Civil Liability (Contribution) Act 1978, c. 47 (U.K.).

'^ The Law Commission, Law of Contract: Report on Contribution, Law Com. No. 79
(1977) (hereinafter referred to as "Law Commission Report"), paras. 56-57, at 17.

'^ Biggin & Co. Ltd. v. Permanite Ltd., 119511 2 K.B. 314, 11951] 2 All E.R. 191 (C.A.).

180

prove the measure of damages strictly, which would involve a very compli-
cated and expensive enquiry".'^ It noted that D2 was adequately protected
from being required to pay an excessive amount as a result of either a
collusive agreement between P and Dl, or a gross overestimate of the
amount of Dl's liability, by the requirement that the claimant must establish
the bona fide nature of the settlement. For similar reasons, the English
House of Commons defeated an amendment proposed to the 1978 Bill that
sought to insert an express requirement that the settlement figure must be
reasonable.

b. Partial Settlement

Law reform measures in other jurisdictions appear not to have
addressed the question of how to determine the sum to which the parties
may be required to contribute following a settlement by one concurrent
wrongoder that still leaves others exposed to an action by the injured person.
Some jurisdictions have avoided the problem by denying a right to contribu-
tion in such circumstances.'^ But, for reasons advanced in chapter 5, the
Commission has decided that a claim for contribution should be available
on the basis of a partial settlement.^^

(iv) Conclusions

a. Final Settlement

The Commission has decided to recommend that a formula similar to
that already contained in section 3 of the current Negligence Act should be
retained in any new statute that extends the right to contribution among
concurrent wrongdoers, irrespective of the legal nature of the civil obliga-
tion owed to the injured person.^' This formula appears to have worked
satisfactorily in the past, and it is difficult to see why the extension of the
right of contribution to include concurrent contract breakers and fiduci-
aries should make any difference. If the notion of a bona fide settlement
implies that the settlement figure must be reasonable, then it is surely better
that the requirement should be made express. In addition, this would keep
the Ontario position in line with the Canadian Uniform Contributory Fault
Act}^ The Commission believes that to require the claimant for contribu-

'^ The Law Reform Commission of Hong Kong, Report on the Law Relating to Contribu-
tion Between Wrongdoers, Topic 5 (1984), para. 5.11, at 26. The issue is discussed more
generally in paras. 5.9-5.13, at 25-27.

'^ See, especially, Alberta Report, supra, note 11, at 61, Recommendation 13, and the
Canadian Uniform Contributory Fault Act , supra, note 12, s. 12(2).

^^ Supra, ch. 5, sec. 3(c).

See the Commission's proposed Contribution and Comparative Fault Act (hereinafter
referred to as "Draft Act"), s. 11. The Draft Act appears as an Appendix of this Report.

^^ Supra, note 12.

181

tion to establish to the court's satisfaction the reasonableness of the settle-
ment figure neither unduly complicates the litigation of the contribution
claim, nor effectively deters the making of compromises or settlements
between the injured person and one of the potential defendants. Accord-
ingly, we recommend that where contribution is sought on the basis of a full
settlement made between the injured person and the claimant, the contribu-
tion payable by the contributor should be calculated by reference to the
value of the consideration given for the settlement, which the claimant must
establish it was in all the circumstances reasonable for her to give.^^

If the claimant does not establish that the consideration actually given
was reasonable, the contribution payable by the contributor should be based
on the court's determination of the value of the consideration that it would
have been reasonable for the claimant to have given.^"^

Where the claimant for contribution has settled the injured person's
claim by performing services or delivering goods, then the court in contribu-
tion proceedings should be required to value these in order to determine
whether the claimant has settled for a reasonable amount.^^

b. Partial Settlement

Suppose that Dl has settled with P in a way that does not preclude the
possibility that P may later sue D2 for the balance of the loss in respect of
which the settlement was made. However, before legal proceedings are
instituted against D2 by P, Dl claims contribution from D2. A question to be
considered in chapter 9 is whether a person should be able to recover
contribution before she has discharged more than the share of the common
liability that should fairly be borne by her. Subject to this, however, we
recommend that the amount of contribution payable in this hypothetical
should be calculated by reference to the same principles as those proposed
above for final settlements. In other words, the court should decide whether
the settlement figure was reasonable and, if it was, D2 should be required to
contribute to it.^^ If P subsequently sues D2 successfully or settles with D2,
and D2 pays a sum that is more than her fair share of the common liability,
D2 should be able to recover from Dl by way of contribution the amount by
which this sum exceeds D2's fair share.-^^

23 Draft Act, s. 11(1).

2"* Ibid.,s. 11(2).

25 Ibid., s. 9(7).

2^ Ibid., s. 10(1) and (2). Often, of course, if P has merely settled with Dl for her estimated
share of the loss, the settlement figure will be significantly less than P's recoverable loss.
In this case, the settlement figure will be the sum to which D2 will be asked to contribute.

2^ For a provision to this effect, see the Irish Civil Liability Act, 1961 , supra, note 10,
s. 22(2).

If the settlement between P and Dl included a promise by P to indemnify Dl
against further claims in respect of the loss, Dl would normally be able to pass on to P

182

Where P institutes legal proceedings against D2 before Dl claims
contribution, and D2 joins Dl as a third party in order to claim contribu-
tion, the contributable sum should be the amount of their common liability
as determined by the court in that action.^^ The following hypothetical will
illustrate the operation of this proposal. Suppose that Dl settles with P for
$10,000 in a way that allows P to proceed against D2. P does indeed sue D2
for that portion of her claim for damages that was not satisfied by the
settlement, and then D2 makes a third party claim against Dl. The court
finds D2 liable, and calculates P's total loss at $30,000. Judgment is entered
against D2 for this amount, less the $10,000 already paid by Dl under the
settlement. The court further finds that Dl and D2 are equally responsible
for P's loss. It follows from the recommendations made in chapter 5 that D2
is entitled to a contribution of $5,000 from Dl, so that each ultimately will
have paid $15,000 towards P's loss. At the end of the day, Dl has not been
able to reduce her liability by making an advantageous settlement with the
injured person, unless, of course, she has received an indemnity from P.
There will be no inquiry in such a case as to whether the settlement figure
represented a reasonable estimate of Dl's proper share of P's recoverable
loss. A reason for denying to Dl the latitude that the Commission has
recommended should be extended to a person who makes a final settlement
of all the injured person's claims is that full settlements deserve more
encouragement than those that do not dispose, once and for all, of the need
for further litigation by the injured person.

Let us suppose that the facts of our hypothetical are changed somewhat,
so that the effect of the judgment is that P's total recoverable loss is
calculated to be only $15,000, for which Dl and D2 are again found equally
responsible. Dl has settled with P for $10,000. Having been joined as a third
party by D2, Dl has crossclaimed for contribution from D2 in the event that
she is held to have settled for more than her proper share. Judgment will be
entered in P's favour against D2 for $5,000. If the contributable sum is the
amount of the common liability to Dl and D2 as determined by the court,
then Dl will be entitled to a contribution claim of $2,500. To regard the
settlement figure as the contributable sum where Dl has overestimated her
liability to P would be unfair, especially since she is not permitted to benefit
from a settlement that is for less than her due proportion of P's loss, as
determined by a court.

The situation may be complicated if the claim for contribution is made
in an independent action, and not by way of a third party proceeding to the
main action. In such a case, we recommend that the contributable sum
should be the amount of the common liability as determined by the court in
the independent action.^^ Thus, suppose that Dl settled P's claim for $500 in
a way that did not bar P's action against a concurrent wrongdoer, D2. When

the cost of the contribution. The amount of the sum that Dl was liable to contribute
would then be of importance to P.

28 Draft Act, s. 10(4).

29 Ibid., s. 10(3).

183

P sues D2, P's loss is found to be $1,500, and judgment is entered against D2
for this sum, less the $500 already paid to P under the settlement with Dl.
D2 did not issue a third party claim, but proceeds in a separate action
against Dl.^o In this proceeding, Dl ought to be able to establish that their
true liabiUty to P was only $1,000, and if Dl and D2 are equally at fault, D2
will recover no contribution. This resuU may seem unjust to D2 who has had
to pay more than Dl, even though they have been found equally at fault;
however, to allow D2 to base her claim for contribution on the amount that
she was held liable to pay P would mean that Dl would be prejudiced by the
outcome of litigation to which she was not a party.

On the other hand, D2 ought not to be able to claim that the true
amount of their concurrent liability was for a sum greater than that
determined by the court when P sued D2. Thus, in the above example, if
judgment was awarded in P's favour against D2 for $1,500, D2 should not be
able to argue in subsequent contribution proceedings that their "true"
liability was $2,000 ($1,500 plus the $500 paid to P by Dl), of which she has
paid $1,000, and that she is therefore entitled to $500 as contribution from
Dl. D2 has, after all, had an opportunity to litigate her liability, and the
matter has been judicially determined. Her recovery should be limited to
$250, so that each will bear an equal share of the sum in which D2 has been
held liable to P. The way in which the contributable sum should be appor-
tioned will not have been judicially determined before D2 sues Dl, and
therefore it will be assessed in that litigation by the court, without regard to
any assumption about her due share of the liability upon which Dl settled
with P

Finally, we recommend that, if the terms of the settlement provide for
the performance of services or the delivery of goods, these should be
required to be valued by the court in order to determine the amount of
contribution recoverable.^'

It may be difficult to determine the sum to which concurrent wrong-
doers are required to contribute when the injured person institutes separate
actions against them. The courts that decide the two cases may calculate
differently the damages recoverable by P Suppose, for example, that P sues
Dl, who does not issue a third party claim against D2, and judgment is
entered against Dl for $10,000. If Dl does not satisfy this judgment, or P
believes that the damages awarded did not fully compensate her for her loss,
a separate action may be instituted against D2.''2 Suppose that in the action

^^ For the circumstances in which this may be possible, see supra, ch. 9, sec. 2(a)(v); for the
Commission's recommendations that they should be extended, see supra, ch. 9, sec.
2(c).

^' Draft Act, s. 9(7).

^^ It will be recalled that, under the present law, concurrent wrongdoers who are only
severally liable can be sued separately, and that the plaintiff's damages may be assessed

184

by P against D2, to which Dl is not joined as a third party, P's loss is
calculated to be only $5,000. If Dl satisfies P's judgment and D2 does not, is
the sum to which D2 may be required to contribute $5,000 or $10,000?

Fortunately, there have been few occasions for problems of this kind—
the product of a multiplicity of litigation from a single loss— to arise in
Ontario.^^ This is largely because Ontario courts have generally required
claims for contribution, following a judgment against the contribution
claimant, to be made in third party proceedings. The great merit of this
procedural requirement, first imposed in Cohen v. S. McCord& Co. Ltd.,^^
is that it ensures that one court will decide conclusively, in a single proceed-
ing, such questions as whether D2, as well as Dl, is liable to P and, if so, the
amount of P's recoverable loss, and the basis upon which it is to be
apportioned. The result will be binding upon the plaintiff, the parties-
defendant, and those joined as third, fourth, or subsequent parties. How-
ever, it is unclear whether the Ontario courts' interpretation of the present
Negligence Act will be upheld in this respect in the Supreme Court of
Canada, or whether it will be applied by Ontario courts to a situation where
a jurisdictional limit on the court in which the plaintiff commenced her
proceedings prevents the defendant from joining a concurrent wrongdoer as
a third party. The exclusive jurisdiction of the Federal Court of Canada over
the liability of the federal Crown, and the apparent constitutional incompe-
tence of that Court to entertain proceedings in which a claim is based on
provincial law,^^ have already raised the possibility that multiple litigation
can arise from a single accident, transaction, or loss, with the attendant
danger that the courts dealing with discrete parts of the claims may reach
inconsistent results. ^^

The possibility of multiple lawsuits may also be increased if the Com-
mission's recommendation is accepted that the rule forbidding the institu-

in the second action at a higher figure than they were in the first. The Commission has
recommended that this common law rule should be applied to cases of joint liability as
well: supra, ch. 2, sec. 4(b).

^^ An analogous problem under the present law can arise when both P and Dl have
suffered a loss in a single accident— a multiple vehicle collision, for example. Suppose
that Dl first sues D2 for the damage caused to Dl's car by D2; the court finds that D2
was liable, but reduces Dl's damages because she was contributorily negligent as to 25%.
P then sues Dl, who joins D2 as a third party. If the court finds that Dl and D2 were both
liable for P's injury, are they bound by the finding in Dl's action against D2 as to their
respective degrees of fault?

An affirmative answer was given in Kirk v. Faugh, [1951] O.W.N. 745 (H.C.J. ).
There are decisions from other Commonwealth jurisdictions going both ways. See, for
example, Bell v. Holmes, [1956] 1 W.L.R. 1359, [1956] 3 All E.R. 449 (Q.B.); Marginson
V. Blackburn Borough Council, [1939] 2 K.B. 426, [1939] 1 All E.R. 273 (C.A.) (prior
findings binding); Randolph v. Tuck, [1962] 1 Q.B. 175, [1961] 1 All E.R. 814; dind Jackson
V. Goldsmith (1950), 81 C.L.R. 446 (H.C.) (prior finding not binding).

^"^ [1944] O.R. 568, [1944] 4 D.L.R. 753 (C.A.).

But see discussion supra, ch. 2, note 97.

^^ Supra, ch. 2, sec. 4(a).

185

tion of independent actions for claiming contribution should be relaxed. ^"^
The abolition of the judgment bar rule may also have the same effect.^^
However, it would be a mistake to overestimate the practical consequences
of these proposed changes: a plaintiff will normally wish to join as many
defendants to her action as she can, and it will generally be in the interests of
those who are joined to have questions of contribution decided conclusively
at the same time as their liability to the plaintiff is determined. Defendants
are, therefore, still likely to claim contribution from their co-defendants and
to issue third party claims against those whom the plaintiff has not pro-
ceeded. Thus, despite the theoretical difficulty of the issues considered in
this part of the chapter, it is unlikely that the courts will have to deal with
them with any frequency.

It will be recalled that, in chapter 6, we recommended that, if Dl is
successfully sued by P, it should not be a defence to any claim for contribu-
tion pursued in an independent action for D2 to prove that Dl ought not to
have been held liable to P,^^ except where the judgment against Dl was
obtained by collusion or fraud, although D2 would be entitled to show that
the court wrongly assessed the quantum of the injured person's loss in P v.
Dl . While a principle enshrining the sanctity of litigation, as envisaged
above, can help to some degree to resolve claims to contribution advanced
subsequent to P's separate successful actions against Dl and D2, such a
principle cannot always deal adequately with successive judgments. Having
regard to our proposal in chapter 6, it is clear as a general principle that,
where a claim for contribution is made, neither Dl nor D2 would be entitled
to open up the question of their liability to P. Put simply, each has already
had her day in court on this issue, and no problem arises if, in the
contribution action, the court were to accept their liability as having been
conclusively established in the earlier litigation.

Such is not the case, however, where the courts that decided P v. Dl and
P V. D2 assessed P's damages differently. Obviously, here the finality of
litigation is impossible to achieve.

Accordingly, the Commission recommends that, where the injured
person has obtained judgment against concurrent wrongdoers in separate
proceedings and the damages of the injured person have been assessed
differently, in a claim for contribution by one wrongdoer against another

^^ This procedural question is considered fully in chapter 9 of this Report.

^^ Supra, ch. 2, sees. 2(a) and 4(a).

^^ See supra, ch. 6, sec. 2, and Draft Act, s. 8(1). In chapter 7, we considered the reverse
situation— that is, where Dl seeks to open up P's prior unsuccessful litigation against
D2— and recommended that it should be a defence to a claim for contribution for the
contributor to establish that judgment on the merits has already been given in her favour
in an action by the injured person, except where the judgment was obtained by collusion
or fraud.

186

wrongdoer the court should be required to determine the sum to which the
parties to the contribution claim shall contribute, without reference to the
findings on damages in the earlier litigation. "^^

3. THE DIVISION OF THE CONTRIBUTABLE SUM: WHO
MUST CONTRIBUTE?

Having determined the sum to which concurrent wrongdoers may be
required to contribute, the next question concerns the division of this
amount. The issue considered here is the number of portions into which the
sum must be divided. The next section considers the principles for deter-
mining the size of each of these portions.

It has been recommended in this Report that the principle of m solidum
liability should be retained as an important protection for those injured by
others' wrongful conduct.^' The person who has sustained the loss may
recover the full amount of her damages from any one of a number of
wrongdoers liable for the loss and, if she sues only one, she is not restricted to
recovering from that person the part of her loss proportionate to the fault of
the individual whom she has sued.

A right of contribution may therefore arise among those sued to
judgment by P and anyone against whom a third party claim has been made.
In addition, a person may claim contribution in an independent action
following either a settlement or, in unusual circumstances, a judgment
against her in an action to which she did not join the contributor as a third
party. The entire loss will be divided among those sued, and the share
attributable to a person who has not been made a party to any legal
proceedings will be ignored. However, where one person is liable for
another's wrong, the joint tortfeasors should count for this purpose as one.
Thus, if P is injured by the tort of Dl in circumstances that make D2
vicariously liable, and by the tort of D3, then, if D3 is equally responsible
with Dl for the loss, Dl and D2 will be liable between them for 50 percent
and D3 for 50 percent.

Difficulties may also arise, although reported cases are very few, when
P omits to sue one wrongdoer and that wrongdoer is not made a third party
by the defendant, perhaps because neither P nor those whom she sued knew
her identity or whereabouts. Thus, suppose that Dl, D2, and D3 are equally

Draft Act, s. 8(2). See Transit System, Inc. v. Slingland, 266 F. 2d 465 (D.C. Cir. C.A.
1959), where P, in separate actions, obtained judgment against Dl for $15,000 and
against D2 for $10,000. Dl and D2 were held equally at fault, and P executed the
judgment for the larger amount. D2 was held to be liable to contribute that part of the
judgment against her that the larger judgment bore to the sum of the two judgments.
The following formula was used:

llgx $10,000 = $6,000
Supra, ch. 3.

187

responsible for P's loss. P sues Dl who joins D2 as a third party. Dl and D2
are adjudged to be equally at fauh, and Dl satisfies P's judgment in full. Is it
open to D2 to argue that she is only hable to contribute up to one third of the
damages because D3 is equally at fault? Or should the presence of D3 be
ignored for this purpose, so that Dl is able to recover one half of the damages
by way of contribution from D2? Or should Dl be able to recover from D2
two thirds of the damages, on the ground that she (Dl) was only one third at
fault? Lastly, it has been suggested that if D3's degree of fauh is ignored, then
it ceases to be practicable to determine the respective degrees of fault of the
parties to the action, with the result that Dl and D2 must be deemed equally
at fauh by virtue of section 5 of the Negligence Act, ^^ whether or not Dl was
more or less culpable than D2.^^

The Commission is of the view and, accordingly, recommends that in
determining contribution among concurrent wrongdoers, the degree of
fault attributable to an absent concurrent wrongdoer should be ignored, and
100 percent of the fault should be allocated among the parties before the
court."^"* To attempt to apportion the fault that should be borne by D3 may
well be both unjust and inconvenient. If D3 is never sued, because her
identity or whereabouts cannot be estabUshed, it would be unjust to Dl to
restrict her claim from D2 to one third of the common liability to P, and
unjust to D2 to allow Dl to recover two thirds from her. To divide the
contributable sum between Dl and D2 on the basis that they are 100 percent
at fault recognizes their comparative culpability, and, of course, provides an
incentive for them to add D3 as a fourth party. Should D3 later appear, and
it is procedurally possible for contribution to be claimed other than after a
settlement or by way of a third party notice, then Dl and D2 would be
entitled to contribution from her.'*^

A variation on the theme of the "missing wrongdoer" may be found in
the following situation. Suppose that P, Dl, and D2 are all equally respon-
sible for P's loss, but that P sues only Dl. Should a court apportion the fault
between P and Dl and reduce P's damages by half, with the possibility that P
may sue D2 later and that Dl might be able to recover contribution from
D2? Or should P's damages be reduced by only one third, which represents
her proper share of responsibility if account is taken of the existence of D2?
Or, lastly, should P obtain judgment against Dl for only one third of her
damages, on the ground that Dl was only one third to blame?

^^ Section 5 reads as follows:

5. If it is not practicable to determine the respective degree of fault or negligence
as between any parties to an action, such parties shall be deemed to be equally at
fault or negligent.

^'^ Cheifetz, "The Missing Tortfeasor: A Problem in Fault Apportionment under the
Ontario Negligence Act" (1977-78), 1 Advocates' Q. 270. The author discusses the
question further in his book, Apportionment of Fault in Tort (1981) (hereinafter referred
to as "Cheifetz"), at 22-23 and 106-10.

^ Draft Act, s. 12.

^^ This is the solution contained in the Irish Civil Liability Act, 1961, supra, note 10, s. 25.

188

The current law in Ontario is not altogether clear. There are certainly
dicta that support the view that 100 percent of the fault should be appor-
tioned between P and Dl on the basis of their proper share inter se.^^ On the
other hand, in Colonial Coach Lines Ltd. v. Bennett,'^'' Laskin J.A., by way
o^ dicta, said:

[A] defendant found to be at fault and disappointed in his expectation of having
a co-defendant share, as between themselves, a portion of the liability to an
injured plaintiff may well be disentitled to shift additional blame to a plaintiff
who has been already fixed with a percentage of fault.

In other words, according to Laskin J.A., if a court finds that P was 10
percent responsible for her loss, Dl, 50 percent, and D2, who was not sued,
40 percent, then Dl will have judgment against her for 90 percent, and has
the burden of attempting to recover from D2 the 40 percent attributable to
her.

It is not proposed, however, to pursue this question further in this
chapter, since it relates principally to the apportionment of loss between
the injured person and a wrongdoer. It is considered in chapter 10, which
deals with contributory negligence and a number of the contribution
consequences."*^

The other problem to be mentioned is the effect that the insolvency of
one wrongdoer may have upon the division of the contributable sum. The
Commission has already recommended that, where there are two wrong-
doers, the solvent one should bear the entire loss, but that, where there are
more than two, the share of the insolvent wrongdoer should be divided
among the wrongdoers in proportion to their share of the fault. The plaintiff
should not be required, irrespective of whether or not she was contributorily
at fault, to bear the burden of the insolvency in proportion to her own
culpability."*^

4. THE DIVISION OF THE CONTRIBUTABLE SUM:
QUANTIFYING THE PORTIONS

(a) The Present Law

The final question considered in this chapter is the amount that those
who are liable to contribute should be required to pay towards the contribut-
able sum. The Ontario Negligence Act provides in section 2 that each of two

47
48
49

Bennctto and Bennetto v. Leslie and Werhw 11950] O.R. 303 (H.C.J. ); St. Catharines
FIving Club v. The Citv of St. Catharines, [1953] O.R. 393 (C.A.); Roustauskas v.
Wilson, [1952] O.W.N. 441 (H.C.J. ); and, semble, Paquette v. Batchelor (1980), 28 O.R.
(2d) 590, 1 1 1 D.L.R. (3d) 642 (H.C.J. ).

[1968] 1 O.R. 333, at 341, 66 D.L.R. (2d) 396 (C.A.).

Supra, ch. 10, sec. 5.

See supra, ch. 3, sec. 4.

189

or more tortfeasors who have caused damage to an injured person and are
found to have been at fault or negligent is liable in solidum, 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". Thus, while a person's
tortious conduct may be only one of several causes of the plaintiff's loss,
provided that it was one of the causes in law, the plaintiff is entitled to
recover the full amount of her loss from that person alone. However, by
showing that the tortious conduct of others also contributed to the plaintiff's
loss, the defendant may be able to distribute part of that loss to those others.
It becomes relevant at this stage to determine the degree of fault that can be
attributed to each of the wrongdoers who are before the court.

Section 3, as we have seen, deals with the right to recover contribution
by a person who has settled with the injured person. The section does not
expressly provide that the sum awarded is to be based upon an evaluation of
the parties' respective degrees of fault, but this is surely implicit. In the event
that it is not practicable for the court to quantify the degree of fault or
negligence attributable to each of the tortfeasors, section 5 provides that the
parties to the claim for contribution are regarded as equally at fault, and that
the contributable sum is to be divided equally between or among them. This
section applies whether the claim is made following a judgment or a
settlement.

No significant legal difficulties appear to have been experienced with
the operation of the apportionment principles currently contained in the
Negligence Act . Courts approach the question by considering the compara-
tive fault of the tortfeasors, and assessing the extent to which each deviated
from the standard of conduct by which their liability is determined. ^^

For the purposes of contribution, a court may fix the proportion of
fault attributable to the parties to the claim. The task of quantifying degrees
of fault is essentially factual in nature. Where the trial is before judge and
jury, it is for the jury to decide how the liability should be apportioned.
Appellate courts are reluctant to disturb findings made at trial on this
question, in the absence of a clear error of principle or an apportionment
that is unreasonable or manifestly erroneous. Thus, in Taylor v. Asody,^^
Dickson J. (as he then was), dissenting, said:

Apportionment of fault is primarily and properly a matter within the
discretion of the trial judge who has, as has so often been pointed out, the great
advantage of seeing and hearing the witnesses, of observing demeanour, noting
nuances of expression, detecting dissimulation — [EJxcept in a strong and

^^ Many of the cases are collected in Cheifetz, supra, note 43, at 99-105. For a recent
example, see Consumers' Gas Co. v. The Corp. of the City of Peterborough and
Peterborough Utilities Comm., [1981] 2 S.C.R. 613, 129 D.L.R. (3d) 507, in which it was
held that a negligent tortfeasor was not entitled to an indemnity from a defendant (who
was found to have been more at fault) to whom the claimant also owed a duty of care.

^' [1975] 2 S.C.R. 414, at 423, 49 D.L.R. (3d) 724 (emphasis added) (subsequent reference
isto[1975]2S.C.R.).

190

exceptional case , an appellate court will not feel free to substitute its apportion-
ment of fault for that made by the trial judge unless there has been palpable and
demonstrable error in appreciation of the legal principles to be applied or
misapprehension of the facts by the trial judge.

A somewhat broader appellate standard of review may be applied in non-
jury actions where the dispute concerns the inferences to be drawn from the
evidence, rather than a question of credibility. ^^

The cases in which the scope of section 5 has been discussed contain
little that is not evident from a reading of the statute itself. ^^ For example, it
has been held that the power to apportion fault equally where it is not
practicable to determine specific degrees of fault does not release the court
from first deciding whether the parties were liable at all to the original
person. ^"^ It may not be practicable to ascribe a specific degree of fault
because the evidence is insufficiently cogent to reach a final conclusion
about the relevant events or conduct. ^^ Similarly, the parties' conduct may
have been so inextricably intertwined that it is not practicable to assess the
culpability of each separately. ^^ It is not certain whether section 5 should
apply to a case in which it is clear that the parties were not equally to blame,
but where the jury is unable to agree how their respective degrees of unequal
fault should be quantified. The appropriate procedure in such a case may be
to order a new trial. ^^ Whether an apportionment is "practicable" is a
question of fact to be decided on the balance of probability.

(b) Reforming the Law

(i) General

No doubt there will be many cases in which judges or juries experience
real difficulty in apportioning liability among tortfeasors. The reason is that
the exercise necessarily contains elements of subjective judgment and
appreciation, not to say a degree of arbitrariness, which may in part explain
why appellate courts have been reluctant to overturn assessments made at

^^ See, generally, Cheifetz, supra, note 43, at 286-97.

^^ They are briefly discussed by Cheifetz, ibid. , ch. 4.

^^ Waring v. Jarvis, [1956] O.W.N. 661 (C.A.), and Binda v. Waters Construction Co. Ltd.
andHunchuk (1960), 24 D.L.R. (2d) 431 (Man. C.A.).

It may be impracticable to attribute a determinate degree of fault to the parties because
the evidence given by witnesses is incomplete or lacking in credibility {Taylor v. Asody,
supra, note 5 1, at 424), or because the evidence, while credible, is not sufficiently clear to
enable a court to draw an inference with the appropriate degree of confidence {Potan v.
Keleher (1975), 9 O.R. (2d) 289, at 298, 60 D.L.R. (3d) 217 (C.A.)).

Malenfant and Beetham v. McKee and Taylor, [1953] O.WN. 652 (C.A.), at 655, rev'd
on other grounds [1954] S.C.R. 651.

Magee v. Johnson, [1954] O.WN. 141 (Co. Ct.).

191

first instance. It will often be the kind of issue upon which more than one
view can reasonably be held. The institutional characteristics of an appellate
court do not guarantee that the quality of the decision will be sufficiently
improved to justify a redetermination.

There are two considerations that suggest that the legal basis for
apportioning the loss ought to be reviewed in this Report. First, the
Negligence Act currently contains a rather narrower criterion than that
found in other jurisdictions, including those in which the question has
recently been re-examined. Secondly, if the recommendations in this
Report are accepted, and the scope of the right to contribution is expanded
so that it potentially applies to all concurrent wrongdoers, and not just
tortfeasors, then the current basis of apportionment may be inadequate to
deal satisfactorily with the new range of situations to which it will have to be
applied. It should also be remembered that, until quite recently, it was
widely thought that the Negligence Act applied only to the tort of negligence
or, at most, to torts in which negligent conduct is an element. ^^ There is little
evidence about the way in which the apportionment provisions of the
Negligence Act apply to intentional torts and torts of strict liability.^^

No doubt litigation involving negligent defendants is likely to continue
to provide the overwhelming majority of cases in which respective degrees
of fault will have to be apportioned. Nonetheless, there will be occasions in
which the court will be required to determine how liability should be
apportioned among those whose liability, for example, in tort or contract, is
strict, or based on negligence or intentional conduct. Should it be an
invariable rule that the wrongdoer whose liability to the injured person does
not depend upon some negligence or morally culpable conduct should be
entitled to contribution from a person who has been negligent? And is the
negligent wrongdoer invariably entitled to contribution from the inten-
tional wrongdoer, and, if not, how should the loss be apportioned? When the
Hability of one concurrent wrongdoer depends upon breach of contract,
comparative fault may prove to be both too elusive and too narrow a
standard to provide satisfactory solutions.^^

The almost limitless range of fact situations in which an apportionment
of Hability will have to be made inevitably suggests that this is an area where
the Legislature should leave considerable discretion to the court of original

^^ Supra, ch. 4, sec. 3(a)(ii).

^^ For a recent example in which the court held dishonest tortfeasors liable for 90% of the
plaintiff's loss, and those who had been negligent, 10%, see Anderson and G. W.Anderson
Holdings Ltd. v. Stevens (1981), 125 D.L.R. (3d) 736, [1981] 5 W.W.R. 550 (B.C.S.C).

^^ Some of these questions were considered in the New Zealand Working Paper on
Contribution in Civil Cases, supra, note 14. In that Working Paper, the New Zealand
Contracts and Commercial Law Reform Committee tentatively proposed that the
difficulties could be minimized by confining the right of contribution to wrongdoers
whose relationship created "any sort of legal or moral duty or obligation as between
them" {ibid., at 11). However, the insuperable task of defining this condition precedent
led the Committee to abandon it. See, generally, paras. 3.1-3.6, at 10-15.

192

jurisdiction, and where appellate courts should be slow to substitute their
judgment for that of the judges of first instance. Having said this, however, it
is still necessary to consider to what extent the discretion should be struc-
tured. Detailed rules may be impracticable, but a listing of the factors to be
taken into account may be feasible. Ease of application may support a very
narrow range of considerations that a court is directed to consider; multiple
factors not only expand the scope of the inquiry by increasing the matters
that are relevant, but also may present difficult questions of assessing the
weight to be given to them, and deciding whether some factors should be
more important than others and, if so, which ones. One facet of justice is the
formulation of rules that can be applied reasonably easily, predictably, and
efficiently, so that the costs of administration do not outweigh whatever
improvement there may be in the quality of decisions made in individual
cases.

(ii) Approaches to Reform

It is relevant to note at this point the recommendations contained in the
Ontario Law Reform Commission's recent Report on the Law of Trusts. ^^
Two aspects of the Commission's conclusions respecting contribution
among trustees, who are jointly and severally liable to a beneficiary for a
breach of trust, are of particular relevance here. First, the Commission
proposed that the court's power to order contribution should be broader
than it currently is: the court should not be limited to dividing the Hability
equally among the trustees, or, in the few situations in which equity does not
require this, to providing that one trustee must indemnify her co-trustees. It
recommended that these unduly rigid rules should be repealed. Secondly,
the Commission proposed a standard for apportioning the loss that is
different from that in the Negligence Act , and that may authorize the court
to consider a range of factors broader than comparative fault. Thus, section
54(1) of the Commission's proposed draft Trustee Act, which was contained
in its Report, provided as follows:

54.— (1) Subject to any express limitation of liability in the trust instrument
or to any express provision in the trust instrument as to contribution or
indemnity, the proportions in which co-trustees in breach of trust are liable as
between themselves for making good the loss to the trust or the amount of
contribution which may be recovered by a trustee from any co-trustee are such
as may be found by the Court to be just and equitable having regard to the extent
of the responsibility of each trustee in breach for the loss caused.

It will be recalled that section 2 of the Negligence Act requires appor-
tionment to be awarded "in the degree in which Dl and D2 are respectively
found at fault or negligent". As will become apparent from the following
discussion, comparative responsibility may be a broader concept than
comparative^aw// or negligence, and may thus require the consideration of
a wider range of factors.

^^ Ontario Law Reform Commission, Report on the Law of Trusts (1984), Vol. II, at 374-
87.

193

Section 2(1) of the United Kingdom Civil Liability (Contribution) Act
1978^^ provides that, subject to any limitation upon the liability of one
concurrent wrongdoer that is imposed by statute, contract, or by the
contributory negligence of the injured person, "the amount of the contribu-
tion recoverable from any person shall be such as may be found by the court
to be just and equitable having regard to the extent of that person's
responsibility for the damage in question". Subsection (2) makes it clear that
the court's power includes granting 100 percent contribution to one person
and requiring another to contribute 100 percent to the other concurrent
wrongdoers. These provisions implemented the recommendation of the
English Law Commission that the corresponding provision in section 6(2)
of the Law Reform (Married Women and Tortfeasors) Act, 1935^^ should be
retained and extended to all concurrent wrongdoers, whatever the legal
nature of their liability to the injured person. ^"^

English courts have held that the notion of "responsibility" requires
consideration of both the causative potency of the conduct that caused the
loss, and the comparative culpability of the parties.^^ It now seems as if the
courts attach greater weight to the second of these factors,^^ although at one
time there was a line of authority that made the degree of causation the only
consideration.^ '^ It would be wrong to overestimate the practical differences
that flow from preferring one factor over the other; the modern emphasis on
comparative fault may, however, be attributed to the difficulty of assessing
which conduct was the more closely causally connected to the injury.^^
Despite this latter difficulty, and any problem that there may be in deciding
which factor is the more important, it may be arguable that both should be
retained. Indeed, the American Uniform Comparative Fault Act^^ specifi-
cally directs the trier of fact, when determining the percentage of fault, to
consider "both the nature of the conduct of each party at fault and the extent
of the causal relation between the conduct and the damages claimed". ^^

^^ Supra, note 15.

^^ Law Reform (Married Women and Tortfeasors) Act, 1935, c. 30 (U.K.).

^"^ Law Commission Report, supra, note 16, paras. 68-69, at 20.

^5 Driver v. William Willett (Contractors) Ltd, [1969] 1 All E.R. 665 (Sussex Assizes)

^^ Maxfieldv. Llewellyn, [1961] 1 W.L.R. 1119, [1961] 3 All E.R. 95 (C.A.).

^^ See, for example, the judgments of Hilbery J. in Daniel v. Rickett, Cockerell & Co., Ltd.
and Raymond, [1938] 2 K.B. 322, [1938] 2 All E.R. 631, and Collins v. Hertfordshire
County Council, [1947] 1 K.B. 598, [1947] 1 All E.R. 633.

^^ The conceptual difficulties inherent in assessing comparative causative potency are
noted in Williams, Joint Torts and Contributory Negligence (1951), at 157; Chapman,
"Apportionment of Liability Between Tortfeasors" (1948), 64 Law Q. Rev. 26; and Klar,
"Contributory Negligence and Contribution Between Tortfeasors", in Klar (ed.),
Studies in Canadian Tort Law (1977) 145, at 156-57.

^^ Supra, note 13.

''^ Ibid, ^2{b).

194

Examples of situations where a comparison of the degrees of causation
may influence the amount awarded by way of contribution may include the
following. Suppose that scaffolding erected on a building site by Dl collapses
and injures P. The injury is caused by both Dl's failure to comply with the
relevant regulations, for which Dl is strictly liable, and the negligence of D2,
a contractor whose employee carelessly backed a truck into the scaffolding.
If the assessment were made strictly on the basis of comparative fault, then
Dl would be entitled to 100 percent contribution from D2, even though the
negligence imputed to D2 might well not have caused the collapse if Dl had
constructed the scaffolding in accordance with the regulations. Or suppose
that P has engaged D2 to design and build a boat, and has employed Dl to
supervise its construction and to inspect the finished product. The boat's
design is defective, and the boat is negligently built. Dl fails to notice the
defects when it is delivered to P. Even though there was no significant
difference in the extent to which Dl and D2 departed from their respective
duties of care, it may be appropriate to attribute more than half the
responsibility to the designer and builder. ^^

The Alberta Institute of Law Research and Reform chose "responsibil-
ity" as the criterion of apportionment. ^^ ^^ vvg h^ve seen, this allows a court
to consider both causation and fault. However, it decided to depart from the
formula found in the 1978 English Act by omitting any reference to a "just
and equitable" apportionment; it thought that these words conferred too
much discretion upon the court. ^^

If the test prescribed in the Ontario Negligence Act were retained and
applied to all cases of concurrent civil liabiUty, this would confine the court
to considering comparative degrees of fault. An obvious advantage of
limiting the court's consideration to comparative degrees of fault when
determining the amount payable by way of contribution is that Ontario
lawyers and judges are already famihar with this criterion, and there is no
evidence of any real difficulty with its application.

Section 21(2) of the Irish Civil Liability Act, 7967 ^'^— which, like the
recommendations made in this Report, extends the rights of contribution to
all concurrent wrongdoers— contains an amalgamation of the English and
the Ontario formulae. It provides that the amount of contribution recover-
able from any contributor shall be such as may be found by the courts to be

This and similar fact situations are discussed in the New Zealand Working Paper, supra,
note 14, where it is argued that a person whose "wrong" consists of not adequately
protecting the injured person from another's breach of duty should be regarded as less
responsible for the loss than the other: see para. 3.4, at 14, and, generally, paras. 3.1-3.6,
at 10-15.

Alberta Report, supra, note 11, at 77-78.

^^ The Institute appears only to have considered "just and equitable" as a standard
unqualified by a direction concerning the factors to which a court should have regard in
reaching its decision.

Supra, note 10.

195

"just and equitable"; however, in applying this standard, the courts are to
have regard "to the degree of the contributor's fault".

The Canadian Uniform Contributory Fault Act''^ appears to limit the
range of factors that a court may consider in apportioning the loss. It
provides that contribution is to be assessed in a way "that is proportionate to
the degree to which the wrongful act of the other concurrent wrongdoer
contributed to the damage". '^^ It is not altogether clear what this means,
although it may be interpreted as requiring the courts to consider only the
respective degrees of causation of the wrongdoers' conduct, and not their
comparative fault. If this is so, then it is difficult to understand the reasoning
underlying it, particularly given the well-documented problems likely to be
faced by the courts in determining the percentages of comparative causation
that should be attributed to the parties.

At the other extreme, the standard for apportionment might be framed
so as to give maximum discretion to the court by specifying no more than
that apportionment should be based on what is just and equitable in all the
circumstances. However, guidance in the exercise of the discretion could be
given by the compilation of an exhaustive or a non-exhaustive list of matters
to be taken into consideration. These would include the parties' compara-
tive fault and the causal potency of their conduct. Other factors that might
be considered are the extent to which one wrongdoer has profited from his
breach of duty,^^ and the respective ability of the parties to distribute the loss
efficiently— for example, through insurance.

In choosing from among the various models, described above, for
apportioning the loss among concurrent wrongdoers, a number of compet-
ing considerations have to be taken into account. First, the principles should
be both substantively just and appropriate, and consistent with the existing
bases of civil liability. One difficulty in formulating the applicable principles
with any precision is that it will not be easy to anticipate the variety of
situations in which the proposed extension of the right to contribution will
have to be applied. This leads to a second consideration: to what extent
should any legislation entrust trial judges, subject to a right to appeal that is
hkely to be narrow in scope, with discretion to develop the relevant
principles on a case-by-case basis? The need for discretion in this area has
been recognized in other jurisdictions, although there seems to be no

^^ Supra, note 12.

''^ Ibid.,s.S(\).

^^ This might be particularly relevant to those whose wrong consisted of a breach of
fiduciary duty, although it need not be confined to this category of civil liability One of
the exceptions to the equitable rule that trustees are entitled and liable to contribute
equally to a loss for which they are concurrently liable is that a trustee who has benefited
from the breach of trust is liable to indemnify the co-trustees. See Bahin v. Hughes
(1886), 31 Ch. D. 390 (C.A.), at 395-96.

196

consensus on the extent to which it is desirable or feasible to structure that
discretion. If flexibility and the ability to tailor the right to a wide and, in
part, unpredictable range of fact situations are the positive aspects of
discretion, there are also costs. These potentially include a lack of predicta-
bility, and inconsistency. In addition, considerable delays and expense are
likely to attend a statutory regime that authorizes courts to undertake
inquiries of wide and ill-defined scope about the parties and their conduct,
the result of which may prove inconclusive and unsatisfying.

The interests of ease of administration and certainty could be given
priority by providing that the loss should be apportioned equally between
the claimant for contribution and the contributor. However, we are satisfied
that this would be too blunt an instrument, and would often cause substan-
tial injustice by treating alike parties whose conduct requires that they
should be treated differently. The relevance of fault in imposing and
apportioning liability is too deeply embedded in the law of civil obligation to
be disregarded in this context. Nonetheless, equal division may be the only
course available when other criteria do not yield any other scheme of
apportionment. We therefore recommend the retention of a type of provi-
sion similar to that currently contained in section 5 of the Negligence Act.

As to the test to be applied by the court initially, we are of the view that
the formula now contained in the Negligence Act is inadequate and,
therefore, ought to be replaced. The power of the court to consider only the
comparative degrees of fault of the wrongdoers, thereby making any of the
other considerations mentioned above strictly irrelevant, is too narrowly
circumscribed. Even if, as may be argued, it would be disingenuous to think
that the notion of fault is not sufficiently flexible to allow a judge to view the
fact situation as a whole, we cannot see any reason why the legislation
should not provide clearly for such flexibility.

The "responsibility" test is, on the other hand, of sufficient flexibility to
permit a consideration of both the causative factor and the fault of the
parties. As we have seen, the United Kingdom Civil Liability (Contribution)
Act 1978 and the Alberta Institute of Law Research and Reform, as well as
this Commission, in its 1984 Report on the Law of Trusts, have adopted the
"responsibility", rather than the fault, test. Moreover, both the proposals of
this Commission in 1984 and the United Kingdom legislation go further by
recommending or providing that the amount recoverable in a contribution
action is such as may be found by the court to be "just and equitable",
having regard to the extent of the "responsibility" of each party.

We are of the view that this comprehensive approach— incorporating
the notion of a "just and equitable" determination in the context of the
"responsibility" test— is the appropriate one for Ontario. Unlike the Alberta
Institute, we do not beheve that giving the court power to make an order that
is "just and equitable" confers excessive discretion on the court. Rather,
such jurisdiction would allow the court to arrive at a more finely balanced

197

apportionment of liability. We believe this to be particularly important in
the light of our earlier proposal to extend a right to contribution beyond
concurrent tortfeasors to all concurrent wrongdoers.

Accordingly, the Commission recommends that the amount of contri-
bution recoverable from a concurrent wrongdoer should be such as may be
found by the court to be just and equitable, having regard to the degree of
responsibility of each concurrent wrongdoer for the damage caused. '^^ If the
degree of responsibility of a concurrent wrongdoer cannot be determined in
relation to another concurrent wrongdoer, they should be deemed to be
equally responsible.^^ The determination of the degree of responsibility
attributable to each party should be regarded as a question of fact. ^^

In chapter 4, the Commission recommended that the criminal nature
of the wrongdoing, the fact that it was committed intentionally or that the
damages paid by a defendant included a penal or punitive element, should
not automatically bar a right of contribution.^' We recommend here,
however, that such factors should be relevant to the court's exercise of its
discretion concerning the quantum of contribution awarded.

We wish to make one final comment on the proposed test to be applied
by the court in contribution proceedings. As we indicated in chapter 1,
section 2 of the present Negligence Act countenances a right to an "indem-
nity"—that is, 100 percent contribution— in such proceedings. This result
would, we believe, be all the more possible under the broader apportion-
ment test proposed in this chapter, since the court would be given a
relatively wide discretion to make a contribution award that is "just and
equitable", having regard not simply to the fault of Dl and D2, but rather to
their respective degrees of "responsibility". For example, while the fault
principle alone might dictate at least some recovery for a particular concur-
rent wrongdoer, it is envisaged that, under certain circumstances, that
wrongdoer may quite appropriately be entitled to no award whatsoever
where his responsibility for the loss far exceeds the very minimal degree of
fauh attached to the conduct of the other wrongdoer. Accordingly, we
recommend that, in determining the amount of responsibility of a concur-
rent wrongdoer, the court should be entitled to find any degree of responsi-
bility, including responsibility for none or all of the damage.^^

^^ Draft Act, s. 9(1).

''^ Ibid., s. 9(3).

^0 Ibid., s. 22.

^' Supra, ch. 4, sees. 3(a)(v) and 3(b)(iv)a.

^2 Draft Act, s. 9(2).

198

Recommendations

The Commission makes the following recommendations:

1. Where contribution is sought on the basis of a full settlement made
between the injured person and the claimant, the contribution payable
by the contributor should be calculated by reference to the value of the
consideration given for the settlement, which the claimant must estab-
lish it was in all the circumstances reasonable for her to give. If the
claimant does not estabUsh that the consideration actually given was
reasonable, the contribution payable by the contributor should be
based on the court's determination of the value of the consideration
that it would have been reasonable for the claimant to have given.

2. Where the claimant for contribution has settled the injured person's
claim by performing services or delivering goods, the court in contribu-
tion proceedings should be required to value these in order to deter-
mine whether the claimant has settled for a reasonable amount.

3. If a wrongdoer has settled the injured person's claim against him in such
a way that the injured person may proceed against those concurrently
liable with the settling wrongdoer, the contributable sum should be
calculated in the way described above, but,

(a) if a claim for contribution is made by or against the settling
wrongdoer by a third party claim incidental to an action brought
by the injured person against a concurrent wrongdoer, the contri-
butable sum should be the amount of their common liability as
determined by the court in that action; and

(b) if the non-settling wrongdoer is sued by the injured person, and
subsequently claims contribution from the settling wrongdoer in
an independent action, the contributable sum should be the
amount of the common liability as determined by the court in that
action.

4. If the terms of the settlement provide for the performance of services or
the delivery of goods, these should be required to be valued by the court
in order to determine the amount of contribution recoverable.

5. Where the injured person has obtained judgment against concurrent
wrongdoers in separate proceedings and the damages of the injured
person have been assessed differently, in a claim for contribution by one
wrongdoer against another wrongdoer the court should be required to
determine the sum to which the parties to the contribution claim shall
contribute, without reference to the findings on damages in the earlier
Utigation.

199

In determining contribution among concurrent wrongdoers, the court
should disregard the fact that some other person, who is not a party to
the contribution proceedings, might also be concurrently liable to the
injured person.

(1) The amount of contribution recoverable from a concurrent
wrongdoer should be such as may be found by the court to be just
and equitable, having regard to the degree of responsibility of each
concurrent wrongdoer for the damage caused.

(2) If it is not practicable for a court to make such an assessment, each
should be determined to be equally responsible and liable to pay an
equal amount by way of contribution.

(3) The determination of the degree of responsibility attributable to
each party to a claim for contribution should be regarded as a
question of fact.

(4) While the criminal nature of the wrongdoing, the fact that it was
committed intentionally or that the damages paid by a defendant
include a penal or punitive element, would not automatically bar a
right of contribution (see chapter 4, Recommendation 1(2)), such
factors should be relevant to the court's exercise of its discretion
over the quantum of contribution awarded.

(5) In determining the degree of responsibility of a concurrent wrong-
doer, the court should be entitled to find any degree of responsi-
bility, including responsibility for none or all of the damage.

CHAPTER 9

SOME PROCEDURAL
ASPECTS OF
CONTRIBUTION CLAIMS

L INTRODUCTION

In the previous chapters of this Report, we have considered the princi-
pal substantive aspects of claims to contribution among persons from whom
an injured person has a legal right to recover compensation for a single loss
that he has sustained. Thus, we have examined the circumstances in which a
claim for contribution may arise, the essential elements of the right, contri-
bution claims made following a settlement with the injured person, defences
that may be available to the person from whom contribution is sought, and
the principles governing the quantification of the amount of contribution
payable. In this chapter, we shall examine some procedural aspects of the
enforcement of the right to contribution.

We should point out that we do not propose to deal exhaustively with
every provision of the Rules of Civil Procedure' that relate to contribution
claims. For instance, a right to contribution based upon the concurrent
liability of civil wrongdoers for a single loss will normally be asserted
through a third party claim or, where the parties to a contribution claim are
co-defendants to the main action brought by the injured person, by a
crossclaim by one defendant against another. The procedures governing
these kinds of proceeding have recently been exhaustively reviewed, and the
product of that review is now to be found in the new Rules of Civil
Procedure.^ It would be inappropriate for the Commission to re-examine
the general features of the relevant procedures, even though claims for
contribution among concurrent wrongdoers are likely to prove one of the
most frequent kinds of claim to which these procedures will apply.

The Commission has therefore tried to isolate, and to focus its attention
upon, those aspects of civil procedure that appear to be unique, or virtually
unique, to claims for contribution among wrongdoers. The three topics
identified by the Commission as especially deserving of attention in this
project are the rule in Cohen v. S. McCord& Co. Ltd.,^ the limitation period

• Rules of Civil Procedure, O. Reg. 560/84.

^ On third party claims, see, generally, Rules of Civil Procedure, ibid., R. 29. Rule 28 deals
with crossclaims.

^ [1944] O.R. 568, [1944] 4 D.L.R. 753 (C.A.).

[201]

202

governing contribution claims, and the eariiest time at which an order for
contribution may be executed. Of these, the first is likely to be the most
controversial and important.

2. PROCEEDINGS FOR CLAIMING CONTRIBUTION

(a) The Present Law

A claim for contribution by one concurrent wrongdoer against another
may be made in a variety of procedural forms, the most important of which
may be outlined briefly as follows.

(i) Claims Against Co-Defendants

When P has made Dl and D2 co-defendants, and Dl claims contribu-
tion from D2, or Dl and D2 claim contribution for each other, under the
Negligence Act^ the claim must now be made by way of a crossclaim, which
must be included in the same document as the defence to the action.^ The
Rules of Civil Procedure in this respect largely codify the previous case law,
which had held that a claim for contribution under the Negligence Act made
by one co-defendant against another should not generally be made by the
issue of a third party notice.^ By making a crossclaim a necessary condition
for the assertion of a claim for contribution under the Negligence Act, it may
no longer be sufficient if the statement of defence, without expressly
including a crossclaim, alleges facts that make it clear that the claimant is
seeking to impute to a co-defendant responsibility for the plaintiff's loss,
and is claiming contribution.^

^ Negligence Act, R.S.0. 1980, c. 315.

^ Rules of Civil Procedure, supra, note 1, r. 28.01(2).

^ Thompson v. The Toronto Transportation Commission, [1947] O.W.N 920 (Sen. Master
S.C.O.); Samis v. Toronto Transit Commission, [1955] O.W.N. 523 (Sen. Master S.C.O.);
Randall's Paints Ltd. v. Tanner, [1969] 2 O.R. 169 (H.C.J.); and Dominion Chain Co.
Ltd. V. Eastern Construction Co. Ltd (1974), 3 O.R. (2d) 481 (H.C.J.), and (1976), 12
O.R. (2d) 201 (C.A.), at 220, aff'd {sub nom. Giffels Associates Ltd. v. Eastern
Construction Co. Ltd.) [1978] 2 S.C.R. 1346.

For an exception, see Attorney-General of Ontario v. Kibrick (1974), 4 O.R. (2d)
313 (C.A.), where the defendant was held to have properly issued a third party notice to
a person who had been named as a co-defendant to the plaintiff's action, but upon
whom the plaintiff had not served the writ. See, also. Slater Steel Industries Ltd. v. L C E.
Combustion Systems Inc. (1984), 46 O.R. (2d) 45 (H.C.J.), where third party proceed-
ings, commenced after the main action "had effectively died" as a result of separate
settlements between the plaintiff and the tortfeasors, were held to be an appropriate
procedure for a defendant to claim contribution from a co-defendant.

See, generally, Cheifetz, Apportionment of Fault in Tort (1981), at 86-91.

^ See, for example, Samis v. Toronto Transit Commission, supra, note 6, at 524, and Sgro
V. Verbeek (1980), 28 O.R. (2d) 712, HI D.L.R. (3d) 479 (H.C.J.).

203

The justification for dispensing with the need for a third party notice
had been found by the courts in the language of the Negligence Act. Thus, it
was said that by requiring a court to determine the degree of fault of each of
two or more persons found at fault, what is now section 2, by its very terms,
imposed a liability to pay contribution or indemnity accordingly. Moreover,
the power conferred by section 6 to permit another person to be added as
party defendant or third party is expressly limited to situations where the
person sought to be added is not already a party to the action. By implica-
tion, therefore, the procedural step of issuing a third party notice was
unnecessary where the person from whom contribution is claimed was
already a party to the plaintiff's action.

(ii) Claims Against a Plaintiff

After some initial hesitation, the Court of Appeal in Crowder v. Gra-
ham held that a defendant may claim contribution under the Negligence Act
from a plaintiff in the action without the necessity of serving either a
counterclaim or a third party notice.^ Contribution should normally be
claimed in the statement of defence. There is authority for the proposition
that the claim for contribution need not be expressly pleaded, provided that
the statement of defence makes the substance of the allegation and claim
clear, although a claimant for contribution who made his claim inferentially
has been denied costs. ^

When contribution is sought against a plaintiff in a capacity other than
that in which he is suing, it may be necessary to do so by a third party claim,
or by adding the contributor as a defendant to the main action. For instance,
in Emard v. Mason, ^^ the plaintiff sued the defendant under The Fatal
Accidents Act,^^ but in order to claim contribution from the estate of the
deceased, the defendant had to add the plaintiff as a defendant to the action
in his capacity as administrator of the estate.'^

^ Crowder v. Graham, [1961] O.W.N. 320 (C.A.) effectively narrowed the scope of the
statement in Carter and Carter v. Booth, [1956] O.W.N. 812, 6 D.L.R. (2d) 83 (C.A.) that
contribution should generally be claimed by way of a third party notice. Equally suspect
are cases in which it had been held that a counterclaim was the appropriate procedure
for claiming contribution from a plaintiff. See, for example, Burslem v. The Toronto
Transportation Commission, [1948] O.W.N. 369 (Sen. Master S.C.O.), and Heron and
Heron v. Pearce, [1956] O.W.N. 65 (Sen. Master S.C.O.), at 68.

^ Sgro V. Verbeek, supra, note 7. See, also, Durocher v. Tiffin, [1960] O.W.N. 185 (Master
S.C.O.).

[1943] O.W.N. 378 (H.C.J.).

^^ R.S.O. 1937, c. 210.

^^ But see Crowder v. Graham, supra, note 8, where the plaintiff sued for damages on
behalf of his injured child and in his personal capacity No third party notice was
required in order to enable the defendant to claim contribution under the Negligence
Act for a breach of the plaintiff's duty of care on the child's parent. Compare Arnold v.
Teno, [1978] 2 S.C.R. 287, 83 D.L.R. (3d) 609.

204

Under rule 27.01 of the new Rules of Civil Procedure,'^ a defendant
may assert a counterclaim against the plaintiff. The counterclaim must be
included in the same document as the statement of defence, ^^ and is not now
normally to be treated as an originating process. It should be noted that rule
27.01 appears to be of general application and contains no specific exemp-
tion for contribution claims made under the Negligence Act . It is possible,
therefore, that Crowder v. Graham will no longer be followed. '^

(iii) Claiming Contribution by Adding a Party to the Action

If the injured person has named only Dl as a defendant, and Dl believes
that he may be entitled to contribution from another whose wrongful
conduct was also a cause of the loss for which P is suing Dl, the normal
method of asserting this claim is by way of a third party claim. '^ Alterna-
tively, a person who may be liable for contribution, but who was not initially
made a defendant to the plaintiff's action, may be joined subsequently as a
party defendant.

The relevant statutory provision is section 6 of the Negligence Act,
which states:

6. Wherever it appears that a person not already a party to an action is or
may be wholly or partly responsible for the damages claimed, such person may
be added as a party defendant to the action upon such terms as are deemed just
or may be made a third party to the action in the manner prescribed by the rules
of practice for adding third parties.

In its original form, this provision applied only to the addition of
another as a party defendant, and not as a third party. ^^ Nonetheless, in
Sauriol v. Summers, ^"^ the Court of Appeal concluded, though neither
unanimously nor unhesitatingly, that a defendant could bring in another as

See, also, Peter v. Anchor Transit Ltd. (1979), 100 D.L.R. (3d) 37, [1979] 4 W.W.R.
150 (B.C.C.A.), where PI, an infant, and P2, his father, sued D for an injury suffered by
PI. D's defence was that P2 and Pi's mother were partly responsible for the accident. It
was held that a third party notice was required for the claim for contribution against the
mother, who was not a party, but not against P2.

'^ Supra, note 1.

''^ Ibid., r. 27.02.

^^ Note, too, that under r. 27.01(2), a defendant who is counterclaiming is permitted to join
as a defendant a person who is not a party to the main action. In this connection, see,
also, r. 27.03.

^^ When the tortfeasors are liable for distinguishable parts of the plaintiff's loss, the service
of a third party notice claiming contribution is inappropriate: Katzman v. Yaeck (1981),
33 O.R. (2d) 597, 125 D.L.R. (3d) 270 (H.C.J.). This decision was reversed on appeal on
the ground that the third party may have been concurrently liable with the defendant for
a part of the plaintiff's injuries: (1982), 37 O.R. (2d) 500, 136 D.L.R. (3d) 536 (C.A.).

The Negligence Act, 1930, S.O. 1930, c. 27, s. 6.

^^ [1939] O.R. 253, [1939] 2 D.L.R. 297 (C.A.).

205

a third party, even though a settlement made between the plaintiff and the
proposed third party had rendered the third party immune from a successful
suit by P. The Court held that the machinery provided in the Act for the
assertion of contribution claims between co-defendants was not clearly
intended to be the sole procedural mechanism for enforcing the substantive
right. An amendment to The Negligence Act in 1939'^ expressly provided for
the issue of a third party notice in such a case, and thus gave a more solid
foundation to the result reached in Sauriol.

Despite the breadth of the language of section 6, the courts have
regularly held that a person may not be added as a party defendant at the
instance of the defendant when the plaintiff objects. More explicit language
would be needed to exclude the common law principle that the plaintiff is
dominus litis and cannot be forced to sue a party against whom he chooses
not to proceed.^^ Whether this is an absolute rule or merely a general
principle to which there may be exceptions seems not to be a question of
much moment, given the consistency with which courts have refused to
depart from it. The only discordant note of any significance was struck by
Rose C.J.H.C. in Colville Cartage Co. Ltd. v. Smith Transport Ltd.,^^ where
he stated that, in the interests of procedural simplicity, persons not sued by
the plaintiff should normally be brought in at the instance of the defendants
as parties defendant and not third parties, where the sole purpose was to
enable the defendant to obtain contribution. In the event, however, the
Court did not disturb the decision below to add the respondents as third
parties; moreover, this was a case in which the plaintiffs were indifferent to
the capacity in which those served were brought into the action.

In order to add as a third party a person not sued by the plaintiff, the
defendant must show only that the proposed third party is or may be
responsible for the plaintiff's loss. A motion to strike out the addition of a
third party is not the appropriate vehicle for deciding a difficult question of
law upon which the primary liability of the third party may depend.-^ The
inability of the defendant to institute proceedings for contribution other
than through the third party procedure makes it particularly appropriate
that third party notices should not be lightly refused or set aside.^^ While a
person not named as a defendant by the plaintiff may not subsequently be

The Statute Law Amendment Act, 1939, S.O. 1939, c. 47, s. 23.

20 Timmins v. Taggart Services Ltd., [1940] O.W.N. 140, [1940] 4 D.L.R. 285 (H.C.J.);
Carter and Carter v. Booth, supra, note 8; and Krezanowski v. Scarborough, [1961]
O.W.N. 315 (Sen. Master S.C.O.).

[1944] O.W.N. 527 (H.C.J.), at 530.

22 Healy v. Runny mede Iron and Steel Co. , [1941] O.R. 133, [1941] 3 D.L.R. 325 (C.A.). See,
also, the decision of the Court of Appeal in Katzman v. Yaeck, supra, note 16. For an
unsatisfactory decision to the contrary, see Cameron v. The Corp. of the City of Glasgow,
[1936] S.C. 26, [1936] 2 All E.R. 173 (H.L.); this decision is criticized by Williams, Joint
Tortfeasors and Contributory Negligence (1951), at 181-82, and is specifically overturned
by the Irish Civil Liability Act, 1961, No. 41, s. 27(3).

23 Paul Papp Ltd v. Fitzpatrick, [1967] 1 O.R. 565 (C.A.), at 570.

206

joined as a party defendant if it is clear that the plaintiff cannot successfully
sue him to judgment, as we have seen he can nonetheless be added as a third
party. ^"^

An application to add a party under section 6 of the Negligence Act
should not be made until the applicant has filed a statement of defence.^^ A
third party notice may be served not only by the original defendant to the
plaintiff's action, but also by a plaintiff against whom the defendant has
claimed contribution.^^ Moreover, the third party may serve a notice upon
other persons, whether or not they were parties to the original action, thus
making them, in effect, fourth parties.^^ Fourth parties may also bring in
fifth parties, and so on.

In addition to disputing his own liability to the defendant on the
contribution claim, the third party may raise any defence available to the
defendant against the claim made by the plaintiff.^^ For if the defendant is
held not liable to the plaintiff, that will effectively preclude any Uability of
the third party to make contribution to the defendant. A third party who is
permitted to defend the main action is bound by any order or determination
made in it, as is a third party who does not deliver a statement of defence.-^^
The Rules of Civil Procedure now also permit a third party to counterclaim
against the parties to the main action. ^^

(iv) Claiming Contribution in an Independent Action

A defendant who has not been sued to judgment by the injured person
may claim contribution in an independent action. The relevant provision of
the Negligence Act is section 3, which states in part:

'^^ Sauriol v. Summers, supra, note 18.

^^ Timmins v. Taggart Services Ltd. , supra, note 20, and Emard v. Mason, supra, note 10.

2^ Judson V. Vasilaras and Town of Lindsay, [1971] 1 0.R. 290 (H.C.J.).

^^ Toronto Asphalt Roofing Manufacturing Co. Ltd. v. Plate and Structural Steel Sales
Lr^^., [1950JO.R. 335, [1950]D.L.R. 552 (C.A.), and Aetna Insurance Co. v.MojanLtee.
(1979), 27 N.B.R. (2d) 356, 106 D.L.R. (3d) 286 (C.A.).

^^ Rules of Civil Procedure, supra, note 1, r. 29.05(1).

29 //7zV/.,r.29.05(2)(b)and(5).

^^ Ibid., r. 27.10. However, an allegation by the third party that the defendant should be
responsible for some or all of the plaintiff's loss will normally be made in the defence to
the third party notice. Whether a counterclaim could be made by the third party against
the plaintiff was previously unclear: Armak Chemicals Ltd. v. Canadian National
Railway Co. (1980), 29 O.R. (2d) 259, 112 D.L.R. (2d) 560 (C.A.) (the Divisional Court
judgment appears at 29 O.R. 260 and 112 D.L.R. (2d) 561).

207

such damage, and thereafter commencing or continuing action against such
tort feasor

The substantive aspects of the right to contribution available to or
against a person who has settled the claim of the injured person have been
discussed in chapter 5 of this Report. In this chapter, our concern is with the
procedural implications of the section. In a number of respects, the courts
appear to have been willing to give a generous interpretation to the scope of
this provision. Two factors can be identified as contributing to this phenom-
enon. First, the courts have been quick to support the policy underlying
section 3, namely, that settlements should be encouraged by the law and that
no unnecessary procedural barriers should be placed between the settling
wrongdoer and other concurrent wrongdoers who have benefited from the
settlement. Secondly, the consequences for a claimant of a court's decision
that the machinery provided by section 3 is not available can be very serious,
including the loss of an opportunity ever to be able to enforce the right to
contribution.

This latter point refers, of course, to the rule in Cohen v. S. McCord &
Co. Ltd.^^ that a person who is sued to judgment must normally claim
contribution within the action by joining the potential contributor (D2) as a
party defendant or as a third party. It is not surprising, therefore, to discover
a number of cases in which claimants have resorted to the section 3
procedure in circumstances somewhat removed from the paradigm case of a
prior settlement between the injured person and the claimant, which has
made unnecessary the institution of litigation between them.

For instance, in Kraft v. The Queen in right of the Province of Ontario, ^'^
section 3 was held to be the appropriate procedure for the assertion of a right
to contribution by persons who were defendants to a negligence action that
was brought in New York following a road accident in Ontario. The
defendants to the contribution claim applied to have the action struck out
on the ground that, since there had been no settlement between the parties
to the New York litigation, nor any finding of liability made, the claimants
had failed to establish that they had yet acquired any cause of action. It was
conceded that the claimants could not obtain contribution in the New York
proceedings. The Court held that the action was not premature and that a
claim under section 3 was in order, "notwithstanding that the precise
amount with respect to which relief is sought, has not been finally
determined". ^^ Equally surprising is the fact that the Court was willing,
without even adverting to the point, to conclude that section 3 was appropri-
ate, even though it might be thought that a contribution claim based upon
potential liability in a suit in a foreign court was not founded upon a
"settlement" between the claimants and the injured persons.

^' Supra, note 3.

^2 [1972] 3 O.R. 684, 29 D.L.R. (3d) 275 (H.C.J.) (subsequent reference is to [1972] 3
O.R.).

^^ //7/W.,at687.

208

The question of the timing of a section 3 action has been considered
more recently in Glass v. Avenue Dodge Chrysler}^ As a resuh of an
automobile coUision, the injured party sued Dl for damages. The parties
settled this claim, but before the settlement was made Dl instituted proceed-
ings under section 3 against D2 for contribution. Dl alleged in this action
that D2's negligence in repairing the brakes of Dl's car entitled Dl to
contribution because D2 could have been sued by P, and, as between Dl and
D2, D2 must bear at least a share of the responsibility. D2 moved that Dl's
statement of claim should be struck out as disclosing no cause of action: the
wording of section 3 made it clear, it was argued, that proceedings could be
instituted only after the claimant had settled with the injured person. The
motion was disallowed on the ground that Dl's cause of action for contribu-
tion arose when P sustained his injury, and that the provision in section 3
governing the time at which the claim for contribution could be enforced
was merely procedural. Since P and Dl did in fact settle, the learned judge
refused to regard as fatal to Dl's action for contribution what was no more
than a procedural irregularity that had not prejudiced D2.

The Court's reasoning that Dl's cause of action arose at the date of the
injury to P can be sustained on neither principle nor authority.^^ However, it
is difficult to deny that the result is anything but satisfactory. One
commentator^^ has sought to support the conclusion in Glass by reference
to the wording of section 3, which speaks of Dl as "thereafter commencing
or continuing action against such other tort feasor". The argument is that
the word "continuing" must mean that the legislation contemplates the
initiation of proceedings before the settlement is made. It is suggested,
however, that a more plausible view is that the situation envisaged by the
word "continuing" is one in which P has sued Dl and D2, or only Dl, with
D2 brought in as a third party, and after a settlement between P and Dl, the
action continues between Dl and D2 for the purpose of determining the
issue of contribution.^^ The probable truth of the matter is that this question
was not foreseen by the drafter of the legislation.

If one ignores for the moment the precise wording of section 3, there
would not be anything peculiar about permitting a claimant for contribu-
tion to institute independent proceedings for contribution before making a
settlement with the injured person. The fact that Dl has not yet agreed to pay
a sum to P should no more bar a claim against D2 than the fact that Dl has
not been held liable to P at the time he issues a third party notice to D2. Of

3"* (1979), 26 O.R. (2d) 592, 10 C.C.L.T. 69 (Co. Ct).
^^ See discussion infra, this ch., sec. 3(b).
^^ Cheifetz, supra, note 6, at 156-57.

For an example of the use of s. 3 in this fact situation, see Slater Steel Industries Ltd. v.
I.C.E. Combustion Systems Inc., supra, note 6, where third party proceedings, com-
menced by one defendant against another after they had settled separately with the
plaintiff, were held to be a permissible form of proceeding to assert a right of contribu-
tion under s. 3 of the Negligence Act, supra, note 4.

209

course, a person who obtains an order for contribution is not thereby
necessarily entitled to enforce it immediately.^^

One final point should be noted. It has been held that a consent
judgment is a settlement within section 3.-^^

(v) The Rule in Cohen v, 5. McCord & Co, Ltd,

Until comparatively recently, the Ontario Negligence Act has been
interpreted as providing that a party who has been sued to judgment by P
may claim contribution only within that action. "^^ If the contributor is a co-
defendant, the claim must be made in the statement of defence; if the
contributor is not joined as a co-defendant to the plaintiff's action, contri-
bution must be sought by a third party claim. This rule was first established
in Cohen v. S. McCord & Co. Ltd.,"^^ where P had sued Dl and D2. D2 and P
then settled in the course of the trial. Counsel for Dl made no objection to
this, stating that he did not intend to claim over against D2. The Court of
Appeal dismissed a subsequent suit brought by Dl for contribution after he
had been held liable to P. The Court reasoned that the Negligence Act , which
at that time contained neither the current section 3 nor section 9,"^^ created
both the substantive right of contribution among tortfeasors and provided a
complete procedural code for its vindication. Thus, by virtue of section 2,
contribution could be claimed in the proceeding in which Dl and D2 were
held liable to P. If P sued only Dl, then the third party procedure expressly
introduced into the Act in 1939"^^ was the exclusive method for claiming
contribution, even though the wording of the statute was permissive, not
mandatory.

The rule established in this case has generally been accepted as the law
in Ontario, and has been regarded as surviving the subsequent amendments

^^ See infra, this ch., sec. 4.

3^ Morello v. Henderson, [1959] O.W.N. 121 (H.C.J.).

'*^ See, generally, Cheifetz, supra, note 6, at 79-86.

'*' Supra, note 3.

^^ Section 9 reads as follows:

(a) such proceedings are commenced within one year of the date of the
judgment in the action or the settlement, as the case may be; and

(b) there has been compliance with any statute requiring notice of claim
against such tort feasor.

^^ See supra, note 19.

210

to the Negligence Act. The introduction of section 3, which allows Dl to
institute proceedings for contribution following a settlement with P, even
though he has not been held liable, might be thought to have removed one of
the planks of the Court of Appeal's reasoning in Cohen v. S. McCord & Co.
Ltd., namely, that contribution could only be claimed in proceedings in
which the liabihty of Dl to P was determined. It was also argued in
Rickwood V. The Town of Aylmer,^'^ the leading case decided after these
amendments to the Negligence Act, that section 9, added after the decision
in Cohen, '^^ was inconsistent with that decision, because it envisaged the
institution of contribution proceedings at some time after Dl had been held
liable to P. Rickwood, like Cohen itself, was a case in which the contribution
claimant and the contributor were parties to the main action. The Court
nonetheless held that the rule in Cohen v. S. McCord & Co. Ltd. should still
be followed. The rule has also been applied when P sues only Dl."^^

Despite its application in a number of cases, the future of the rule in
Cohen v. S. McCord & Co. Ltd. is now somewhat uncertain."^^ This is largely
the result oi dicta in a judgment of the Supreme Court of Canada in The
Queen v. Thomas Fuller Construction Co. (1958) Ltd. ,'^^ where the decision
in Cohen was described as "unsatisfactory"."^^ It was also pointed out that
the addition to the Negligence Act of section 3 has made it clear that section
2 creates only a substantive right and does not determine the procedure by
which it must be estabhshed. More recently, a judge of the High Court of
Ontario has refused to follow Cohen v. S. McCord & Co. Ltd. , holding that
section 9 clearly contemplates the possibility that contribution may be
claimed in a separate action following a judgment in favour of the injured
person against the claimant for contribution.^^ In this case, Dl had been
refused an extension of time to serve a third party notice upon D2. Before
the action between P and Dl had come to trial, Dl commenced an action for
contribution against D2, which it was proposed should be tried with or
immediately after P's action against Dl. D2's application to have Dl's action
struck out was dismissed.

"^ [1957] O.W.N. 243, 8 D.L.R. (2d) 702 (C.A.).

^^ The Negligence Amendment Act. 1948, S.0. 1948, c. 61, s. 3.

^ Paul Papp Ltd. v. Fitzgerald, supra, note 23.

^"^ An editorial note to the D.L.R. report of Cohen v. S. McCord & Co. Ltd., at [1944] 4
D.L.R, 754, doubts whether the result is a justifiable interpretation of the language of
the Negligence Act . The additions of ss. 3 and 9 can only have increased those doubts.

^^ The Queen v. Thomas Fuller Construction Co. (1958) Ltd, [1980] 1 S.C.R. 695, 106
D.L.R. (3d) 193 (subsequent reference is to [1980] 1 S.C.R.).

^^ Ibid., at 712. Pigeon J., writing for the majority, expressed grave reservations about the
interpretation given to section 2 of the Negligence Act in Cohen v. 5*. McCord & Co. Ltd.
Only in Ontario have the courts so interpreted the statute that creates a right of
contribution among tortfeasors. Professor GJanville Williams has described the result in
Cohen v. 5*. McCord & Co. Ltd. as "judicial legislation, based on very slender authority
in the text of the Negligence Act": Williams, supra, note 22, at 185, n. 28.

^^ Cristovao v. Doran's Beverages Inc. (1983), 40 O.R. (2d) 737, 143 D.L.R. (3d) 641
(H.C.J.).

211

U Cohen v. S. McCordd Co. Ltd. is still the law in Ontario, there would
seem to be at least one genuine exception to the rule that it establishes. If it is
legally impossible for the primary rights and duties of the injured person and
the defendants to be determined in the same proceeding as any contribution
claim, the courts may allow the latter to be pursued in separate proceedings
before the competent court. This possibility is created by the Federal Court
Act,^^ which gives to the Federal Court exclusive jurisdiction over suits
brought against the federal Crown, and concurrent jurisdiction over actions
brought by the federal Crown and actions against servants and officers of the
federal Crown. However, the Supreme Court of Canada, in a series of
judgments, has taken a very narrow view of the constitutional power of
Parliament to clothe the Federal Court with original jurisdiction. ^^ jhg
result is that a perfectly ordinary claim for damages made against a number
of defendants, which include the federal Crown, may potentially give rise to
the following separate proceedings: (1) an action against the federal Crown
that must be brought in the Federal Court; (2) an action against the other
defendants that can only be brought in the appropriate court in a province;
(3) a claim for contribution that must be made against the federal Crown in
the Federal Court by any defendants held liable to the plaintiff; and (4) a
claim for contribution in a provincial court by the federal Crown. ^^

In Bates v. Illerburn .^"^ Jessup J. A. was prepared to assume that Cohen
V. S. McCord & Co. Ltd. did not bar a right to contribution that, by virtue of
the Federal Court Act and the constitutional limits upon the Federal Court's
jurisdiction, it was impossible to pursue in the main action. As we have seen,
in Kraft v. The Queen in right of the Province of Ontario, ^^ the Court treated
a claim for contribution that could not be pursued in the main action before
a foreign court as falling within section 3 of the Negligence Act . It is unclear
whether the courts would be prepared to extend this reasoning to a situation
where it was impossible, as a matter of practicality, for the claimant for
contribution to issue a third party notice, because, for instance, he could not
have known at the time when he was sued by P that there was another
wrongdoer.

(b) Alternatives for Reform

Of the procedural aspects of contribution claims outlined above, the
only one that the Commission considers should be reviewed is the rule in
Cohen v. S. McCord & Co. Ltd. In other respects, the procedure appears to
have attracted little criticism, and raises procedural questions that are by no
means confined to claims for contribution among wrongdoers. In any

^' S.C. 1970-71-72, c. 1, s. 17. See supra, ch. 2, sec. 4(a).

^2 See Evans, "Federal Jurisdiction: A Lamentable Situation" (1981), 59 Can. B. Rev. 124.

^^ But see discussion suprq, ch. 2, note 97.

^"^ (1976), 12 O.R. (2d) 721, at 725, 70 D.L.R. (3d) 154 (C.A.).

^^ Supra, note 32.

212

event, as we have indicated, the general principles governing third party
claims, crossclaims, and counterclaims have recently been the subject of
extensive revision, and it would obviously be inappropriate to re-examine
them as part of this project.

The principal procedural question relating to contribution among
wrongdoers that is considered in this Report is whether the law of Ontario
should prohibit a person who has been successfully sued to judgment by the
injured person from claiming contribution in an independent action com-
menced outside the proceeding in which he has been held liable to the
plaintiff. It has been noted that it is not altogether clear whether the
interpretation of the Negligence Act adopted in Cohen v. S. McCord & Co.
Ltd. is still good law. Even if the policy underlying that decision is to be
retained, we believe that the Commission's proposed new Contribution and
Comparative Fault Act^^ should deal with the point expressly. It is also
possible that the extension of the right to contribution beyond concurrent
tortfeasors may produce fact situations in which it will be more difficult
than is currently the case under the Negligence Act for the contribution
claimant to ascertain the existence of a concurrent wrongdoer. The changes
in the law recommended in this Report may increase the occasions on
which it would be unjust to require the claimant for contribution to pursue
his claim within the main action brought by the injured person.

There are three principal approaches to reform that should be consid-
ered in this area. First, the proposed statutory reform of contribution among
wrongdoers could include a provision to the effect that, as a general
principle, any right to contribution against a concurrent wrongdoer follow-
ing judicial determination of Dl's liability to P must be made in the course of
the proceeding brought by P against the contribution claimant (Dl). How-
ever, an independent action for contribution could be brought where the
court in which P sued Dl had no jurisdiction to determine a claim for
contribution by Dl against D2, or following a settlement between P and Dl,
whether or not the settlement was embodied in a consent judgment. This
would, in effect, be a statutory codification and generalization of the rule in
Cohen v. S. McCord & Co. Ltd. , but it would also remove any doubt that the
rule does represent Ontario law. A reform of this kind would also make it
clear that a person should not be deprived of the right to contribution by
virtue of his having been sued by the plaintiff in a forum where it was legally
impossible to claim contribution within the principal proceeding.

The advantages of a reform of this nature are as follows. First, it avoids
the difficulties and inconveniences of permitting many of the same issues to
be litigated and relitigated in separate proceedings. Multiple litigation, with
the possibility of inconsistent verdicts, is wasteful of court resources, costly
for the parties, and likely to result in substantial delays. Secondly, it clarifies
the present law and gives it a firmer statutory foundation. Thirdly, it
eliminates the possibility that the present law may have the effect of

The proposed new legislation appears as an Appendix of this Report.

213

destroying a right to contribution where P sues Dl in a forum that cannot
determine the question of contribution. Fourthly, by preventing Dl from
claiming contribution from D2 after Dl has been sued by P, this proposed
reform reduces the hkeUhood that D2 may have to pay contribution after
the expiry of the period within which P must proceed against D2. Fifthly, it
puts into statutory form a legal rule already familiar to Ontario practition-
ers, and one that appears in practice to cause few injustices.

The important question is whether the undoubted benefits that flow
from minimizing the number of legal proceedings that can arise from a
single loss suffered by the plaintiff are being purchased at too high a price. As
indicated, the situations in which it would be unfair to deny Dl the right to
bring an independent action for contribution may increase with the expan-
sion of rights to contribution among concurrent tortfeasors, contract break-
ers, and those in breach of fiduciary duties. Thus, the fact that the plaintiff
could have sued D2 in respect of the loss for which he has sued Dl may not
be apparent to Dl until after he has been held liable to P.

A second approach, which has been followed in some jurisdictions,
would be to adopt Cohen v. S. McCord & Co. Ltd. as the basic rule, but to
soften its impact by conferring upon the court a discretion to permit the
claim to proceed by way of an independent action. For example, section
27(1) of the Irish Civil Liability Act, 196P^ provides that where Dl and D2
are sued in a single proceeding by P, they may claim contribution only in
that action. Where D2 has not been joined by P, Dl must claim contribution
by serving a third party notice "as soon as is reasonably possible". If no third
party notice is served, the court in its discretion may refuse to make an order
for contribution.

The Irish legislation gives no indication of the scope of the judicial
discretion to refuse to award contribution where no third party notice has
been served, nor the grounds upon which it may be exercised. However,
Professor Williams, upon whose draft legislation the Irish statute is largely
based, has stated that an independent action should be permitted only
where it is impossible, as a practical matter, for the third party notice to be
served.^^ Section 2(4)(b) of the South African Apportionment of Damages
Act, 1956^^ indicates more clearly that claims for contribution by way of an
independent action are to be very much the exception to the general rule: it
provides that rights of contribution against persons who are not co-defen-
dants shall be made by third party notice, "except with the leave of the court
on good cause shown as to why notice was not given".

The advantage of an approach along these lines is that it attempts to
preserve the benefits of Cohen v. S. McCord & Co. Ltd. , while, at the same

^^ Supra, note 22.

5^ Williams, supra, note 22, at 185-86.

^^ 1956S.S.A., No. 34.

214

time, permitting a court to mitigate the rule's Draconian consequences in
cases where the contribution claimant would otherwise be denied an effec-
tive opportunity to assert his right. The difficulty is to find a verbal formula
that prevents the exceptions from eroding the basic rule. In addition, to
confer upon the courts an inadequately structured discretion, exercisable on
a case-by-case basis, might introduce an unwarranted degree of uncertainty
into the law.

A third option is to abolish the rule in Cohen v. S. McCord & Co. Ltd. ,
and allow the contribution claimant to elect to pursue his claim either
within the main action or by an independent proceeding after he has been
held liable to the injured person. Unnecessary multiple litigation could be
discouraged by the imposition of a costs sanction upon a person who is
unable to satisfy the court that he had good cause for claiming contribution
in a separate proceeding.

Most jurisdictions, including some in which the matter has been
reconsidered recently, impose no restriction upon the claimant's ability to
seek contribution outside and subsequent to the main action. Section 4(a) of
the American Uniform Comparative Fault Act^^ specifically allows a right
to contribution to be enforced in the original action by the injured person,
"or by a separate action brought for that purpose". In addition, the English
Law Commission was satisfied with the broad framework of the Law
Reform (Married Women and Tortfeasors) Act, 1935^^ and recommended
no procedural changes.^^ Contribution, in English law, may be recovered
from a concurrent wrongdoer either within the main action or in a separate
proceeding.

The procedural issue under consideration has been specifically
addressed by the Alberta Institute of Law Research and Reform, which has
recommended against the adoption of the rule in Cohen v. S. McCord & Co.
Ltd.^^ The reason given in the Institute's Report is that the undoubted
advantages of ensuring that all the issues arising out of a single loss suffered
by the injured person are determined in one piece of litigation, the outcome
of which would bind all parties, are outweighed by the disadvantages of
forcing defendants unnecessarily to add potential contributors as third
parties. This, it is argued, would be likely to complicate unduly the prosecu-
tion of P's claim in what might otherwise be a straightforward case.^^ It

^^ National Conference of Commissioners on Uniform State Laws, Uniform Comparative
Fault Act, Uniform Laws Annotated, Vol. 12 (1987 Pocket Part).

^' C. 30 (U.K.).

^^ The Law Commission, Law of Contract: Report on Contribution, Law Com. No. 79
(1977),para. 31, atlO.

^^ Alberta, Institute of Law Research and Reform, Contributory Negligence and Concur-
rent Wrongdoers, Report No. 31 (1979) (hereinafter referred to as "Alberta Report"),
Recommendation 16, at 74.

^^ For a similar view, see Weir, 11 Int'l Enc. Comp. L. XI Torts (1983), ch. 12 (Complex
Liabilities), at 76-77.

215

should be noted that the Uniform Contributory Fault Act, adopted by the
Uniform Law Conference of Canada,^^ is silent on the issue. It may be
inferred from this either that the Uniform Law Conference agreed with the
Alberta Institute, or that the imposition of procedural restrictions upon the
pursuit of a claim for contribution is regarded as a matter of individual
choice for the provinces that adopt the uniform statute.

There are some advantages in abolishing the rule in Cohen v. S. McCord
& Co. Ltd., with or without a costs sanction. First, as the Alberta Institute
has suggested, it would minimize the risk that the question of the secondary
right of contribution would prejudice the vindication by the injured person
of his primary right to obtain compensation from the defendant against
whom he has chosen to institute proceedings. Secondly, it would avoid the
unattractive possibility that Dl's substantive right may be barred by a rigid
procedural rule, or be made subject to the exercise of judicial discretion.

In attempting to assess the weight that should be attached to these
arguments it ought to be borne in mind that adding a third party does not
necessarily prejudice the plaintiff. The secondary rights and liabilities of Dl
and D2 can often be determined when the issues in the main action have
been decided, after which P, in effect, drops out of the picture. However, if
the court rules that it is appropriate for the third party to defend against P's
claim in the main action, the addition of the third party may well complicate
P's action: to this extent, P's ability freely to choose his defendant will be
limited. It is arguable that the plaintiff's interest in being able to select the
defendant against whom he will proceed is adequately protected by his
ability to prevent from being joined as a co-defendant to the main action a
person whom a defendant wishes to be brought in as a party-defendant.

The Commission is satisfied that the benefits of eliminating multiple
proceedings are sufficiently clear that it is justifiable to impose more than a
costs sanction to encourage parties to claim contribution within the main
action.^^ We recommend, therefore, that where the contribution claimant
and the contributor are parties to the injured person's action, contribution
should be claimed by way of a crossclaim in that action in accordance with
the relevant provisions of the Rules of Civil Procedure.^^ No subsequent
claim for contribution outside the action should be permitted, except where
the court that determines the liability to P of Dl and D2 has no jurisdiction

^^ Uniform Law Conference of Canada, Proceedings of the Sixty-Sixth Annual Meeting
(1984), Appendix F; Uniform Contributory Fault Act.

^^ For an example of judicial approval of Cohen v. S. McCord & Co. Ltd. in a jurisdiction
where this is not the law, see Ingli.s Ltd. v. South Shore Sales and Service Ltd. (1979), 31
N.S.R. (2d) 541, at 557-59, 1 1 C.P.C. 127 (S.C, App. Div.).

^^ Supra, note 1. See the Commission's proposed Contribution and Comparative Fault Act
(hereinafter referred to as "Draft Act"), s. 19(1). The Draft Act appears as an Appendix
of this Report.

216

to award contribution.^^ When the contributor is not a party to the action,
contribution should normally be claimed only by way of a third party
claim.^^ Again, this rule should be subject to the proviso that Dl should be
able to claim contribution in a separate action, after he has been held liable
to P, where the court before which P's action is instituted cannot in law
award contribution.^^

More difficult is the question whether a further exception should be
made to cover cases where the contribution claimant could, as a matter of
law, have served a third party notice and had the issue of contribution
decided on its merits, but where it was impracticable for him to have done
so. On balance, the Commission favours broadening the scope of the
exception beyond cases where it is legally impossible to claim contribution
within the main action. Admittedly, under the present law, there will be few
situations in which it will be impractical for a defendant to institute a claim
for contribution by way of a third party claim. He will normally be aware at
some time before the conclusion of the plaintiff's action that another person
may be concurrently Uable for the plaintiff's loss. In cases where the
defendant does not know the whereabouts of such a person, substitutional
service is available. ^^ Nonetheless, there is much to be said for enabling the
defendant to claim contribution in an independent action in cases where
proceeding by way of a third party claim is impracticable, especially since
expanding the scope of the right of contribution may increase the incidence
of situations where to deny the contribution claimant this remedy would
effectively negate his substantive right.

The Commission recommends, therefore, that a person should be able
to claim contribution in a separate proceeding, after being held liable to the
plaintiff, provided that the person from whom contribution is claimed was
not a party to the plaintiff's action in which the claimant was held liable and
that it was impracticable for him to have pursued the claim by way of a third
party notice.^^

Finally, it should be noted that, under section 3 of the Negligence Act, a
defendant who has settled with the injured person may claim contribution
from another concurrent wrongdoer in an independent action. ^^ Moreover,
the bar upon claiming contribution in an independent action appears not to
apply to a consent judgment against Dl in favour of P. Consent judgments
are treated for this purpose as settlements, and give rise to a claim for

^^ Draft Act, s. 19(3).
^^ Ibid., s. 19(2).
^^ Ibid., s. 19(3).

See Rules of Civil Procedure, supra, note 1, r. 16.04. On service outside the junsdiction,
see R. 17.

^2 Draft Act, s. 19(3).

^^ See supra, this ch., sec. 2(a)(iv).

217

contribution under section 3 of the Negligence Act J ^ However, if Dl has
been sued to judgment by P, Dl cannot later claim contribution from D2, a
co-defendant, who settled P's claim in the course of the trial: this was the fact
situation in Cohen v. S. McCord & Co. Ltd. itself.

The Commission recommends that, as is the case under the Negligence
Act, a person whose right to contribution is based upon a settlement of the
injured person's claim should continue to be entitled to institute an inde-
pendent action for contribution against a person who is or may be con-
currently liable for the loss to which the settlement relates. Moreover, for
example, where P sues Dl and D2 (or D2 is added as a third party), Dl
immediately institutes contribution proceedings against D2, and then Dl
settles with P, Dl should be entitled, as he now is under the Negligence Act, Xo
continue the proceedings for contribution against D2. It is further recom-
mended that consent judgments should continue to be treated as if they were
court-approved settlements for the purpose of making a claim for contribu-
tion, on the ground that it would be arbitrary to make the procedural
consequences of a settlement depend upon the often fortuitous fact of
whether or not its terms were embodied in a formal judgment.^^

3. CONTRIBUTION CLAIMS AND LIMITATION PERIODS

(a) Introduction

The question considered in this part of the chapter is whether a special
limitation period within which a claim for contribution must be made
against a concurrent wrongdoer should be recommended, and, if it should,
what its duration ought to be. It is important at the outset to emphasize the
comparatively narrow scope of the issue under consideration and to distin-
guish it from other aspects of the expiry of limitation periods. In chapter 7 of
this Report, the Commission examined the question whether Dl's right to
contribution should be prevented from arising by the fact that, when P
instituted proceedings against or settled with Dl, P's cause of action against
D2 had become barred by the lapse of time. It will be recalled that the
Commission concluded that it would be unjust to allow Dl's ability to
obtain contribution to be thwarted by P's failure to press his claim against
Dl before D2's liability to P had ceased to be enforceable by virtue of the
expiry of a limitation period. ^^ It is also relevant to note that, under the
recommendation made in the previous section of this chapter, when Dl is
sued by P, he must normally claim contribution within or incidentally to the
action, either by way of a crossclaim or a third party claim.

''^ Morello v. Henderson, supra, note 39, and Glass v. Avenue Dodge Chrysler, supra, note
34.

^5 Draft Act, s. 17(1).

^^ See supra, ch. 7, sec. 2(c).

218

There would, therefore, be relatively few situations in which a question
could arise about the limitation period governing the contribution claim
itself However, it will be important to know the period within which a right
to contribution must be enforced when the claim for contribution is made
following a settlement between the injured person and the claimant for
contribution, and in those rare situations when a claim for contribution that
is based upon a judgment given in favour of the injured person against the
claimant for contribution can be asserted subsequently by way of an
independent action.

(b) The Present Law

Neither the Negligence Act nor the Limitations Ac f^ expressly specifies
the period within which a claim for contribution must be made. The better
view appears to be that an action for contribution must be brought within
six years of the date when the cause of action accrued.^^ In George Wimpey
& Co. Ltd. V. British Overseas Airways Corp.,'^^ Viscount Simonds was
prepared to assume that, for limitations purposes, the claim should be
treated as one for breach of contract. The reasoning supporting this view is
that contribution is the equitable equivalent of the common law action of
indebitatus assumpsit, and is similar to the common law money count for
money paid by a person to another's use.^^ Historically, the common law
counts were classified as ^w^5/-contractual.^* If this is the correct characteri-
zation of contribution among wrongdoers, the relevant provision in the
Ontario Limitations Act would be section 45(l)(g), which also prescribes a
six year limitation period for actions for simple contracts or debts founded
upon contract.

The matter cannot, however, be regarded as completely free from
doubt. The propriety of regarding even the common law money counts as
being "contractual" in any real sense is no longer accepted in Canada.^^ It is
even more questionable to extend this dubious reasoning to a statutory right
derived from an equitable principle, albeit one that can be brought under the
same broad umbrella of restitution that also shelters the action for money
paid. It might thus be suggested that the relevant provision in the Limita-
tions Act is section 45(l)(h); this provides a limitation period of two years
within which ""an action for a penalty, damages, or a sum of money given by
any statute to.. .the party aggrieved. . ." must be enforced. There is some

^^ R.S.0. 1980, c. 240.

'^^ See, for example, Black v. Horseman (1974), 4 O.R. (2d) 188 (H.C.J.), at 194.

^^ [1955JA.C. 169(H.L.),atl77.

For a recent judicial recognition of this similarity, see Ronex Properties Ltd. v. John
Laing Construction Ltd., [19831 Q-B. 398, at 407, [1982] 3 All E.R. 961 (C.A.).

^' Goff and Jones, The Law of Restitution (2d ed., 1978), at 5-11.

^2 Fridman and McLeod, Restitution (1982), at 29-30.

219

weak authority to this effect.^^ It is hardly surprising that the question has
rarely arisen in Ontario; the reason, of course, is that Cohen v. S. McCord&
Co. Ltd. has ensured that most claims for contribution are made before the
liability of Dl to P has been determined in litigation.

Section 9 is the one provision of the Negligence Act that has a direct
bearing upon the time within which claims for contribution must be made.
This, it will be recalled, has been held to enable a claim for contribution to be
made against a concurrent tortfeasor who had ceased to be liable by the time
the injured person commenced proceedings against or settled with Dl.^"^
However, the section restricts the claimant's right to contribution by provid-
ing that the claim must be made within a year of the judgment in P's favour
against Dl or of the settlement between P and Dl. In addition, there must
have been compliance with any statutory requirement respecting the service
of notice of P's claim against D2. These provisions give a very limited and
somewhat arbitrary degree of protection to D2 from claims for contribution
made long after his liability to P has expired.

An important aspect of the description of any limitation period is the
point in time from which it starts to run. Although there are some aberrant
decisions,^^ the clear weight of authority supports the proposition that the
right to contribution arises at the date of the judgment in P's favour against
Dl or, where Dl's claim is based upon a settlement, the date when the
settlement was made.^^ A claim for contribution, even when made by way of
a third party claim within the main action, has been recognized in other
contexts as having an existence that is independent of P's cause of action.^^
The limitation period governing the contribution claim will, therefore, start
to run from the event giving rise to the right to contribution in a given case;
it does not commence when the injured person's cause of action accrued
against the wrongdoer who is seeking contribution.

The reason why the limitation period governing Dl's right to contribu-
tion commences at one of the two points indicated above is that the right is
based upon the conferral upon D2 by Dl of a benefit that takes the form of

^^ Sherritt v. Thorold Concrete Block Co. , [1954] O.W.N. 535 (C.A.), and Schwella v. The
Queen, [1957] Ex. C.R. 226.

^^ See supra, ch. 7, sec. 2(a). Section 9 is reproduced supra, note 42.

^^ See, for example, Glass v. Avenue Dodge Chrysler, supra, note 34.

^^ Cheifetz, supra, note 6, at 76-77. See, also, Cristovao v. Doran's Beverages Inc., supra,
note 50.

^^ The Queen v. Thomas Fuller Construction Co. (1958) Ltd. , supra, note 48. See, however,
Dorland v. Apollo Leasing Ltd (1981), 33 O.R. (2d) 183 (Div. Ct.), where a third party
claim by the defendant against a municipality was held to deny the plaintiff a right to a
trial by jury of the main action. The municipality would be bound at least by the
assessment of damages in the plaintiff's action, and the Judicature Act, R.S.O. 1980,
c. 223, s. 58 (repealed by the Courts of Justice Act, 1984, S.O. 1984, c. 11, s. 187(1))
provides that certain actions against municipalities shall be tried without a jury (see,
nov/. Courts of Justice Act. 1984, s. 121(2)12).

220

discharging or reducing D2's liability to P. Nonetheless, there are objections
to pursuing this reasoning to its logical conclusion in the context of periods
of limitation, because, particularly where the limitation period is a lengthy
one, the effect may be to extend unduly the length of time for which D2
remains liable to a claim that will depend, in part at least, upon events for
which he may have ceased to be liable some considerable time previously.

Suppose, for example, that P has suffered a single loss as a result of
breaches of separate contracts by Dl and D2. P has six years from the breach
within which to press his claim against them. One day before the period
expires, Dl settles P's claim in full. If Dl's right to seek contribution from D2
is regarded as a truly independent cause of action springing from his
settlement with P, then Dl may arguably delay a further six years less one
day before commencing proceedings for contribution. It may seem at least
questionable whether D2 should remain potentially liable for almost twelve
years from the time that P's cause of action against him for an alleged breach
of contract arose. The problem is aggravated, of course, if D2's liability to P
had expired before Dl settled with P or before P obtained a judgment against
him.

Several approaches to reform are possible in respect of the limitation
period governing contribution claims. One alternative is to recommend that
any statutory reform of the law relating to contribution among concurrent
wrongdoers should not contain any provisions dealing with the time within
which Dl must claim contribution. Despite the uncertainty in the present
law about the limitation period applicable to claims of this kind, and the
potential for causing an injustice to D2, who must remain ready to defend a
claim long after he has ceased to be liable to P, it could be argued that this is
a problem that ought to be left to be considered within the context of a
general reform of limitation periods. Moreover, there is little evidence to
suggest that the theoretical disadvantages of the present law are any more
than exactly that: in practice, neither injured plaintiffs nor claimants for
contribution generally delay the institution of the legal proceedings neces-
sary to assert their rights.

Against this position it can be argued that, given the uncertain nature of
the present law on a point of particular relevance to contribution among
wrongdoers, it is appropriate that it should at least be clarified by legislation.
Reform of the law of limitations in Ontario has been under consideration
for some time, and there is no reason why the aspect relevant to this Report
should not be settled now.^^

^^ Neither the Ontario Law Reform Commission's Report on Limitation of Actions (1969),
nor the draft Limitations Act proposed in Discussion Paper on the Proposed Limitations
Act (1911), issued by the Ministry of the Attorney General, nor the former proposed
Limitations Act. 1983, Bill 160, 1983 (3d Sess. 32d Legis.), which did not proceed beyond
1st Reading, deals specifically with this issue. Claims for contribution would generally

221

If it is desirable to include in the proposed statute a limitation period
specifically governing claims for contribution among wrongdoers, a second
approach would be to adopt a single length of time that would apply to all
such claims. While the selection of a limitation period is always somewhat
arbitrary, to establish a uniform limitation period would have the great
merits of clarity and simplicity.

As indicated, the present law probably provides that, except for claims
for contribution governed by section 9 of the Negligence Act, Dl has six
years from the date either that judgment was entered against him, or that he
settled with P, in which to institute proceedings for contribution. This seems
unduly long, especially when it is recalled that the claim could involve
disputed events that happened nearly twelve years before contribution is
claimed, and that D2 may have ceased some time before to be capable of
being sued successfully by P.

The English Civil Liability (Contribution) Act 1978^^ extends to the
expanded right of contribution among all concurrent civil wrongdoers the
two year limitation period that formerly governed claims for contribution
and indemnity among concurrent tortfeasors.^^ The Law Reform Commis-
sion of Hong Kong has recommended the adoption of the English
solution.^' The American Uniform Comparative Fault Act also contains a
single Hmitation period of one year within which the right to contribution
must be asserted.^^

A third possible approach is to relate the limitation period governing
the contribution claim to the period within which D2 remains liable to P.
The advantages of a scheme of this kind are twofold. First, it protects D2
from claims for contribution brought too long after his original liability to P
has expired. Secondly, it ensures that Dl will be able to sue D2 for at least as
long as D2 could be sued successfully by P. In short, this type of proposal
recognizes that, although the right to contribution is in some respects

be governed by the residual six year limitation period, although it was recommended
that a provision similar to s. 9 of the Negligence Act should be included in any new
limitations statute. See Ontario Law Reform Commission Report, at 111-13, and
Discussion Paper, draft Limitations Act , s. 4(2). See, also. Bill 160, ss. 5(3) and 21(2)14.

^^ Civil Liability (Contribution) Act 1978, c. 47 (U.K.).

^^ See Schedule 1 of the 1978 Act, which made the necessary amendments to the
Limitation Act 1963, c. 47 (U.K.), s. 4, in order to make it applicable to all concurrent
wrongdoers with a right of contribution under the 1978 Act. (See Limitation Act 1980,
c. 58 (U.K.), s. 40(3), Sch. 4, which repealed s. 4 of the Limitation Act 1963. See, now, s.
10 of the 1980 Act.) In its Twenty-First Report (Final Report on Limitation of Actions)
(Cmnd. 6923, 1977), para. 3.34, at 40, the English Law Reform Committee concluded
that it was unlikely in practice that D2 would be required to pay contribution long after
his liability to P had ceased to be enforceable, and that it was therefore unnecessary to
shorten the limitation period to deal with the problem.

^' The Law Reform Commission of Hong Kong, Report on the Law Relating to Contribu-
tion Between Wrongdoers, Topic 5 (1984), at 28-30.

^2 5'w/7ra,note60,§5(c).

222

independent of the right of the injured person, there is, nonetheless, a
substantial overlap between the factual and legal bases of D2's liability to
both P and Dl.

Considerations of this kind have influenced law reform in some juris-
dictions. For example, section 31 of the Irish Civil Liability Act, 196 1"^^
provides that Dl must pursue his right to contribution within two years from
the time of judgment or the time that P's damages are paid, or for as long as
D2's liability to P remains enforceable, whichever period is the longer. Other
proposals have fixed the continuing liability of D2 to P as the maximum
extent of the limitation period. For example, the Alberta Institute of Law
Research and Reform has recommended that Dl should not be entitled to
bring a separate action for contribution after the expiry of the limitation
period governing P's rights against D2.^'* The South African Apportionment
of Damages Act, 1956^^ provides that, in order to claim contribution, Dl
must establish that he has brought his action within one year from the date
that judgment was entered against him in his litigation with P, and that P's
right to sue D2 has not become barred by the expiry of the limitation period
governing the enforcement of P's claim against D2. As we have already seen,
section 9 of Ontario's present Negligence Act imposes a short limitation
period for the enforcement of the right of contribution against contributors
whose liability to the injured person has already lapsed.

(d) Conclusions

A number of competing considerations are relevant to determining the
appropriate limitation period. On the one hand, sufficient time should be
given to enable Dl to vindicate effectively his right to contribution. How-
ever, in the interests of the administration of justice and fairness to the
person from whom contribution is claimed, the claimant's right should be
asserted without undue delay.

In striking the appropriate balance, two considerations peculiar to the
right of contribution among wrongdoers should be borne carefully in mind.
First, while the right arises at the date of the judgment against Dl or the time
when Dl settles with P, many of the issues relevant to establishing the right
and to any defence that D2 may raise will relate to the earlier events
surrounding the infliction of the loss upon P by the concurrent wrongs of Dl
and D2. The argument for shortening the limitation period is strengthened
if D2's liability to P has become statute-barred.

^•^ Supra, note 22.

^'* Alberta Report, supra, note 63, at 15-16. However, the Report also recommended (at
71) that the lapse of the limitation period governing P's rights against D2 should not
prevent Dl from claiming contribution in a third party proceeding, provided that notice
is served within 6 months of the delivery to Dl of P's statement of claim.

^^ Supra, note 59, s. 2(6)(b).

223

Secondly, the Commission has already emphasized the undesirability
of permitting Dl, after being held liable to P, to claim contribution in a
separate proceeding. To impose a short limitation period upon the right to
contribution would minimize the situations in which such a claim could
ever be made successfully. On the other hand, once it has been decided that
justice requires that some limited exceptions should be made to a statutory
codification of the rule in Cohen v. S. McCord& Co. Ltd., Dl should not be
denied, by the imposition of an unrealistically short limitation period, a fair
opportunity to avail himself of the benefit of the exception that permits him
to proceed by way of a separate action. In addition, the mischief at which the
rule in Cohen v. S. McCord & Co. Ltd. is aimed is, of course, not present
when Dl claims contribution following a settlement; however, most of the
reasons considered above for a short limitation period for contribution
claims remain relevant in this context.

An undoubted advantage of a uniform limitation period governing all
claims for contribution from a concurrent wrongdoer is that it would make
for clarity in the law and ease of administration. It is likely that the cases in
which a genuine limitation issue will arise will be few because most claims
will continue to be made within or incidentally to the main action, and those
made in an independent action will generally be asserted expeditiously. The
circumstances in which contribution will be sought in an independent
action from a person who has ceased to be liable to the injured person will be
unusual.

In recommending that a right to contribution should not be prevented
from arising by the expiry of the limitation period governing P's rights
against D2, the Commission has already indicated that it does not regard
this as a decisive matter in determining the availability of the right.^^ We
further recommend here that a single limitation period should govern all
actions for contribution among wrongdoers brought after Dl has been held
liable to P or Dl and P have made a settlement. In the opinion of the
Commission, a person should be required to institute proceedings for
contribution within two years of the date of the judgment or settlement that
gave rise to the right.^^

The imposition of a comparatively short limitation period is justified
by the close relationship between the claim for contribution and earlier
events, the possible lapse of the time within which P had to enforce his rights
against D2, and the public policy interest in keeping to a minimum the
incidence of multiple litigation.

4. ENFORCING THE RIGHT TO CONTRIBUTION

Throughout this Report, we have argued that an important rationaliz-
ing principle of the right to contribution among wrongdoers is that, by

^^ See supra, ch. 7, sec. 2(c).
^^ Draft Act, s. 18.

224

discharging his Habihty to P, Dl thereby confers a benefit upon D2, who is
concurrently Uable for P's loss, and that D2 will be unjustly enriched at Dl's
expense if Dl pays to P more than the share of the total liability that, as
between Dl and D2, should fairly be borne by Dl. One of the peculiarities of
contribution claims is that proceedings may be instituted, and an order for
contribution obtained from the court, before Dl has been held liable to P or
has made a payment that discharges or reduces the concurrent liability of Dl
and D2.

As we have seen, the most common procedural method of claiming
contribution is the crossclaim or third party claim made within the action
brought against Dl and D2, or Dl alone. Claims for contribution are thus
typically made before the essential ingredients of the right are present;
moreover, at the conclusion of the trial, the judgment may order D2 to pay
contribution to Dl, even though Dl has not yet paid anything to the
successful plaintiff, and therefore has conferred no benefit at all upon D2.
Similarly, proceedings may be instituted under section 3 of the Negligence
Act even before a settlement has been made between P and Dl.^^ An English
court has held that contribution could be claimed in an action as soon as Dl
could show that a demand from P was imminent.^^

While the courts may fairly readily allow a claim for contribution to be
made before Dl has paid anything to P or before a settlement has been made
between P and Dl, provided that Dl can prove an imminent loss, it does not
follow that an order made in Dl's favour will be immediately executable.
The principal issue considered in this part of the chapter touches primarily
upon this latter question, namely, the determination of the earliest moment
at which the contribution claimant is entitled to an executable order for
contribution. '^^ Should Dl be required to satisfy P's claim in full, or only to
pay his proportionate share, before being entitled to be put in funds by D2?
It might even be argued that as soon as Dl pays anything at all he should
have an enforceable right immediately to recover part by way of contribu-
tion, on the ground that every dollar that he pays to P reduces D2's liability
and thus confers a benefit upon him. On the other hand, it could be pointed
out that the purpose of a contribution order is to prevent unjust enrichment,
and that D2 is only unjustly enriched when Dl pays more than his propor-
tionate share of the loss. Moreover, it may be unjust to D2 to allow the
contribution order to be executed before Dl has satisfied the judgment in
full, because D2 may remain liable to P for the unsatisfied portion.

Consider, first, the case where Dl and D2 are both sued by P in one
proceeding. Assume that both are held liable to P and are found to be
equally responsible for the loss. The order normally made in such a case is
that each party is entitled to claim contribution on paying to P more than 50

See, for example, Glass v. Avenue Dodge Chrysler, supra, note 34.
^^ Wolmershausen v. Gullick, [1893] 2 Ch. D. 514.
'^^ See Cheifetz, supra, note 6, at 122-26.

225

percent of P's recoverable loss.'^' A problem arises if it is suspected that D2
cannot satisfy P's judgment and that it will not be possible to enforce it. To
require Dl to satisfy the judgment in full before being able to execute the
contribution order might be unduly harsh: Dl might be able to satisfy his
proportionate share without too much difficulty, but would be financially
embarrassed if he had to pay the entire amount before recovering anything
from D2. On the other hand, to allow Dl to obtain payment from D2 before
he has compensated P in full may endanger P's ability to recover the balance
from D2. P and Dl may thus be competing for D2's limited resources. Of
course, P can always elect to execute against Dl for the entire amount.

The solution to this problem adopted in section 23 of the Irish Civil
Liability Act, 1961 '^^ is that Dl may execute the contribution order either
when he has discharged his entire liabiUty to P or when he has paid more
than his proportionate share. However, if Dl has not paid the entire amount,
he is only entitled to contribution in respect of the amount paid in excess of
the proportion of the judgment that he should ultimately bear. Moreover,
when Dl seeks to enforce the contribution order before paying the entire
loss, the court must make provision, "by obtaining the personal undertak-
ing of [Dl's] sohcitor or otherwise, for applying the sum received under the
said judgment towards satisfaction of the damages due to the injured
person".

A similar recommendation has been made by the Alberta Institute of
Law Research and Reform, which has proposed that, where execution of the
contribution judgment is issued after Dl has paid more than his proportion-
ate share, but less than the total amount, the money recovered from D2
should be paid into court to the credit of the person who has suffered the
damage or such other person as the judge may order. '^^ This recommenda-
tion has been incorporated in section 14 of the Canadian Uniform Contribu-
tory Fault Act }^^

Suppose, though, that D2 has not been joined as a co-defendant to P's
action against Dl, but has been brought in by Dl as a third party. Should
similar principles apply to the execution of a judgment for contribution
obtained by Dl against D2? It has been suggested that, in this case, Dl should
be able to execute the contribution order for every dollar that he pays, even
if his payment to P never exceeds the proportion of the liability that, as
between himself and D2, he ought ultimately to bear.'05 Again, provision
could be made for ensuring that whatever is recovered from D2 goes first to
satisfy any amount of P's judgment against Dl that Dl has not satisfied. The

•°' For an example of the typical form of the order, see Stewart v. London Transportation
Comm., [1969] 1 O.R. 123, 1 D.L.R. (3d) 550 (H.C.J.).

^^^ Supra, note 22.

'^^ Alberta Report, supra, note 63, at 81-83.

^^^ Supra, note 65.

'^^ Cheifetz, supra, note 6, at 123-25. See, also, Williams, supra, note 22, at 148-51.

226

argument made is that, since P has not obtained judgment against D2, to
enable Dl to claim contribution before paying his fair share would not put P
and Dl in the position of competitors for D2's money. Moreover, if any
money recovered by Dl is applied first to satisfying P's claim, then P will
actually be able to recover more through this means than he would if the
contribution order was only enforced in respect of any amount actually paid
by Dl in excess of his proportionate share.

It is not recommended that the preceding proposal be adopted. It may
be noted that the Canadian Uniform Contributory Fault Act does not
distinguish between a case where D2 is a co-defendant and where he is a
third party. To introduce an added complexity in the procedural arrange-
ments needs clear justification. It is not obvious why D2, who has not, after
all, been sued by P, should be required indirectly to put P in funds when D2
has not been unjustly enriched, because Dl has paid less than Dl's propor-
tionate share of P's loss. If Dl is solvent, P can recover in full against him,
and if he is not, it is not clear why P should have access to the funds of D2,
whom he has not made a party to the main action.

The Commission has recommended earlier in this Report that, as a
general principle, a person should be able to obtain contribution from a
concurrent wrongdoer, even though that person's liability to P has not been
judicially determined. Thus, Dl may claim contribution when he has settled
P's claim, either in total satisfaction of any cause of action that P may have
against anyone in respect of the loss, or in satisfaction only of P's claim
against Dl. ^^^ If Dl has settled with P in such a way as to render D2 immune
from an action by P, then Dl will be able to obtain an executable order for
contribution when he has paid his proportionate share of P's loss as
quantified by the settlement figure, assuming, of course, that it is not
unreasonable.

The issues are more complex when Dl has settled only his own share of
P's claim, so that P is still able to sue D2 for the balance. It will be difficult for
Dl to know whether he is entitled to contribution before P's loss has been
fixed if Dl must show that he has paid more than his fair share. It may also
be unfair to require D2 to pay anything to Dl while he remains liable to P.

One solution would be to deny Dl the right to an executable order for
contribution while P may still successfully sue D2 for the balance of his loss.
When P's claim against D2 lapses through the expiry of the limitation
period, or is satisfied, Dl could then recover from D2 if he had settled for
more than his fair share. The difficulty with this solution is that it may keep
Dl out of funds for an unduly long period; it may also prevent him from
recovering at all if D2's financial position is precarious or if he moves assets
out of the jurisdiction. Another disadvantage is that it may discourage the
making of partial settlements.

106

See supra, ch. 5, sec. 3(c).

227

Alternatively, the rule applied to other bases for contribution claims
could be extended to partial settlements— that is, Dl will be entitled to an
executable order when he has paid more than his due proportion of the
liability. In order to protect D2 from being sued twice, and to ensure that P
and Dl are not in competition for the same assets, the court could order that
any moneys found payable by D2 as contribution should be used first to
ensure that P is fully compensated for his loss. While the Irish Act does not
deal with this aspect of contribution claims made on the basis of a settle-
ment, the provision in the Canadian Uniform Contributory Fault Act
appears general enough to cover the problem. The court might order, for
example, that the claimant's solicitor shall hold moneys paid by D2 in trust
for P until P had been fully compensated.

Following the enactment of the English Civil Liability (Contribution)
Act 1978,^^'' an amendment was made to the rules of practice to deal with
the execution of contribution orders against concurrent wrongdoers. The
Rules of the Supreme Court now provide ^^^ that when a contribution order
is made against a third party, a co-defendant, or a defendant in an action
commenced to obtain an order for contribution, execution shall not issue on
the order without the leave of the court until the contribution claimant has
discharged his hability to the injured person. Although the Rules do not set
out when leave will be granted, or on what terms, it will presumably be open
to the court to ensure that the injured person will be satisfied first out of any
money that the contributor is ordered to pay. Leave may be refused if the
contributor remains at risk of an action by the injured person.

The Commission has come to the conclusion and, accordingly, recom-
mends that a contribution order should not be executed until the contribu-
tion claimant has paid more than his proportionate share of the common
liability, unless the contributor has ceased to be liable to the injured person.
When the claimant has not discharged his liability to the injured person, the
money recovered from the contributor should be paid into court in satisfac-
tion of the claimant's liability to the injured person. '^^

Recommendations

1. A person who is claiming contribution from another who is a co-
defendant in the action brought by the injured person should do so by a
crossclaim in that action, in accordance with the relevant provisions of
the Rules of Civil Procedure, unless the court before which the action is
brought has no jurisdiction to determine the claim for contribution.

'^"^ Supra, note 89.

•^^ R.S.C. 1965, O. 16, r. 7(2) and (3).

'^^ Draft Act, s. 13.

228

2. A person who is sued by the injured person should normally claim
contribution from a concurrent wrongdoer, who is not a party defend-
ant, by a third party claim in accordance with the relevant provisions of
the Rules of Civil Procedure. However, the claimant should be entitled
to institute an independent action for contribution where the court
before which the injured person's action was brought had no jurisdic-
tion to determine the claim for contribution, or it was otherwise
impracticable for the claimant to assert his right to contribution by a
third party claim.

3. A person whose right to contribution is based upon a settlement of the
injured person's claim should be entitled to institute or continue
proceedings for contribution against a person who is or may be con-
currently liable for the loss to which the settlement relates. For this
purpose, "settlement" should include a settlement approved by a court
and a judgment obtained by consent.

4. The limitation period governing the enforcement of the right of contri-
bution among concurrent wrongdoers should be two years. Where the
claim is based upon a judgment against the claimant in favour of the
injured party, the period should run from the date of the judgment.
Where the claim is based upon a settlement, the period should com-
mence from the date when the settlement was made.

5. An order for the payment of contribution should become executable
when the claimant has discharged a greater proportion of the common
liability than represents his degree of fault, or when the contributor can
no longer be sued successfully by the injured person. Where the
claimant has not discharged his liability to the injured person, the
money recovered from the contributor should be paid into court in
satisfaction of the claimant's Uability to the injured person.

CHAPTER 10

CONTRIBUTORY
NEGLIGENCE

1. INTRODUCTION

Contributory negligence means a failure to exercise reasonable care for
one's own person, property, or other recognized interest. This chapter
considers the question whether, where such conduct is one of the causes of a
plaintiff's harm, the court should be able to apportion responsibility
between the plaintiff and defendant and to reduce the plaintiff's recovery
accordingly.

(a) The Common Law Background

At common law, contributory negligence was, in theory, a complete
defence. ' The result of this rule was very harsh to the plaintiff, who could be
deprived of all compensation on account of a comparatively slight act of
carelessness. Even though the defendant was, comparatively speaking, far
more to blame than the plaintiff, the latter would recover nothing. There
seems to be no adequate theoretical justification for this rule, especially as,
from an early date, the civil law applied a different rule in the High Court of
Admiralty.^

Even the common law recognized that the effect of the rule was too
harsh, for, at an early date, there developed a subsidiary rule called the
doctrine of "last clear chance", or "last opportunity", or "ultimate negli-
gence", whereby the defendant was made liable, despite the plaintiff's
contributory negligence, if the defendant could have avoided the accident
altogether by the use of due care at the time of its occurrence.

The last clear chance rule often enabled the courts to secure a verdict
for a contributorily negligent plaintiff, and to that extent it served a useful
purpose in alleviating the unduly harsh rule of contributory negHgence. But

• Butterfield v. Forrester (1809). 1 1 East 60, 103 E.R. 926 (K.B.).

2 Hayy. LeNe\e{\%lA\ 2 Shaw, Sc. App. 395 (H.L.). In Cayzer Irvine & Co. v. Carron Co.
(1884), 9 App. Cas. 873 (H.L.), at 881, Lord Blackburn stated that there was authority
before 1824 for apportionment according to the degree of fault.

[229]

230

the doctrine of last clear chance rested on uncertain logical foundations, and
consequently acquired complexities, anomalies, and uncertainties of its
own^— a common result where the courts, unhappy with the consequences
of a legal rule, seize on an illogical means of avoiding those consequences.
The motives of the judges who developed such an exception can be under-
stood and even applauded, but the law became complex and logically
indefensible. The real cause of the difficulty was the original rule, and the
only satisfactory solution was abrogation of that rule, an event that occurred
in all Canadian common law jurisdictions by legislation.

(b) Apportionment Legislation

In 1924, Ontario became the first jurisdiction in the common law world
to introduce apportionment legislation."^ The United Kingdom followed
suit in 1945.^ The relevant sections in the Ontario legislation, the Negligence
Act,^ now provide as follows:

4. In any action for damages that is founded upon the fault or negligence of
the defendant if fault or negligence is found on the part of the plaintiff that
contributed to the damages, the court shall apportion the damages in propor-
tion to the degree of fault or negligence found against the parties respectively.

5. If it is not practicable to determine the respective degree of fault or
negligence as between any parties to an action, such parties shall be deemed to
be equally at fault or negligent.

The provisions of the Uniform Contributory Fault Act, adopted by the
Uniform Law Conference of Canada in 1984,"^ that correspond to sections 4
and 5 of the Ontario Negligence Act are as follows:

5.— (1) Where the fault of two or more persons contributes to damage
suffered by one or more of them, the liability for damages of a person whose
fault contributed to the damage is reduced by an amount of the damages
proportionate to the degree to which the fault of the person suffering the
damage contributed to the damage.

(3) If the degrees to which the fault of persons contributed to damage cannot
be determined in relation to each other, those persons shall be deemed to have
contributed equally in relation to each other.

^ See Reming, The Law of Torts (6th ed., 1983), at 243-44.

"* The Contributory Negligence Act, 1924, S.0. 1924, c. 32.

^ Law Reform (Contributory Negligence) Act, 1945, c. 28 (U.K.).

^ Negligence Act, R.S.0. 1980, c. 315.

^ Uniform Law Conference of Canada, Proceedings of the Sixty-Sixth Annual Meeting
(1984), Appendix F, Uniform Contributory Fauh Act .

The Act was based on a Report of the Alberta Institute of Law Research and
Reform. See Alberta, Institute of Law Research and Reform, Contributory Negligence

231

The wording of section 5(1) of the Uniform Contributory Fault Act
follows the wording of the former Uniform Act, first adopted in 1924 and
revised in 1935 and 1953.^ Section 6 of the 1984 Act makes it clear that each
wrongdoer is liable in solidum for the whole of the plaintiff's loss not
attributable to the plaintiff's own contributory negligence.

The balance of this chapter considers the questions whether apportion-
ment legislation should be retained and, if so, the form it should take and its
proper scope.

The more general question— whether apportionment for contributory
negligence should be retained— may be disposed of very briefly. Every
Commonwealth common law jurisdiction has apportionment legislation.
American jurisdictions, after much hesitation, are now adopting a similar
approach, either by legislation or by judicial decision.^ We believe that a
return to the common law position would be intolerably harsh. On the other
hand, a rule that the plaintiff should always recover in full would be
perceived as unfair to the defendant, perhaps leading the court to deny
liability altogether on principles of causation or assumption of risk. '^ So
long as the present system of individual responsibility remains, it would
seem that apportionment legislation should be retained. •• Accordingly, we
recommend that, subject to the recommendations made in the balance of

and Concurrent Wrongdoers, Report No. 31 (1979) (hereinafter referred to as "Alberta
Report"). See, also, the Institute's Working Paper: Contributory Negligence and Concur-
rent Tortfeasors (1975).

^ See Proceedings of the Seventh Annual Meeting of the Conference of Commissioners on
Uniformity of Legislation in Canada (1924), Appendix B; Proceedings of the Eighteenth
Annual Meeting of the Conference of Commissioners on Uniformity of Legislation in
Canada (1935), Appendix E; and Proceedings of the Thirty-Fifth Annual Meeting of the
Conference of Commissioners on Uniformity of Legislation in Canada (1953), Appen-
dix I.

It should be noted that the former Uniform Act remains in force in Alberta. See
the Alberta Contributory Negligence Act, R.S.A. 1980, c. C-23. Section 1(1) of the
Alberta Act reads:

l._(l) When by fauh of 2 or more persons damage or loss is caused to one or
more of them, the liability to make good the damage or loss is in proportion to the
degree in which each person was at fault —

^ See Wade, "Comparative Negligence— Its Development in the United States and Its
Present Status in Louisiana" (1980), 40 La. L. Rev. 299.

'*^ Moreover, such a rule would be inconsistent with this Commission's Report on Products
Liability (1979).

'^ However, the wording of the Ontario Negligence Act, supra, note 6, seems to be
unsatisfactory in several respects. For example, the use of the word "damages" in the
phrase "that contributed to the damages" is not consistent with conventional use, and
the requirement of apportionment against "parties" may leave open the possibility that
a court might, in the case of two or more wrongdoers each partly responsible for the loss,
only one of whom was a party to the plaintiff's action, find that damages should be
apportioned up to 100% between the plaintiff and the wrongdoer who was made a party.
With respect to the latter issue, see discussion infra, this ch., sec. 5(a).

232

this chapter, where a person is injured by the wrongful act of one or more
persons and the fault of the injured person is found to have contributed to
the damage, the court should determine the degrees of fault of the person or
persons and of the injured person that contributed to the damage, and
should apportion the damages in proportion to the degrees of fault that are
so found. '^

The question concerning the relative degrees of fault of the wrongdoer
and the injured person is, as we shall see,'^ one of fact, to be determined
having regard to all the circumstances of the case. In some situations, it may
be extremely difficult to make an assessment of the plaintiff's degree of fault
in relation to that of the defendant. Where this difficulty arises, there may
well be a tendency to view the plaintiff's degree of fault in isolation, rather
than comparatively, and to set the plaintiff's degree of fault at a conven-
tional figure or a conventional range.

For example, it has been suggested that, given the problems of proof
where the plaintiff's injuries are allegedly exacerbated by a failure to wear a
seat belt, courts not infrequently set the degree of fault of the plaintiff at
between ten and thirty percent. It is sometimes said that the figure is arrived
at not by a careful consideration of all the facts, but simply by the imposition
of a conventional figure. •"*

The Commission is of the view that the establishment and use of a
conventional figure respecting the plaintiff's relative degree of fault,
whether in the seat belt cases or otherwise, is simply not warranted under the
present Negligence Act. Nor do we believe that any justification for the
imposition of a conventional figure could or should exist under the provi-
sion we have just recommended for inclusion in the proposed Contribution
and Comparative Fault Act. The court's mandate is clearly and unequivo-
cally to determine the issue on a comparative basis, having regard to the
relative degrees of fault of both parties in each particular case.

^^ See the Commission's proposed Contribution and Comparative Fault Act (hereinafter
referred to as "Draft Act"), s. 2(1). The Draft Act appears as an Appendix of this Report.

'^ Infra, this ch., sec. 8.

^^ See, for example, Froom v. Butcher, [1975] 3 All E.R. 520 (C.A.), at 527-28. This
tendency appears to be most noticeable in British Columbia. See, for example. Yuan v.
Farstad (1967), 66 D.L.R. (2d) 295, 62 W.W.R. 645 (B.C.S.C), and Thorsell v. Hoem
(1984), 54 B.C.L.R. 35 (S.C). But see Halliday v. Sanrud (1979), 15 B.C.L.R. 4 (C.A.),
esp. at 10. For a review of British Columbia case law, see Thornicroft, "Contributory
Negligence and the Seat Belt Law" (1984), 42 The Advocate 29. Thornicroft agrees that
the degree of fault is a question of fact, but suggests the use of a conventional figure.
Linden endorses this suggestion, in order to ameliorate the problems of proof, but would
countenance the introduction of evidence to show that the conventional figure is not
appropriate in the particular case: Linden, "Torts— Seat Belts and Contributory Negli-
gence" (1971), 49 Can. B. Rev. 475, at 481.

The following are examples of cases in which Ontario courts considered whether
the plaintiff's failure to wear a seat belt constituted contributory negligence and, if so, to
what degree: Van Spronsen v. Gawor, [1971] 2 O.R. 729, 19 D.L.R. (3d) 53 (Co. Ct.) (no

233

2. LEGAL WRONGS SUBJECT TO APPORTIONMENT

(a) Introduction

(The proper scope of the apportionment legislation has proved to be a
most difficult question, both as a matter of construction of the current
legislation and as a question of principle. The Uniform Act provides:

1. In this Act,

'fault' means an act or omission that constitutes

(a) a tort,

(b) a breach of a statutory duty that creates a liability for damages,

(d) a failure of a person to take reasonable care of his own person,
property or economic interest,

whether or not it is intentional.

The various areas of difficulty will be considered below from the points of
view of the existing law in Ontario, the changes proposed by the Uniform
Act, and the desirability of adopting those changes.

(b) Torts

(i) Nominate Torts Involving Negligence

The present Ontario legislation— section 4 of the Negligence Act —
speaks of an action founded on "fault or negligence". This wording includes
a negligent trespass and, probably, a negligent nuisance.'^ There seems to be
no sound reason to exclude apportionment in such cases, and good reason
to avoid attaching important consequences to the name chosen by the
plaintiff for her action. The Uniform Act, by its definition of "fault",

reduction in damages); Jackson v. Millar, [1972] 2 O.R. 197, 25 D.L.R. (3d) 161 (H.C.J. ),
rev'd on other grounds [1973] 1 O.R. 399, 31 D.L.R. (3d) 263 (C.A.), trial judgment
restored [1976] 1 S.C.R. 225, 59 D.L.R. (3d) 246 (damages reduced 10%); Dodgson v.
\ Topolinsky (1980), 33 O.R. (2d) 585, 125 D.L.R. (3d) 177 (H.C.J.) (subsequent reference

' is to 33 O.R. (2d)), aff 'd (1980), 125 D.L.R. (3d) Mln (C.A.) (damages reduced 15%); and

Schmidt v. Sharpe (1983), 27 C.C.L.T. 1 (Ont. H.C.J.) (damages reduced 30%). In the
Dodgson case, Labrosse J. noted (at 586-88) the wide variation of the degree of
contributory negligence attributed to a plaintiff by Ontario and other courts in the seat
belt cases.

Bell Canada v. Cope (Samia) Ltd. (1980), 31 O.R. (2d) 571, 119 D.L.R. (3d) 254 (C.A.),
and Funnell v. CP.R. , [1964] 2 O.R. 325, 45 D.L.R. (2d) 481 (H.C.J.).

234

includes all torts, whether or not intentional, and therefore would extend
the power of apportionment to cases of negligent trespass and nuisance. The
Uniform Act would also, it seems, include cases of defamation. This
extension seems to be desirable. Accordingly, we recommend that all torts
committed by negligence should be included in the proposed contributory
negligence apportionment legislation. ^^

(ii) Torts of Strict Liability

The plaintiff's negligence has always been regarded as a defence to torts
of strict liability. ^^ It has sometimes been argued that contributory negli-
gence is an inappropriate concept where liability is strict because it is
impossible to compare the plaintiff's negligence with the defendant's strict
hability. ^^ In our opinion, however, even where the defendant's liability is
not based on negligence, the plaintiff may, by unreasonable conduct,
contribute to her own loss, and in such a case apportionment seems to be the
most appropriate solution. This was the view taken by the Commission in its
1979 Report on Products Liability }^ Moreover, the principle of apportion-
ment in cases of strict liability has been incorporated in recent Ontario
legislation. 2^ The Uniform Act, by its definition of "fault" in section 1,
includes torts of strict liability, and we recommend that such torts should be
included in our proposed Ontario apportionment legislation. ^i

(iii) Intentional Torts

Some difficulties and differences of opinion have arisen in respect of
intentional torts. While there seems to be good reason to apply apportion-
ment legislation in some cases of unintended injury— such as in the case of
unintended trespass, discussed below— greater difficulty arises where the
injury is intentional. Professor Williams supports the view that contributory
negligence should not apply to intentional wrongdoing: ^2

'The intention to injure the plaintiff negatives all excuses' This exclusion of

the defence in cases of intentional wrongdoing rests partly on ideas of policy; it
is a penal provision aimed at repressing conduct flagrantly wrongful. Also, it is a

Draft Act, s. 2(2)(a).

Rylands v. Fletcher (1866), L.R. 1 Ex. 265, at 279, aff 'd (1868), L.R. 3 H.L. 330, 37 L.J.
Ex. 161.

See American Law Institute, Restatement of the Law, Second- Torts 2d (1965), §402A,
Comment n; Daly v. General Motors Corp., 20 Cal. 3d 725, 575 P. 2d 1162 (Sup. Ct.
1978); and the discussion in Epstein, Modern Products Liability Law (1980), at 121-41.

'^ Supra, note 10, at 96-97.

2^ Dog Owners' Liability Act, R.S.0. 1980, c. 124, s. 2(3).

21 Draft Act, s.2(2)(a).

^^ Williams, Joint Torts and Contributory Negligence (1951), at 198, and Horkin v. North
Melbourne Football Club Social Club, [1983] VR. 153 (S.C).

235

result of the ordinary human feehng that the defendant's wrongful intention so
outweighs the plaintiff's wrongful negligence as to efface it altogether.

We now turn to consider whether apportionment should be available in
respect of a number of intentional torts.

a. Assault and Battery

It may be argued that a distinction may be drawn between the case
where the defendant actually intends to inflict the harm suffered by the
plaintiff, and the case where the defendant intends an assault, but causes
unanticipated harm, for example, because the plaintiff was not, as expected,
wearing safety equipment.

In the latter case, there seems to be no objection in principle to
apportionment. The loss can be said to be caused partly by the defendant's
wrong and partly by the plaintiff's own fault. If the defendant's conduct is
worthy of punishment, this object can be effected by the criminal law or by
an award of exemplary damages. From the point of view of punishment, the
extent of the plaintiff's loss is an irrelevant criterion. Often the defendant
will be deserving of greater punishment than the law of compensatory
damages can inflict. On the other hand, holding the defendant fully liable
might, in the case of a trivial assault where no harm was intended, result in
an excessive award.

In the case where the defendant actually intends the resulting harm,
apportionment may seem less apt. Suppose that the defendant, intending to
injure the plaintiff, waits until the plaintiff (contrary to proper practice)
removes her hard hat, and then drops a brick onto her head. Here it is
arguable that, as a matter of policy, the defendant ought to be fully liable for
the resulting injury. It may be said, again, that considerations of punishment
should be excluded for the reasons given in the preceding paragraph.
Nevertheless, it is difficult to attribute any significant element of cause to
the plaintiff's conduct. Admittedly, the wearing of a hard hat would have
prevented this particular injury on this particular occasion, but if the
defendant were determined to injure the plaintiff, she could presumably
have found an opportunity to do so even if the plaintiff had complied with
proper safety practice. In Professor Williams' opinion, the defendant's
wrongful intention should outweigh the plaintiff's wrongful negligence.-^

Even if one were to accept this view, however, it does not necessarily
mean that intentional injury should be expressly excluded from the appor-
tionment legislation. It is impossible for legislation to foresee all cases that
will arise. Much must be left to the courts in any event. Drafting such an
exclusion for cases where injury was intended would be a complex exercise
and might create its own anomalies. In a case where the harm suffered was

^^ Supra, note 22, at 198.

236

intended, it can be expected under the Uniform Act that, although appor-
tionment is theoretically available, the trier of fact would be very unlikely to
reduce the damages by a significant amount.

A difference of judicial and academic opinion has arisen in the case of
provocation by the plaintiff that leads to an assault by the defendant. It is
universally agreed that provocation may properly reduce an award of
exemplary damages, for it is plainly relevant in assessing to what extent the
defendant's conduct is worthy of punishment.^^ Similarly, provocation is
relevant to the assessment of aggravated damages, for one who provokes an
assault can less reasonably complain of insult or humiliation.^^

The problem arises in respect of compensatory damages. In Lane v.
Holloway,^^ the English Court of Appeal held that provocation could never
reduce compensatory damages. Lord Denning M.R. said:^^

The defendant has done a civil wrong and should pay compensation for the
physical damage done by it. Provocation by the plaintiff can properly be used to
take away any element of aggravation. But not to reduce the real damages.

Salmon L.J. said:^^

I cannot see how logically or on any principle of law the fact that the plaintiff
has behaved rather badly and is a cantankerous old man can be even material
when considering what is the proper compensation for the physical injury
which he has suffered.

However, nine years later, the English Court of Appeal reached an opposite
conclusion in a decision^^ that was barely consistent with Lane v. Holloway.

Canadian authority is divided. In a number of cases, account has been
taken of the plaintiff's conduct in assessing damages for assault,^^ but the

^'* See, for example, Waddams, The Law of Damages (1983), para. 1021, at 590.

^ For the distinction between exemplary damages and aggravated damages, see Walker v.
CFTO (1987), 59 O.R. (2d) 104, at 111, 39 C.C.L.T. 121 (C.A.).

26 [1968] 1 Q.B. 379, [1967] 3 W.L.R. 1003 (C.A.) (subsequent references are to [1968]
1 Q.B.).

2^ Ibid., at 387.

28 Ibid., at 390.

29 Murphy v. Culhane, [1977] Q.B. 94, [1976] 3 W.L.R. 458 (C.A.).

^0 See Veinot v. Veinot (1976), 22 N.S.R. (2d) 77, 31 A.P.R. 77 (S.C, T.D.), aff'd (1977), 31
A.PR. 630, 81 D.L.R. (3d) 549 (N.S.S.C, App. Div.), and Griggs v. Southside Hotel Ltd.,
[1947] O.R. 674, [1946] 4 D.L.R. 73 (H.C.J.), aff'd [1947] O.R. 680, [1947] 4 D.L.R. 49
(C.A.).

237

Courts of Appeal of Manitoba^' and Ontario"^^ have expressly followed Lane
V. Holloway. In the most recent Ontario case. Long v. Gardner^^ Smith J.
held that, although the existing legislation could be interpreted to permit
apportionment in a case of assault, it was doubtful whether provocation (not
in itself tortious) should ever be properly taken into account to reduce
compensation.

The following points may be made in favour of the view that compensa-
tory damages ought not to be reduced on account of provocation. No
question of punishment is in issue, and there seems to be no reason why the
defendant should not pay for the actual loss admittedly caused by her wrong.
To deprive the plaintiff of full compensation is to effect a forfeiture by taking
away from her, on account of conduct of which the court disapproves,
compensation to which the plaintiff is entitled by the general principles of
compensatory damages.

The Commission is not fully persuaded by these arguments. But even if
it were persuaded, it would still recommend that legislation not preclude
apportionment in cases of provocation. The problem is a difficult and
controversial one, and its solution would seem to be best left to the courts.
There is merit in uniformity of legislation on this point. The decision in
Long V. Gardner indicates that, even where no express exception is made,
the courts are still free to reduce the plaintiff's share of fault to an insignifi-
cant proportion.

For the above reasons, the Commission recommends that the proposed
apportionment legislation should apply to all cases of assault and battery,
whether or not the resulting injury was intended, and regardless of
provocation.^"^

b. Trespass and Nuisance

It has recently been established by the Ontario Court of Appeal,
overruling an earlier case,^^ that apportionment under the current legisla-
tion is available in cases of trespass, at least where the defendant is negligent.
In Bell Canada v. Cope (Sarnia) Ltd.,^^ the defendant had deliberately
destroyed a telephone cable, in the mistaken belief that it was abandoned

3^ Check V. Andrews Hotel Co. Ltd. (1974), 56 D.L.R. (3d) 364, [1975] 4 W.W.R. 370 (Man.
C.A.).

32 Shaw V. Gorter (1977), 16 O.R. (2d) 19, 77 D.L.R. (3d) 50 (C.A.), and Landry v. Patterson
(1978), 22 O.R. (2d) 335, 93 D.L.R. (3d) 345 (C.A.).

33 (1983), 144 D.L.R. (3d) 73 (Ont. H.C.J.).
3^^ Draft Act, s. 2(2)(a).

35 Hollebone v. Barnard, [1954] O.R. 236, [1954] 2 D.L.R. 278 (H.C.J.).

3^ Supra, note 15. For the facts of the case, see the judgment of Linden J. at (1980), 11
C.C.L.T. 170 (Ont. H.C.J.).

238

and useless. The facts of this case illustrate that trespass can be intentional
without the defendant intending to cause the harm suffered. The same can
be true in cases of nuisance. In such circumstances, apportionment seems
appropriate. Where the harm is actually intended, it can be expected that,
even under legislation requiring apportionment, the court would generally
allow full or virtually full recovery to the plaintiff.^^ It is recommended,
therefore, that, under the proposed legislation, apportionment should be
available in cases of trespass or nuisance. ^^

c. Fraud

It has long been established that the gullibility of the plaintiff in
beheving the defendant's misrepresentation, or lack of care in failing to
make an independent investigation, is no defence in an action based on
fraud.^^ It does not lie in the mouth of one who makes a statement on which
another relies to say that the other was careless in believing her. Although the
wording of the Uniform Act would appear to permit apportionment
between fraudulent and negligent tortfeasors, it would seem that it was not
intended to alter the abovementioned rule. In Anderson v. Stevens, ^^ the
British Columbia Supreme Court held, in a contribution case, that the word
"fault" in the provincial Negligence Act"^^ included fraud, and therefore that
the Act permitted contribution between fraudulent and negligent tortfea-
sors. It has not been suggested that this decision has the effect of reversing
the rule that carelessness in believing a misrepresentation is no defence.

Cases can be imagined where apportionment between fraudulent and
negligent tortfeasors would be appropriate, as, for example, where the
defendant fraudulently induces the plaintiff to purchase defective goods,
and the plaintiff then unreasonably uses them after observing the defect. It
would seem likely that, even if the power of apportionment is extended to
cases of fraud, the courts are unlikely to use the power where the plaintiff's
only fault is to have reUed on the defendant's word. Consequently, it is
recommended that, under the proposed legislation, apportionment should
be available in cases of fraud."^^

37
38
39

See Long v. Gardner, supra, note 33.

Draft Act, s. 2(2)(a).

See Reming, supra, note 3, at 601, and Redgrave v. Hurd{\SS\), 20 Ch.D. 1, [1881-85] All
E.R. Rep. 77 (C.A.) (equitable relief not affected).

"^0 (1981), 125 D.L.R. (3d) 736, [1981] 5 W.W.R. 550 (B.C.S.C).
'^^ R.S.B.C 1979, c. 298.
^^2 Draft Act, s. 2(2)(a).

239

d. Conversion and Related Torts

A question arises whether contributory negUgence ought to apply in
conversion and other similar actions involving the wrongful interference
with goods, such as trespass, or indeed where the true owner has recovered
the goods without the assistance of a court.

In some cases, apportionment seems appropriate, particulariy where
the wrongdoer has not actually benefited from the tort. Professor Williams
gives the example of a defendant who pays money for property to a third
party whose fraud against the plaintiff has been facilitated by the plaintiff's
carelessness.'*^ To give another example, the defendant, acting on the
plaintiff's negligent assurance that certain property belongs to the defend-
ant, may donate the property to a charity.

The Commission is considering, in its current Project on Remedies for
Wrongful Interference with Goods, the relationship between contributory
negligence and the property torts. Accordingly, we make no recommenda-
tion on this matter in this Report."*"*

e. Defamation

A further issue arises concerning whether apportionment should be
available in cases of defamation. A case could be imagined where the
plaintiff carelessly leads the defendant to believe that the plaintiff is guilty of
a crime, perhaps by behaving in a suspicious manner and by unreasonably
refusing to give an explanation of her conduct. If the defendant subse-
quently publishes an allegation that the plaintiff has committed the crime, it
could be said that the fault of the plaintiff has contributed to the resulting
damage. One commentator has written that the plaintiff's conduct is a
factor that the jury is entitled to take into account even apart from
apportionment legislation."*^ Plainly, it would reduce any punitive element
in the damages and often would be taken into account in the somewhat
vague process of assessment of compensatory damages.

We note that the Uniform Act, extending apportionment to all torts,
would apply to the tort of defamation. The Commission agrees and,
accordingly, we recommend that the proposed legislation governing appor-
tionment should apply in cases of defamation."^^

"*^ Williams, supra, note 20, at 212. However, Williams states that "it is usually held that
the defendant has no defence to an action for conversion even though he has given full
value for the property to a deceitful stranger and even though the plaintiff is guilty of
contributory negligence" {ibid.).

^^ Draft Act, s. 2(2)(a).

'*5 Lewis (ed.), Galley on Libel and Slander (8th ed., 1981), §1451, at 592-93.

^ Draft Act, s. 2(2)(a).

240

(i) Present Law

Even in the absence of apportionment legislation specifically applic-
able to breach of contract, conduct of the plaintiff that contributes to
damage caused by the defendant's breach of contract can operate as a
defence in a variety of ways. It may be said that the plaintiff's conduct
breaks the chain of causation, that it makes the damage claimed too remote,
or that the scope of the defendant's obligation is impliedly restricted.
Furthermore, in many cases, the plaintiff's careless failure to protect her
own interests will occur after the defendant's breach and will operate as a
failure to mitigate loss."^^

These defences, however, compel an all or nothing choice. Consider, as
an example, the facts of Lexmead (Basingstoke) Ltd. v. Lewis, "^^ where a
seller, in breach of warranty, supplied a defective trailer hitch, and the buyer
suffered loss by carelessly using it, knowing it to be damaged. It is not clear
whether, in general, plaintiffs or defendants benefit from all or nothing
choices. Denying the possibility of an intermediate solution is no benefit to
the plaintiff if it leads the court to hold that the defendant's breach of
contract cannot be said to have caused the plaintiff's loss or that the
defendant's warranty cannot be construed to apply in the circumstances. In
many cases where a loss is caused partly by the defendant's wrong and partly
by the plaintiff's carelessness, there seems as strong a case as elsewhere for
apportionment.

Under existing law, there are three techniques whereby apportionment
may be made available in contract cases. It may be held (1) that the
Negligence Act^^ applies to contracts, or (2) that the breach of contract also
constitutes a tort to which the Negligence Act applies, or (3) that apportion-
ment is available in contract cases at common law, irrespective of the
Negligence Act.

A number of cases decided at first instance in England^^ and British

^'^ It has been pointed out that the doctrine of mitigation applies in many cases that would
be treated, from the tort point of view, as cases of contributory negligence, because a
breach of contract (unlike the tort of negligence) is actionable before any damage occurs,
so that the duty to mitigate operates as soon as the plaintiff knows of the breach, an^ if
the plaintiff can then, acting reasonably, avoid a loss but fails to do so, recovery will be
denied. See Coote, "Contract, Tort and Contributory Negligence", [1982] N.Z.L.J. 294.

^^ [1982] A.C. 225, [1981] 2 W.L.R. 713 (H.L.).

^^ Supra, note 6.

^^ De Meza v. Apple, [1974] 1 Lloyd's Rep. 508 (Q.B.), aff'd on other grounds [1975] 1
Lloyd's Rep. 498 (C.A.), and Artingstoll v. Hewen's Garages Ltd., [1973] R.T.R. 197
(Q.B.). But see Basildon District Council v. J.E. Lesser (Properties) Ltd., [1985] Q.B.
839, [1984] 3 W.L.R. 812, and Rowe v. Turner Hopkins & Partners, [1980] 2 N.Z.L.R.

241

Columbia^* have held that the word "fauh" in the apportionment legislation
of those jurisdictions extends to breach of contract. In the Ontario case of
Bank of Nova Scotia v. Terry, ^^ a similar conclusion was reached by the trial
judge, although the decision was reversed on appeal. There, a bank had
suffered a loss on account of the negligence of the defendant solicitor, but
the loss could have been avoided by care on the part of the bank in its
dealings with the solicitor. At trial, O'Brien J. held that, even if the liability of
the solicitor was based in contract only, the Negligence Act appliedi^"^

I am satisfied the damages which flowed from her action were a result of 'fault'
which I find to be a term of broader meaning than negligence.

It is not, however, clear that this interpretation will be accepted by
higher courts. As indicated, Terry was reversed on appeal. ^^^ In Dominion
Chain Co. Ltd. v. Eastern Construction Co. Ltd.,^^ the Ontario Court of
Appeal held that the word "fault" in the contribution section of the Negli-
gence Act did not apply to breaches of contract, and the Supreme Court of
Canada, without definitely deciding the point, inclined to the same view.^^ It
is true that the case was concerned with contribution among wrongdoers
and not with contributory negligence; however, a decision on the meaning
of the word "fault" in a provision separated by only one section from the
contributory negligence section must be highly persuasive on the construc-
tion of section 4.

Turning to the second means of apportioning damages in contract
cases, a series of decisions, of which the Dominion Chain Co. Ltd. case is

550 (H.C.). See, also, Swanton, "Contributory Negligence as a Defence to Actions for
Breach of Contract" (1981), 55 Austl. L.J. 278, at 283-85.

^' mst Coast Finance Ltd. v. Gunderson. Stokes. Walton & Co. (1974), 44 D.L.R. (3d) 232,
[1974] 2 W.W.R. 428 (B.C.S.C), rev'd on other grounds (1975), 56 D.L.R. (3d) 460
(B.C.C.A.); Emit Anderson Constr. Co. Ltd. v. Kaiser Coal Ltd.. unreported (1972,
B.C.S.C), referred to in Truman v. Sparlling Real Estate Ltd. {\911l 3 C.C.L.T. 205
(B.C.S.C); and Carmichael v. Mavo Lumber Co. Ltd. (1978), 85 D.L.R. (3d) 538
(B.C.S.C).

^2 (1982), 141 D.L.R. (3d) 438 (Ont. H.C.J. ), rev'd (1984), 46 O.R. (2d) 180, 9 D.L.R. (4th)
101 (CA.) (subsequent reference is to 141 D.L.R. (3d)).

" Ibid., at 450.

5"* Supra, note 52. In Husky Oil Operation Ltd. v. Oster (1978), 87 D.L.R. (3d) 86 (Sask.
Q.B.), at 91, the Saskatchewan Contributory Negligence Act , R.S.S. 1965, c. 91, was said
to be "of course, without applicability in the case of a breach of contract", but liability
was apportioned on the basis of concurrent liability in tort. A similar result was reached
in Canadian Western Natural Gas Co. Ltd. v. Pathfinder Surveys Ltd. (1980), 12 Alta.
L.R.(2d)135(C.A.).

^^ (1976), 12 O.R. (2d) 201, 68 D.L.R. (3d) 385 (C.A.), aff'd {.sub nom. Giffels Associates
Ltd. V. Ea.stern Construction Co. Ltd) [1978] 2 S.CR. 1346, 84 D.L.R. (3d) 344
(subsequent references are to [1978] 2 S.C.R.). See, also, Dabous v. Zuliani (1976), 12
O.R. (2d) 230, 68 D.L.R. (3d) 414 (C.A.).

^^ 5//pra,note55,atl354.

242

one, has held that a breach of a contractual duty of care constitutes a tort.^^
Thus, apportionment may be available under the Negligence Act on the
basis that the plaintiff's action lies in tort. What is not clear is whether the
plaintiff, should she wish to do so, can avoid the possibility of apportion-
ment by bringing her action solely in contract. It cannot be satisfactory for
the availability of apportionment to depend on the form of action chosen by
the plaintiff.

The third technique of apportioning damages in contract cases is to
hold that, even though the Negligence Act does not apply, damages can be
apportioned at common law by analogy with the Act. This bold and novel
approach has been adopted in two recent Ontario cases at first instance, ^^
and was described by the Ontario Court of Appeal in Cosyns v. Smith ^^ as an
"attractive conclusion", although the point did not require a definite
decision in that case.

(ii) Should All Breaches of Contract be Affected?

a. General

The Canadian Uniform Act limits its scope to "a breach of duty of care
arising from a contract that creates a liability for damages". ^^ This was a
carefully considered limitation. In the draft presented for consideration in
1983,^^ the corresponding definition had included any breach of contract
that created a liability in damages, but this version was not approved.^^

The Report of the Alberta Institute of Law Research and Reform, upon
which the Uniform Act was based, had recommended that not all breaches
of contract should give rise to a right to apportionment. The Institute
stated:^^

^^ Husky Oil Operation Ltd. v. Oster, supra, note 54; Midland Bank Trust Co. Ltd. v. Hett,
Stubbs & Kemp, [1979] Ch. 384, [1978] 3 W.L.R. 167; Jacobson Ford-Mercury Sales Ltd.
V. Sivertz (1979), 103 D.L.R. (3d) 480, [1980] 1 W.W.R. 141 (B.C.S.C); and John Maryon
International Ltd. v. New Brunswick Telephone Co. (1982), 141 D.L.R. (3d) 193
(N.B.C.A.).

Tompkins Hardware Ltd. v. North Western Flying Services Ltd. (1982), 139 D.L.R. (3d)
329 (Ont. H.C.J.), and Ribic v. Weinstein (1982), 140 D.L.R. (3d) 258 (Ont. H.C.J.).

(1983), 146 D.L.R. (3d) 622 (Ont. C.A.), at 628. See, also. Smith v. Mclnnis, [1978] 2
S.C.R. 1357, at 1377-78, 91 D.L.R. (3d) 190, per Pigeon J., dissenting, and Speed v.
Finance America Realty Ltd. (1979), 11 R.RR. 161 (N.S.S.C, App. Div.).

Supra, note 7, s. 1(c), under "fault".

See Uniform Law Conference of Canada, Proceedings of the Sixty-Fifth Annual Meeting
(1983), at 28, and Proceedings of the Sixty-Fourth Annual Meeting (1982), Appendix J,
at 162.

See Proceedings of the Sixty-Fifth Annual Meeting, supra, note 61, at 28.

^^ Alberta Report, supra, note 8, at 15.

58
59

60
61

243

We think that the principle of contributory negligence should not be
extended to all breaches of contract. Contributory negligence is not relevant in
regard to a contract which imposes an absolute obligation, for instance, to
deliver a certain quantity of wheat.

The Report went on to point out, however, that where a contractual duty of
care was in issue, concurrent liability in tort was usually present, and that it
would be anomalous to make the availability of apportionment depend on
the form of action selected by the plaintiff.^'* The Institute conceded that
there would be difficulties in distinguishing between cases of breach of a
contractual duty of care and breaches of other contractual obligations,^^ but
nevertheless recommended that apportionment should be available only in
case of breach of a duty of care.

The English Law Commission, in declining to recommend changes to
the law of contributory negligence in the context of its Report on
Contribution,^^ referred to difficulties that could arise if apportionment
were available in respect of breaches of contract. The Commission stated:^^

In our working paper we mentioned that the existing law of contributory
negligence might be in need of reform but that it was not appropriate to deal
with it as part of our work on the law of contribution. We drew attention to the
difficulties in the existing law where the plaintiff claims damages for breach of
contract. It may be that where the breach of contract in question consists of the
breach of a contractual duty of care the defendant is entitled to a reduction in
damages for which he is otherwise liable on the ground of the plaintiff's
contributory negligence. However, where the contractual breach is of a duty
other than a duty of care contributory negligence on the part of the plaintiff is
not, it seems, available as a partial defence. Many of those we consulted
expressed the view that this was an anomaly, and that the Law Reform
(Contributory Negligence) Act 1945 should be examined with a view to its
reform. Some went further and proposed that the overhaul of the law of
contributory negligence should be done at the same time as that of the law of
contribution; they pointed out that the subjects were related and to take them
separately would mean reforms of a 'piecemeal' kind. These arguments have
force and if we were satisfied that the reform of the law of contributory
negligence could be dealt wdth satisfactorily in a summary way we might have
felt able to adopt them. However we doubt whether the partial defence of
contributory negligence could be slotted into the general law of contract
vWthout serious repercussions on, for instance, the present law of 'discharge by
breach' and on the assessment of damages for breach of contract. Take, for
example, the familiar case of the builder who abandons work because the
person who engaged him has delayed the payment of an installment. If he is not
entitled, by the other's breach, to stop work altogether, should he nevertheless

^"^ Ibid., at 24.
^5 Ibid., at 25.

^^ England, The Law Commission, Law of Contract: Report on Contribution, Law Com.
No. 79(1977).

^"^ //7/fi^.,para. 30,al9-10.

244

be allowed to rely on it as a partial defence to a claim for damages? Our
preliminary view when we referred to the topic of contributory negligence in
our working paper was that its reform would call for deeper study than we could
conveniently give it in a paper on contribution. We are still of this view, and are
supported in it by comments we received from those we consulted. We are
therefore not making any proposals in this report for changes in the law of
contributory negligence.

Other cases can be envisaged in which apportionment might lead to
odd results. Often, where the defendant has made a disadvantageous bar-
gain, she is looking for an excuse to terminate the contract. Consider the
case of a charter party on terms that have turned out to be advantageous to
the charterer. The owner may decide to scrutinize the charterer's perform-
ance in order to detect a deficiency. The charterer carelessly makes a freight
payment a few hours late, and the owner purports to terminate. Under the
present law, if it is determined that the termination is wrongful, the owner
will be liable to pay compensation in full for the charterer's loss. It would
seem odd to introduce apportionment in a case like this. The charterer's loss
in such a case is usually equal to the owner's gain. There is incentive enough
under the present law for the owner to repudiate her obligation. It would
greatly increase the incentive if the prospect were added that, even if found
to be in breach of contract, the owner might not have to pay full compensa-
tion. This would enable a contract breaker to retain a benefit (a part of the
benefit of the bargain) as a result of her own wrong.

Another difficult case is that of specific performance. Suppose D agrees
to sell Blackacre to P at a price of $100,000. D then discovers that the value
of Blackacre is $150,000 and instructs her solicitor to seek a justification to
terminate. P commits a minor breach of contract, and D, in breach of her
own obligations, purports to terminate. If P obtains a decree of specific
performance, she will capture the whole benefit of the bargain, and it would
be anomalous to have a rule of damage assessment that differed substan-
tially in economic effect. The Courts of Justice Act, 1984,^^ empowers the
court to award damages in substitution for an award of specific perform-
ance, thereby implying that such an award would have equivalent economic
effect. Again, if specific performance had a substantially more beneficial
effect than an award of damages, there would be a case for a widespread
extension of the right to specific performance, for the basic test for availabil-
ity of specific performance is inadequacy of an award of damages. If an
award of damages were liable to fall short of full compensation because of
apportionment, the plaintiff would be able to argue that this alone justified a
decree of specific performance.

These problems might be met with the argument that the courts would
not be compelled in practice to apportion damages, even if the statute were
extended to cover all breaches of contract. On the other hand, in view of the
limited scope of the Canadian Uniform Act^^ and the hesitation exhibited

^^ S.O. 1984, c. 11, s. 112.

^^ See supra, note 60 and accompanying text.

245

by law reform bodies in other jurisdictions, it would seem somewhat rash to
recommend extension of apportionment to all breaches of contract unless
there is a very strong case for such a reform. Before reaching a conclusion,
various possible approaches, other than that suggested by the Uniform Act,
will be discussed.

b. Possible Approaches to Apportionment for Breach of
Contract

(1) Breach of Warranty and Physical Damage

The American Uniform Comparative Fault Act^^ defines "fault" as
follows:

1.— (b) 'Fault' includes acts or omissions that are in any measure negligent or
reckless toward the person or property of the actor or others, or that subject a
person to strict tort liability. The term also includes breach of warranty,
unreasonable assumption of risk not constituting an enforceable express con-
sent, misuse of a product for which the defendant otherwise would be liable,
and unreasonable failure to avoid an injury or to mitigate damages

On the inclusion of breach of warranty, the Comment to the American
Uniform Act states:^'

An action for breach of warranty is held to sound sometimes in tort and
sometimes in contract. There is no intent to include in the coverage of the Act
actions that are fully contractual in their gravamen and in which the plaintiff is
suing solely because he did not recover what he contracted to receive. The
restriction of coverage to physical harms to person or property excludes these
claims.

The modern American law of strict products liability has developed
largely from the concept of warranty^^ and it would be anomalous for
apportionment to apply to products liability actions framed in tort but not
to those framed in warranty. In the Ontario law of products liability, the law
of warranty imposes, within a limited class of cases, a strict liability for
damage caused by defective products.^^ In a case where the plaintiff's loss is
caused partly by breach of warranty and partly by careless use of the
product— as, for example, in the case of the defective trailer hitch, discussed
above^"^— apportionment seems appropriate. Indeed, it is not clear that the

^^ National Conference of Commissioners on Uniform State Laws, Uniform Comparative
Fault Act, Uniform Laws Annotated, Vol. 12 (1988 Pocket Part).

^' Ibid., 1988 Pocket Part, at 39.

^2 See Prosser, "The Fall of the Citadel" (1966), 50 Minn. L. Rev. 791.

^^ See Ontario Law Reform Commission, Report on Products Liability, supra, note 10, at

23-27.

^'^ See text accompanying note 48, supra.

246

exclusion of apportionment is beneficial to plaintiffs because, as indicated
above, an "all or nothing" choice will often leave the plaintiff with nothing.

This Commission, in its 1979 Report on Products Liability, recom-
mended a rule of strict liability for defective products and that apportion-
ment should apply in case of a loss contributed to by the plaintiff's
negligence.^^ Consistent with this conclusion, we are of the view that
apportionment should apply at least to cases of physical damage caused
under the present law by breach of warranty of the supplier of a product. A
case can also be made for including other breaches of contract that cause
physical damage. There seems to be no good reason to exclude apportion-
ment in the case of a breach of warranty by a supplier of services, or, indeed,
any breach of contract, that causes personal injury or property damage.
These are not the types of case, identified above, in which the contract
breaker profits at the expense of the innocent party.^^

(2) Reliance on Promised Performance

In its Working Paper on contribution,^^ the New Zealand Contracts
and Commercial Law Reform Committee referred to the restriction of
apportionment, in the Alberta Institute's Report, to cases of breach of a duty
of care, and said that it was "inclined tentatively to prefer a reform of wider
application".^^ Nevertheless, the Committee proposed to limit the applica-
tion of apportionment in case of breach of contract by another principle. Its
proposal reads as follows: ^^

(1) For the purposes of this Act 'fault' means, on the part of a plaintiff or
defendant (and whether by act or omission), negligence, breach of statutory
duty, breach of contract or any other breach of a civil duty owed by the one to
the other and, in the case of a plaintiff, any unjustified failure to take adequate
care for his own interests.

(2) A failure by a plaintiff to take adequate care for his own interests is
unjustified if it is not excused (i) by the terms of a contract or other agreement
between the plaintiff and the defendant, or (ii) by the rules of the common law
or of equity, or (iii) by the provisions of any enactment.

(3) Care taken by a plaintiff for his interests is not inadequate, by reason only
and to the extent that it constitutes a failure to take precautions against

''^ See supra, note 10, at 96-97, and s. 6(1) of the Draft Bill proposed in the Report on
Products Liability, supra, note 10.

See discussion supra, this ch., sec. 2(c)(ii)a.

New Zealand, Contracts and Commercial Law Reform Committee, Working Paper on
Contribution in Civil Cases (1983).

"^^ Ibid., para. 8.6, at 25.

''^ //7/W., para. 9.1, at 30.

247

(a) the breach by the defendant of an obligation owed to the plaintiff
under the terms of a contract, or

(b) the deliberate fault of a defendant before the plaintiff knows or ought
to be taken to know that, as the case may be, the breach or the
deliberate fault has occurred.

By way of explanation, the Committee stated:

[I]t is (agreement apart) not open to a contract-breaker to suggest that the
innocent party showed lack of care because, before breach, he acted on the basis
that the wrongdoer would perform his contract. Hence, in a case, say, between a
building owner and a contractor, it could not be held against the owner that he
failed to tell the contractor all he knew about the site if the entire responsibility
for its suitability had been allocated to the contractor by the building contract.

This restriction would, it seems, exclude apportionment in many cases
where apportionment would be permitted under the terms of the Canadian
Uniform Act. For example, in a case where loss was caused by the defend-
ant's negligent professional opinion based on misleading or incomplete
information given by the plaintiff, apportionment would be excluded. It is
not clear, therefore, that the New Zealand proposal is wider than the
Uniform Act, for in the case just mentioned it seems that the Uniform Act
would permit apportionment. Furthermore, there seems to be no strong
reason to exclude apportionment in such cases unless the agreement allo-
cates the entire risk to the defendant.^'

The Commission recommends that, subject to the recommendation we
make later concerning the right of the parties to agree otherwise,^^ appor-
tionment should not be excluded where the plaintiff has relied on the
defendant's contractual assurance of performance.^^ Accordingly, where,
for example, the plaintiff has negligently withheld critical information from
the defendant, thereby affecting the defendant's performance, apportion-
ment would be available. However, where the plaintiff has not acted in this
manner, and where the plaintiff's reliance on the defendant's assurance of
performance is reasonable, there would be no basis for finding that the
plaintiff's negligence has contributed to the loss.^"^

^^ Ibid., para. 8.6(d), at 29.

^' As in Bank of Nova Scotia v. Terry, supra, note 52.

^^ See infra, this ch., sec. 2(c)(ii)c.

^^ Draft Act, s. 2(2)(c) and (d).

^'^ In Sirois v. Federation des Enseignants du Nouveau- Brunswick (1984), 56 N.B.R. (2d)
50, 28 C.C.L.T. 280 (Q.B.), a teachers' federation was held to be liable in tort for
misinforming its members of their rights to unemployment insurance benefits, but the
members were held to have been contributorily negligent in not consulting the associa-
tion office, as invited. Apportionment would seem appropriate in a similar case based
on breach of contract.

248

(3) Deliberate Breach

Professor Williams, in discussing the scope of contributory negligence
at common law, suggests that the defence applied to "unintentional"
breaches of contract,^^ and, in discussing the scope of the English apportion-
ment legislation, he suggests that "fault" extends to negligent breaches of
contract. ^^ In his draft Act, however, he includes all breaches of contract
"whether or not the wrong is intentional".^'' Often an intentional breach of
contract causes unintended harm. As in the case of torts, discussed above,^^
there seems no strong reason to exclude intentional breaches of contract
from the scope of the apportionment legislation, and we so recommend.^^

c. Conclusions

As has been shown, there are a considerable number of difficulties in
this area. The Canadian Uniform Act deals with the strongest case for
apportionment, that is, where there is a breach of a contractual duty of
care— a case where there is concurrent liability in contract and tort and
where a serious anomaly would arise in permitting apportionment in the
one form of action and denying it in the other. Consequently, we have
concluded that Ontario should go at least as far as the Uniform Act.

Should it go further? There is a strong argument for including all
breaches of contract in the legislation and leaving it to the courts to exclude
apportionment in the appropriate cases. Further, there is the danger of
inhibiting the development of the power of apportionment at common law,
a power asserted by some recent Ontario cases. On the other hand, the
inclusion of all contracts may attract criticism along the lines discussed
above, and it may seem a weak response to say, with respect to legislation on
its face positively requiring apportionment, that the courts can be expected
not to apportion in improper cases. On balance, we have concluded that the
proposed apportionment legislation should not apply to all breaches of
contract, but that, subject to certain amendments and one extension, the
position of the Uniform Act should be adopted.

Accordingly, we recommend that, like the Uniform Act, the proposed
Contribution and Comparative Fault Act should contain a provision mak-
ing apportionment applicable in the case of breach of a duty of care arising
from a contract that creates a liability for damages.^^ For reasons stated

^^ Williams, supra, note 22, at 214 et seq.

^^ Ibid., at 328 et seq.

^^ Ibid., at 529, s. 39(1) (definition of "wrong").

^^ See supra, this ch., sec. 2(b)(iii).

^^ See the closing portion of Draft Act, s. 2(2).

^^ Ibid., s. 2(2)(c).

249

above,^' we would go further than the Uniform Act in one respect and
recommend that apportionment should apply in the case of personal injury
or property damage caused by a breach of contract.^^ Apportionment for
loss caused by breach of contract should, however, be subject to any
agreement, express or implied.^^ Finally, we have concluded that, as a
general principle, the proposed Act should also provide that nothing in the
Act shall be construed to remove any power of apportionment the courts
have apart from statute. We shall deal with this matter below^"^

(d) Breach of Statutory Duty

The Canadian Uniform Act includes in its definition of "fault" in
section 1 "a breach of a statutory duty that creates a liability for damages". It
has been recendy held by the Supreme Court of Canada that a breach of a
statutory duty does not in itself give rise to civil liability.^^ However, there
are cases where the Legislature expressly creates a cause of action and, in
such cases, in the absence of a contrary intention in the legislation, there
seems no reason to exclude apportionment. Accordingly, it is recommended
that, like the Uniform Act, the proposed Contribution and Comparative
Fault Act should include a provision extending apportionment to a breach
of a statutory duty that creates a liability in damages.^^

(e) Breach of Fiduciary Duty

In this section, we shall consider whether the partial defence of contrib-
utory fault ought to be extended by statute to breach of fiduciary duty,
including breach of trust. The issue is controversial, particularly in the
traditional trust context, given the nature of the relationship between
beneficiary and trustee and the onerous duties placed on the latter. The
matter has also generated some debate in the context of other fiduciary
relationships, having regard to the gradual extension, for a variety of
reasons, of "fiduciary" obligations into different areas, although it is not
entirely clear to what extent these new fiduciary relationships give rise to the
same rights and duties as those found in the ordinary trust context.

There is virtually no legislation,^^ and little case law, concerning the
relationship between contributory fault and breach of fiduciary duty

^' Supra, thisch., sec. 2(c)(ii)b(l).

^2 Draft Act, s. 2(2)(d).

^^ Ibid., s. 2(4).

^^ Infra, this ch., sec. 9.

^^ The Queen in right of Canada v. Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205, 143
D.L.R. (3d)9.

^^ DraftAct, s. 2(2)(b).

^^ Although see s. 34(1) of the Trustee Act, R.S.O. 1980, c. 512. Under this section, where a

250

However, in Carl B. Potter Ltd. v. The Mercantile Bank of Canada, "^^ the
Supreme Court of Canada did consider the question whether the term
"fault" in the Nova Scotia Contributory Negligence Act"^^ was wide enough
to include a breach of trust. Ritchie J., for the Court, stated that, "whatever
extended meaning may be given to the word 'fault' it must involve a breach
of duty of some kind".'^^ He then went on to say that there was "no
authority for the proposition that a cestui que trust owes a duty to its trustee
to ensure that the terms of the trust are observed". '^^

In a recent New Zealand case, Day v. Mead, '^^ the Court of Appeal
reached the opposite conclusion in a different fiduciary context. In that
case, the plaintiff sued his former solicitor, who had advised the plaintiff to
invest in a company of which the solicitor was a director. The solicitor failed
to make adequate disclosure of this conflict of interest as well as other
conflicts. The company ultimately went into receivership. The trial judge
held for the plaintiff, but reduced the damages awarded on the ground that,
before making the investment, it would have been prudent for the plaintiff
to obtain completely independent and competent financial advice. The
plaintiff appealed, arguing that damages for compensation for breach of
fiduciary duty were not apportionable. The appeal was dismissed.

The reasons for dismissing the plaintiff's appeal differ from one judge
to another, although all members of the Court of Appeal were willing to
import some notion of comparative fault or responsibility into the equitable
context under consideration. However, it bears emphasizing that the Presi-
dent of the Court did acknowledge that, having regard to the high standard
of conduct expected of fiduciaries, a strong case must be made out to relieve
a fiduciary of complete responsibility.

While the Alberta Report does address the issue, at least insofar as
trusts are concerned, it offers very little assistance in determining precisely
why contributory fault should or should not be made applicable in that

breach of trust is actually requested, or consented to in writing, by a beneficiary, the
court has a power to make "such order as to the court seems just for impounding all or
any part of the interest of the beneficiary in the trust estate by way of indemnity to the
trustee. . .". In its Report on the Law of Trusts (1984), Vol. II, at 384, the Commission
recommended that this power should be continued in the Trustee Act proposed in that
Report.

^^ [1980] 2 S.C.R. 343.

^^ R.S.N.S. 1967, c. 54, s. 1.

'^ Supra, note 98, at 352.

•01 Ibid.

'0^ Unreported (July 31, 1987, N.Z.C.A.). The facts appear in the report on an interlocutory
matter: Mead v. Day, [1985] 1 N.Z.L.R. 100. For a recent discussion of this case and its
implications, see "Compensation for Breach of Fiduciary Duty", by the Honourable
Mr. Justice Gummow, of the Federal Court of Australia, a paper presented to The
International Symposium on Trusts, Equity and Fiduciary Obligations, Faculty of Law,
University of Victoria (February 14-17, 1988). The discussion appears at 40-48.

251

context. The Alberta Institute of Law Research and Reform, in deciding to
exclude breach of trust from the scope of the apportionment legislatipn,
dealt with the matter as follows: "We think that the liability between the
trustees and the beneficiaries of trusts are [sic] adequately and properly
covered by the law of trusts". ^^^ Since the Uniform Act is based largely on
the Alberta Report, it is not surprising that the Act contains no reference to
a breach of trust. Nor did this Commission examine the general issue of
apportionment of damages between beneficiary and trustee in its Report on
the Law of Trust sJ^"^

The issue under consideration is, we believe, an important one. It is, as
well, exceedingly difficult, and is complicated by the increasing number and
variety of situations in which a fiduciary obligation is now imposed as a
matter of law. It may be that a case can be made for extending apportion-
ment to some breaches of fiduciary duty—perhaps, for example, where such
a duty arises in commercial situations quite distinct from the more tradi-
tional trust context.

However, the Commission is not convinced that a statutory extension
of the doctrine is desirable, at least at this time. For one thing, it may be
argued forcefully that the essence of a fiduciary, and especially a trust,
relationship is that the beneficiary should be entitled to rely entirely on the
fiduciary, and that the beneficiary should not be penalized for failing to take
independent steps to protect her own interests or to check that the fiduciary
is doing her duty. While the notions of fault or negligence pertain to the duty
to take reasonable care, the duty of a fiduciary is, as we have said, consider-
ably higher. There is a danger, then, that the introduction of contributory
fault will subvert or dilute this stricter duty.

Moreover, the law in this area is fluid and developing; for this reason,
we are of the opinion that further time is needed to examine more fully
whether contributory fault is an appropriate principle to be imported into
the many different contexts in which a fiduciary obligation is imposed. Such
an examination can and, in our view, should be undertaken by the courts. It
will be recalled that a similar type of approach has been proposed by the
Commission with respect to breaches of contract. '^^

Accordingly, the Commission recommends that the proposed appor-
tionment legislation should not be extended to breach of fiduciary duty,
including breach of trust. Rather, the issue of the applicability of apportion-
ment in this context should be left to be determined by the courts on a case-
by-case basis. '^^

^^^ Alberta Report, supra, note 8, at 25.

^^ But see supra, note 97.

'^^ See supra, this ch., sec. 2(c)(ii)c.

•^ Draft Act, s. 2(7). See, further, infra, this ch., sec. 9.

252

(0 Losses Subject to Apportionment

In the previous sections of this chapter, we recommended that appor-
tionment should be available where liability for damages arises from a tort
or breach of statutory duty, or from a breach of contract that causes physical
damage (that is, personal injury or property damage) or a breach of a
contractual duty of care. The issue to be resolved in this section concerns the
kinds of loss that ought to be subject to apportionment, bearing in mind
these recommendations.

Under the American Uniform Comparative Fault Act, although the
"specific application of [the principle of apportionment]. . .is confined to
physical harm to person or property", the Comment is clear that this
principle "necessarily includes consequential damages deriving from the
physical harm".'^^ While "matters like economic loss" are not specifically
included in the types of loss subject to apportionment, the Comment states
that apportionment may still apply under the common law. ^^^

The former versions of the Canadian Uniform Contributory Fault Act
did not deal expressly with the issue. However, in a Report by the Alberta
Commissioners to the Uniform Law Conference of Canada, made prior to
the adoption of the final version of the Act, the Alberta Commissioners
stated: '09

We are not sure. . .that damage to person or property includes economic loss, or
that a failure to take care of person or property includes a failure to take care of
one's economic interests. We take it that, if the Conference intends to extend
the defence of contributory fault to all claims based on contract, it must intend
to include claims for economic loss. We would recommend that, whether or not
the Conference makes the extension, the terminology be changed so that
'damage' would clearly include economic loss, and so that contributory 'fault'
would clearly include a failure of a person to take reasonable care of his own
interests of any kind.

This view was accepted by the Conference, so that section 1 of the present
Uniform Act defines "damage" to include "economic loss" and "fault" to
include "a failure of a person to take reasonable care of his own person,
property or economic interest".

The Commission believes that there are sound reasons for adopting the
position taken in the Uniform Act and, therefore, permitting apportion-
ment where any kind of loss has occurred as a result of the kinds of
wrongdoing mentioned above. Problems could arise in framing legislation
so as to draw a clear distinction between various types of loss. Attempts to

'^"^ Supra, note 70, 1987 Pocket Part, at 40.

'08 Ihid.

Proceedings of the Sixty- Fourth Annual Meeting, supra, note 55, Appendix I, "Contrib-
utory Fault and Contribution Report of the Alberta Commissioners" 1 18, at 120.

253

draw such a distinction for purposes of remoteness have proved to be very
difficuh. Moreover, many of the recent tort cases in which apportionment
has been ordered under existing legislation have, in fact, involved economic
loss, and there seems to us to be no strong reason to exclude apportionment
in, for example, contract cases involving such loss.

For the foregoing reasons, therefore, we believe that it would be wiser to
leave it to the courts to deal with apportionment in all cases, including those
involving economic loss. As we have suggested earlier, "^ it would appear
that the courts may exclude or limit apportionment in a proper case by
attributing the loss in question entirely, or almost entirely, to the defendant's
conduct. Accordingly, we recommend that apportionment should apply to
all types of loss, including economic loss.'^^

3. SET OFF AND COUNTERCLAIM

Problems arise where, as is not uncommon, an accident causes damage
to both responsible parties, and each claims compensation from the other.
Suppose that P and D are equally responsible for an accident in which P's
damage is $10,000 and D's damage is $20,000. If neither party is insured,
there is no objection to giving judgment to D for $5,000, that is, the
difference between $10,000 recoverable by D from P and $5,000 by P from
D. If either party were insolvent, it would be most unjust to compel the other
to pay full compensation with the prospect of recovering only a small
fraction of her own judgment.

If, however, as is now required in Ontario up to certain limits for
automobile drivers, P and D are insured against liability for the loss,"^ the
effect of setting off the judgments would be to benefit the insurers. The
parties have suffered compensable losses of $15,000, but only $5,000 would
be paid out. One of the purposes of compulsory automobile insurance is to
provide a source of compensation for loss caused by accidents and this
purpose would be defeated if set off were allowed.

The Ontario Rules of Civil Procedure"^ provide as follows:

27.09(3) Where both the plaintiff in the main action and the plaintiff by
counterclaim succeed, either in whole or in part, and there is a resulting balance
in favour of one of them, the court may in a proper case give judgment for the
balance and dismiss the smaller claim and may make such order for costs of the
claim and counterclaim as is just.

''^ See supra, this ch., sec. 2(b)(iii)a.

"' Draft Act, s. 2(5).

''^ Compulsory Automobile Insurance Act, R.S.O. 1980, c. 83.

''^ Rules of Civil Procedure, O. Reg. 560/84.

254

Thus, the court has power to order a set off "in a proper case". Under the
former Rules of Practice,""^ it appears that the practice was not to order a set
off in cases where this would benefit insurers. In an automobile accident
case in which a set off was opposed by the defendant but favoured by her
insurer, the Ontario Court of Appeal said simply that a set off was "not in
accordance with the practice".''^

The same practice apparently obtains in Alberta. The Alberta Institute
of Law Research and Reform said on this point: ''^

The practice is not to provide for set-off in motor vehicle cases. We have
concluded that it is best to leave the question to be decided by the court in each
individual case, with the exception that in actions arising out of the operation of
motor vehicles, the statute should provide that there shall be no set-off unless
the court otherwise orders.

No such provision, however, appears in the Canadian Uniform Act. The
express exclusion of motor vehicle cases seems too narrow, for the problem
of a set off benefiting insurers could arise in cases other than automobile
accidents. This point could be met by a provision along the lines of the
original section 3 of the American Uniform Comparative Fault Act,"^
which provided:

3. A claim and counterclaim shall be set off, and only the difference between
them is recoverable in the judgment. However, if either or both of the claims are
covered by liability insurance and an insurance carrier's liability under its
policy is reduced by reason of the set-off, the insured is entitled to recover from
the carrier the amount of the reduction. Amounts so recovered shall be credited
against pertinent liability policy limits. For purposes of uninsured-motorist and
similar coverages, the amounts so recovered shall be treated as payment of
those amounts to the insured by the party liable.

Similarly, the Irish Civil Liability Act, 1961 "^ has a special provision on
insurance, which reads, in part, as follows:

36.— (4) ...[Wlhere a claim is made against a person who is insured in

'•'* R.R.0. 1980, Reg. 540, rr. 1 18 and 1 19. With respect to set offs, see the {oxmtx Judicature
Act, R.S.O. 1980, c. 223, ss. 134 and 136.

"^ Wells V. RusselL [1952] O.W.N. 521 (C.A.), at 522. See, also, Lewenza v. Ruszczak
(1960), 22 D.L.R. (2d) 167 (Ont. C.A.), where a set off was refused in the case of an
insurer suing by subrogation.

"^ Alberta Report, supra, note 8, at 27.

Supra, note 70. The present § 3 reads as follows:

3. A claim and counterclaim shall not be set off against each other, except by
agreement of both parties. On motion, however, the court, if it finds that the
obligation of either party is likely to be uncollectible, may order that both parties
make payment into court for distribution. The court shall distribute the funds
received and declare obligations discharged as if the payment into court by either
party had been a payment to the other party and any distribution of those funds
back to the party making payment had been a payment to him by the other party.

117

118

Civil Liability Act, 1961, No. 41, s. 36(4).

255

respect of a liability alleged in that claim and the claim is paid by the insurer
with a deduction in respect of a sum owed to the insured by the person making
such claim, the insured or any person representing or deriving title under him
shall be entitled to recover from the insurers the amount of the said deduction.

As is shown by a comparison of the above statutes, different approaches
are possible to the drafting of provisions respecting set offs and counter-
claims. Any such provision is certain to give rise to complexities of its own.
There does not seem to have been any particular problem in this area.
Moreover, the Canadian Uniform Act includes no such provision, and rule
27.09(3) of the Rules of Civil Procedure appears to give adequate discretion
to the court. Accordingly, it is recommended that no specific provision be
included on this matter.

4. COSTS

There are, at present, several relevant legislative provisions in Ontario
dealing with costs. The Negligence Act ^^^ includes a provision on the award
of costs in the context of the plaintiff's own negligence:

8. Where the damages are occasioned by the fault or negligence of more than
one party, the court has power to direct that the plaintiff shall bear some
portion of the costs if the circumstances render this just.

The Courts of Justice Act, 1984^^^ provides generally for an award of costs,
as follows:

141.— (1) Subject to the provisions of an Act or rules of court, the costs of and
incidental to a proceeding or a step in a proceeding are in the discretion of the
court, and the court may determine by whom and to what extent the costs shall
be paid.

Finally, rule 57.01(l)(b) of the Rules of Civil Procedure'^i provides that, in
exercising its discretion under section 141, the court may consider, among
other things, "the apportionment of liability".

Although there are some cases to the contrary, '^2 the Ontario practice
generally appears to be to award costs in the ordinary way to a successful
plaintiff who recovers a judgment, notwithstanding the fact that, because of
the plaintiff's contributory negligence, the amount awarded is less than the
amount claimed. '^3 This is said by the Alberta Institute of Law Research

'^^ Supra, note 6, s. 8.
'20 5'M/7ra,note68,s. 141.
'2' Supra, note 113.

'22 See, for example, Heggtveit v. Ottawa Brickcote Ltd., [1952] O.W.N. 541 (C.A.). See,
also, McConnell v. Alexander, [1954] O.W.N. 61 (H.C.J. ). The decision concerning costs
in the latter case was amplified in McConnell v. Alexander, [1954] O.WN. 266 (H.C.J. ).

'23 In Tuuri v. Canadian Pacific Railway, [1938] O.W.N. 425 (C.A.), counsel for the
defendant sought to have the Court exercise its jurisdiction to apportion costs under

256

and Reform also to be the practice in Alberta. ^^"^ The Institute recom-
mended that costs should continue to be dealt with under the general
discretionary rule,'^^ and no provision on costs appears in the Canadian
Uniform Act.

The Commission wishes to express its concern about those cases in
which a finding of contributory negligence becomes, in itself, a ground for
apportioning costs. We are of the view that, while there may well be
circumstances where such apportionment is justified, this power to appor-
tion costs should not be exercised automatically, without considering all the
circumstances of the case. On balance, however, the Commission has
concluded that the Courts of Justice Act, 1984 and the Rules of Civil
Procedure do seem to give the court adequate power to deal appropriately
with costs. Accordingly, we recommend that no express provision
corresponding to section 8 of the existing Negligence Act should be incorpo-
rated into any new legislation.

In the case of a successful counterclaim involving apportionment,
more difficult problems arise, but these are not fundamentally different in
nature, it would seem, from those arising in any other case of a successful
counterclaim. Rule 27.09(3), reproduced in the preceding section of this
chapter, gives express power to the court to "make such order for costs of the
claim and counterclaim as is just". The Irish Civil Liability Act, 1961 ^^^
includes an express provision on this point:

42. As a general principle, but not so as to limit the judge in the exercise of
his discretion, where damages are awarded on claim and counterclaim subject
in each case to a reduction for contributory negligence. . .costs shall be awarded
in the same proportions as damages.

This provision still leaves an overriding discretion in the court. In the
absence of evidence that the powers of the court under the existing rules are

what is now s. 8 of the Negligence Act. The Court responded as follows (at 428): "There
are no special circumstances here present, and the exercise of the power in this case
would involve the principle that it should be applied in every case where there is
negligence on both sides".

See, also, the following cases where the plaintiff was awarded full costs despite
being held contributorily negligent to some significant degree: Stark v. Batchelor, [1928]
4 D.L.R. 815 (Ont. App. Div.); Wright v. McConnell, [1953] O.W.N. 372 (C.A.); Hogan v.
Italian Mosaic & Tile Co. Ltd., [1927] 1 D.L.R. 1149 (Ont. H.C.J.); Saunders v. Brown,
[1943] O.W.N. 675 iH.C.J.);md Lusty v. Peer and DeGraw, [1952] O.W.N. 763 (H.C.J.).
In addition, see Orkin, The Law of Costs (2d ed., 1987), at 2-47, who states that "[t]here
is. ..no absolute rule of law or practice which obliges the judge to apportion costs
between the parties" in contributory negligence cases. Therefore, a contributorily
negligent plaintiff "will be awarded his full costs in the absence of special cir-
cumstances".

^■^^ Alberta Report, supra, note 8, at 88.

125 Ibid., at 90.

•26 5'wpra,notell8,s. 42.

257

inadequate, and having regard to the absence of any provision in the
Uniform Act, no express provision is recommended on this matter.

5. CONTRIBUTORY NEGLIGENCE AND MULTIPLE
WRONGDOERS

Suppose that P, Dl, and D2 are each equally responsible for a $6,000
loss suffered by P. If Dl and D2 are both sued and are both solvent it makes
no difference whether P recovers judgment for $4,000 against Dl and Dl
then obtains contribution to the extent of $2,000 from D2, or whether P
recovers $2,000 from each of Dl and D2. Difficulties arise, however, in three
situations: (1) where D2 is absent or insolvent; (2) where Dl and D2 have
claims against P; and (3) where P is contributorily negligent vis-a-vis Dl, but
not vis-d-vis D2.

(a) Absent or Insolvent Wrongdoer

The first fact situation mentioned above, involving an absent or insol-
vent wrongdoer, was the subject of discussion in chapter 3 of this Report. In
that chapter, we considered the principle of in solidum liability, whereby
wrongdoers whose acts concur to cause a single, indivisible harm are each
liable to the injured person for the entire amount of the damage suffered. In
the course of discussing in solidum liability, the Commission considered the
desirability, in the case of a contributorily negligent plaintiff and an insol-
vent or absent wrongdoer, of modifying the rule, along the lines of the
American Uniform Comparative Fault Act,^^^ to require the plaintiff to
share the burden of insolvency or absence with other wrongdoers. For
reasons set out in chapter 3,^^^ we rejected this alternative, and recom-
mended no change in the principle of m solidum liability, even in the case of
a contributory negligent plaintiff. '^^ Thus, in the abovementioned example,
if P were to sue Dl alone, she would recover two-thirds of her loss ($4,000),
on the basis that she is one-third to blame, and Dl would bear the risk of
D2's insolvency or absence. We note that this is the position adopted by the
Canadian Uniform Act. ^^^

^27 5"wpra, note 70, § 2(d).

'^^ Supra, ch. 3, sec. 4.

'^^ Ibid. While, under the Commission's proposals, a contributorily negligent plaintiff
would not bear the risk of an insolvent or absent wrongdoer, where there are more than
two concurrent wrongdoers the share of the absent or insolvent wrongdoer would be
divided among the remaining wrongdoers in proportion to their respective degrees of
fault.

'^^ See supra, note 7, s. 5(1), reproduced supra, this ch., sec. 1(b), and s. 6, which provides
that "[t]he liability of concurrent wrongdoers for damages is joint and several", that is, in
solidum. See, also, ibid., s. 9, which deals with the apportionment of contribution
among wrongdoers where the "contribution of a concurrent wrongdoer cannot be
collected".

258

(b) P Liable to Di and D2 on Counterclaims, and Di and D2
Liable to Each Other

Professor Williams has argued that, where three parties all suffer
damage in circumstances where each is partly responsible, there is a case for
apportioned judgments because the calculation and entering of six separate
judgments would be "an unduly complicated way of disposing of the
matter", •^^ and would require a party to advance money that she would
have to recover subsequently from others. Arguments about complexity,
however, cut both ways on this issue. Professor Williams' draft legislation for
apportioned judgments, adopted in the Irish Civil Liability Act, 1961 P'^
contains twelve subsections. It would seem that the rule of in solidum
habiUty has not given rise to great difficulty in practice. ^^^ Perhaps most
importantly, a system of apportioned judgments would be inconsistent with
the position we have taken in chapter 3 with respect to in solidum hability.
Consequently, it is recommended that the principle of in solidum liabiHty
should be retained and no provision should be made for apportioned
damages even where three or more parties suffer damage for which each is
partly responsible.*^"^

Cases can be envisaged in which the plaintiff conducts herself dif-
ferently towards different defendants. Suppose that the plaintiff's architect
and a municipal building inspector are both responsible for a loss caused by
the building of the plaintiff's house on an inadequate foundation, and that
the plaintiff is partly responsible for the loss in that she negligently furnished
the architect (but not the building inspector) with soil test results that related
to a different site. In Acrecrest Ltd. v. W.S. Hattrell & Partner s,^^^ Donald-
son L.J. said of such a case:*^^

I can conceive of two situations in which a Court considering a claim for
contribution between the first and second defendants might be concerned with
the plaintiff's contributory negligence. The first is if the plaintiff has conducted
himself differently towards the first and second defendants so that, for exam-
ple, his loss is £1,000 but the first defendant's liability is only £250 (75%

^^' 5'w/7ra,note22, at398.
'^^ Supra, note 118, s. 38.

See supra, ch. 3, especially sec. 4.

DraftAct, s. 4(1).

133
134

135

[1983] Q.B. 260, [1983] 1 All E.R. 17 (C.A.) (subsequent reference is to [1983] Q.B.),
overruled on other grounds by Governors of the Peabody Donation Fund v. Sir Lindsay
Parkinson & Co. Ltd., [1985] 1 A.C. 210, [1984], 3 W.W.R. 953 (H.L.).

'^^ Supra, note, 135, at 280-81.

259

contributory negligence by the plaintifO whereas the second defendant is liable
for the full amount. If the second defendant claimed contribution, I can see it
being argued with force that it would not be just and equitable that the first
defendant's contribution should exceed £250 and that it should probably be
considerably less.

The problem has been discussed along with analogous problems in
chapter 6.^^'^ Our conclusion was that, supposing D2, but not Dl, to have a
partial defence of contributory negligence, P should recover in full from Dl,
that D2's liability to contribute should not exceed the extent of her liability
to P directly, but that up to this limit D2 should be required to contribute in
the ordinary way.

6. DOCTRINE OF LAST CLEAR CHANCE

The doctrine of last opportunity or last clear chance evolved to mitigate
the rigours of the common law rule denying any recovery in cases of
contributory negligence. After the introduction of apportionment, there-
fore, the raison d'etre of the rule disappeared. Nevertheless, some Canadian
cases held that the rule survived the apportionment Acts,^^^ on the reason-
ing that the Acts were passed for the relief of plaintiffs, and that, where at
common law the plaintiff would have been able to recover in full because
the defendant had the last opportunity of avoiding the harm, the Act should
be construed to enable plaintiffs to continue to recover in full. The better
view appears to be, however, that apportionment seeks to do justice to both
plaintiff and defendant, and where each contributes to the loss the damages
should be apportioned, irrespective of the effect of the doctrine of last clear
chance.

The complexities and artificiality of the doctrine, although necessary
perhaps in alleviating a harsh common law rule, are additional reasons for
discarding the doctrine in modern law. This is the recommendation of the
Alberta Institute. ^^^ The Canadian Uniform Act includes the following
provision:

3. This Act applies where damage is caused or contributed to by the Act or
omission of a person notwithstanding that another person had the opportunity
of avoiding the consequences of that act or omission and failed to do so.

It is recommended that the proposed apportionment legislation should
adopt a similar provision.'"*^

^^^ Supra, ch. 6, sec. 3(d)(ii)a.

'3^ See Seniunas v. Lous Transport (1971), 25 D.L.R. (3d) 277 (Ont. H.C.J.).

^^^ Alberta Report, supra, note 8, at 10.

^"^ Draft Act, s. 21.

260

7. IMPUTED CONTRIBUTORY NEGLIGENCE

In a number of cases, the negligence of another person is attributed to
the plaintiff. The most obvious case is that of loss caused partly by the
negligence of the defendant and partly by that of the plaintiff's employee.
Professor Fleming has questioned the justification of apportionment in
such a case,'"^' but Professor Williams supports it.^'*^ It would seem odd to
hold the defendant fully liable in a case where the plaintiff's employee
damaged the plaintiff's truck, the employee being 90 percent to blame for
the accident and the defendant only 10 percent. In many such cases, a claim
for contribution against the employee would be worthless. In other cases,
the plaintiff would feel obliged to indemnify the employee, leading to the
same net result as the initial imputation to the employer of the employee's
negligence. Where the plaintiff did not indemnify the employee, the conse-
quence might be considered oppressive, and to amount to a devious means
of doing what the plaintiff might hesitate or be unable to do directly, that is,
sue its own employee for loss caused by negligence in the course of her
duties.

Other instances where contributory negligence has been imputed are
the actions for loss of an employee's services, and actions under Part V of the
Family Law Act, 1986 ^^^ for loss caused by death of or injury to family
members. ^"^"^ In the latter case, the Family Law Act, 1986 expressly provides
that the contributory negligence of the person injured or killed reduces the
claim. ^4^ In the Commission's recent Report on Compensation for Personal
Injuries and Death, we recommended that Part V of the Act should be
repealed. ^^^

Judicial opinion has differed with respect to the action for the loss of an
employee's services, but the "mainstream of Canadian authority" '^^ in the
analogous case of an action for the loss of a wife's services has been said to be
that the action is derivative and, therefore, affected by the contributory
negligence of the person injured. The action for loss of an employee's
services is generally regarded as anachronistic, and its abolition has been
recommended by this Commission. *^^ Pending abolition, it is our view the
action can best be limited by regarding it as derivative and by assimilating it,

''^^ Supra, note 3, at 260 et seq.

^^^ Supra, note 22, at 431 et seq.

^"^^ Family Law Act, 1986, S.0. 1986, c. 4.

^^'^ //7/J.,s. 61(l)and(2).

^"^5 Ibid., s. 61(3).

Ontario Law Reform Commission, Report on Compensation for Personal Injuries and
Death (1987), ch. 2, esp. sec. 4(d), and ch. 4, sec. 5.

'"^^ Enridge v. Copp (1966), 57 D.L.R. (2d) 239 (B.C.S.C.).

Report on Compensation for Personal Injuries and Death, supra, note 146, ch. 2, sec. 9.

261

as far as possible, with an action by the injured person herself. This implies
the reduction of the employer's recovery in accordance with the employee's
contributory negligence.

The Alberta Institute of Law Research and Reform reached the same
conclusion'"*^ and the Canadian Uniform Act contains the following provi-
sion:

5.— (2) Where a person other than a person referred to in subsection (1)
makes a claim arising from the damage suffered by a person referred to in
subsection (1) the liability for damages of a person whose fault contributed to
the damage is reduced by an amount of the damages proportionate to the
degree to which the fault of the person who suffered the damage from which the
claim arose contributed to the damage.

The need for such an express provision in Ontario is perhaps debatable, in
that the actions for loss of a wife's and child's services and for loss of
consortium have been aboUshed,'^^ and, as we have seen, the Family Law
Act, 1986 expressly deals with the question of contributory negligence in
actions within its scope. However, the action for loss of an employee's
services still exists, in respect of which, it would seem, the provision in the
Canadian Uniform Act confirms existing law. It is possible also that an
action could be brought, at common law rather than under the Family Law
Act, 1986, for economic loss caused by injury to a third party. '^^ Accord-
ingly, we recommend that a provision dealing with the same issue covered
by section 5(2) of the Uniform Act should be included in our proposed
apportionment legislation. '^^

8. FACT AND LAW

The Ontario Negligence Act currently provides:

7. In any action tried with a jury the degree of fault or negligence of the
respective parties is a question of fact for the jury.

The Canadian Uniform Contributory Fault Act includes a wider provision:
4. In every action,

(a) the fault or the wrongful act, if any;

^^'^ Alberta Report, supra, note 8, at 97.

'^^ Family Law Reform Act, R.S.O. 1980, c. 152, s. 69(3) and (4), preserved by the Family
Law Act, 1986, supra, note 143, s. 71(1).

'5' See Graham v. Toronto Transportation Comm., [1945] O.W.N. 904 (H.C.J. ), aff'd [1946]
O.W.N. 274 (C.A.), and Young v. Burgoyne (1981), 122 D.L.R. (3d) 330 (N.S.S.C, T.D.).

•^2 Draft Act, s. 2(3).

262

(b) the degree to which the fault or wrongful act of a person contributed
to damage; and

are questions for the trier of fact.

This provision is based on the old model Uniform Act, in force in Alberta. '^^
It would seem that paragraphs (a) and (c) of the Uniform Act go beyond
matters relating directly to apportionment. To say that in every action the
fault or the wrongful act and the amount of damages are questions for the
trier of fact may have the effect of altering the powers of juries generally, and
will raise difficulties of interpretation in cases that have nothing to do with
apportionment. Since the Commission has recommended the abolition of
the civil juryj^^"^ there seems to be little case to be made for a general
provision affecting jury powers. Accordingly, it is recommended that only a
provision similar to section 4(b) should be included in the proposed appor-
tionment legislation.'^^ Furthermore, we recommend that, if the degrees to
which the fault of the plaintiff and defendant contributes to the damage
cannot be determined in relation to each other, they should be deemed to
have contributed equally in relation to each other. '^^

9. EXISTING RIGHTS OF APPORTIONMENT

In chapter 4 of this Report, the Commission considered the effect that
its proposed new statutory right of contribution should have upon any other
right to contribution or indemnity that the parties may already have at
common law, by statute, by virtue of a contract, or as a result of any other
legal obligation. '^^ In this section, we deal with the analogous issue in the
context of comparative fault.

With respect to existing statutory rights of apportionment, we have
come to the same general conclusion to which we came when we considered
existing statutory rights of contribution, namely, that the relevant provisions
in the proposed Contribution and Comparative Fault Act ought to
govern. '^^ We are of the view that these provisions establish an apportion-
ment regime that, in principle, should supersede other statutory provisions.

^^^ Contributory Negligence Act, supra, note 8, s. 5.

^^^ Ontario Law Reform Commission, Report on the Administration of Ontario Courts,
Part I (1973), at 350.

•55 Draft Act, s. 22.

•56 Ibid., s. 2(6).

•5^ Supra, ch. 4, sec. 3(c).

•58 Draft Act, s. 2(7).

263

However, we do not wish to be doctrinaire concerning the appHcation
of our Act. Two exceptions to the general rule ought to be made. First, we
recommend that the apportionment provisions of the Contribution and
Comparative Fault Act should have primacy over any other Act that
provides for apportionment, unless the other Act specifically states that it is
to apply notwithstanding the proposed Act.'^^

As in the case of the contribution proposal, we believe that the preced-
ing recommendation, if enacted, would necessitate a review of any existing
apportionment legislation. Therefore, we recommend that those govern-
mental officials responsible for the administration of other relevant Acts
should review those Acts in order to determine whether their apportion-
ment provisions ought to be made to apply notwithstanding the Contribu-
tion and Comparative Fault Act.

The second exception concerns the type of apportionment power that
now arises under section 34(1) of the Trustee Act^^^ and that, in its 1984
Report on the Law of Trusts, the Commission proposed ought to be
continued in its revised Trustee Act .^^^ Accordingly, we recommend that
nothing in the proposed Contribution and Comparative Fault Act should
affect this provision in any way. '^^

With respect to existing non-statutory rights of apportionment, the
Commission has come to a different conclusion from the one adopted in the
contribution context. In the latter context, we proposed that, subject to four
exceptions, our Contribution and Comparative Fault Act ought to govern all
non-statutory rights to contribution. Accordingly, rights to contribution
arising at common law, for example, would be superseded under our
recommendations.

As we have seen earlier in this chapter, the Commission has recom-
mended that the proposed apportionment legislation should not be
expressly extended to all breaches of contract or to breaches of a fiduciary
duty, including breaches of trust. ^^^ This proposed limitation on the purview
of our legislation was not intended to preclude the possibility of apportion-
ment in these cases (and, indeed, in other cases not governed by statute).
Rather, we recognized that, since the extension of apportionment in these
areas is, or would be, very controversial, it would be preferable for the law to
develop on a case-by-case basis. In this manner, the evolution of common
law or equitable apportionment principles, responding specifically to the

159 Ibid.

1^^ Supra, note 97. The provision is discussed ibid.

'^1 See ibid.

•^2 Draft Act, s. 23(2).

^^^ See supra, this ch., sees. 2(c)(ii)c and 2(e), respectively.

264

complexity of the issues in the context of breach of contract and breach of
fiduciary duty— as well as in other contexts— would remain possible.
Accordingly, we recommend here that nothing in the proposed Contribution
and Comparative Fault Act should derogate from the power a court has to
apportion damages apart from statute. '^'^

Recommendations

The Commission makes the following recommendations:

1. Subject to the following recommendations, where a person is injured by
the wrongful act of one or more persons and the fault of the injured
person is found to have contributed to the damage, the court should
determine the degrees of fault of the person or persons and of the
injured person that contributed to the damage, and should apportion
the damages in proportion to the degrees of fault that are so found.

2. Subject to Recommendation 3, all torts of negligence and strict liability,
as well as intentional torts, should be included within the scope of the
proposed legislation governing apportionment in cases of contributory
fault.

3. The question whether the new apportionment legislation should apply
in4;he case of actions for conversion, detinue, and injury to a reversion-
ary interest, or where the true owner has recovered the goods without
the assistance of a court, should be deferred for consideration in the
Commission's Project on Remedies for Wrongful Interference with
Goods.

4. Apportionment should not be excluded where the plaintiff has relied
on the defendant's contractual assurance of performance.

5. Apportionment should not be restricted to an unintentional breach of
contract.

6. Apportionment should apply to a breach of a duty of care arising from
a contract that creates a liability in damages, and, in addition, to any
breach of contract that creates a liability for damages for personal
injury or property damage.

7. Apportionment for loss caused by breach of contract should be subject
to any agreement, express or implied.

8. Apportionment should extend to a breach of statutory duty that creates
a liability in damages.

164

Draft Act, s. 2(7).

265

9. The proposed apportionment legislation should not be extended to
breach of fiduciary duty, including breach of trust.

10. Apportionment should apply to all types of loss, including economic
loss.

11. The proposed apportionment legislation should not deal expressly with
set off and counterclaim in cases where either or both of the parties are
insured.

12. The proposed apportionment legislation should not include an express
provision dealing with costs of a claim or counterclaim.

13. For the reasons discussed in chapter 3, liability to a contributorily
negligent plaintiff should continue to be in solidum even where one or
more of the concurrent wrongdoers is or are absent or insolvent.

14. No provision should be made for apportioned damages, and liability
should continue to be in solidum, even where three or more parties
suffer damage for which each party is partly responsible.

15. The case where the plaintiff is contributorily negligent against one
wrongdoer but not against another should be dealt with as proposed in
chapter 6. (See chapter 6, Recommendation 4.)

16. The proposed apportionment legislation should contain a provision,
similar to section 3 of the Canadian Uniform Contributory Fault Act,
abolishing the doctrine of last clear chance.

17. The proposed apportionment legislation should include a provision,
similar to section 5(2) of the Uniform Act, imputing the contributory
fault of an injured person to a third person claiming damages arising
from the injury.

18. (1) The proposed apportionment legislation should contain a provi-

sion, similar to section 4(b) of the Uniform Act, stating that the
degree to which the fault or wrongful act of a person contributed to
damage is a question for the trier of fact.

(2) If the degrees to which the fault of the plaintiff and defendant
contributed to the damage cannot be determined in relation to
each other, they should be deemed to have contributed equally in
relation to each other.

19. (1) (a) The apportionment provisions of the Contribution and Com-

parative Fault Act should have primacy over any other Act
that provides for apportionment, unless the other Act specifi-
cally states that it is to apply notwithstanding the proposed
Act.

266

(b) Those governmental officials responsible for the administra-
tion of other relevant Acts should review those Acts in order to
determine whether their apportionment provisions ought to
be made to apply notwithstanding the Contribution and Com-
parative Fault Act.

(2) The Contribution and Comparative Fault Act should be made
subject to section 34(1) of the Trustee Act (which the Commission
proposed ought to be continued in the revised Trustee Act recom-
mended in its Report on the Law of Trusts (1984)).

(3) Nothing in the proposed Contributory and Comparative Fault Act
should derogate from the power a court has to apportion damages
apart from statute.

SUMMARY OF RECOMMENDATIONS

The Commission makes the following recommendations:

CHAPTER 1: INTRODUCTION

1: The Negligence Act should be repealed and a new Contribution and
Comparative Fault Act should be enacted to deal comprehensively with
the rights and obligations, as between themselves, of concurrent wrong-
doers, the rights of the injured person vis-a-vis such wrongdoers, and
the effect of the injured person's contributory fault on the issue of
Uability.

CHAPTER 2: JOINT AND SEVERAL LIABILITY

2. The provisions currently contained in section 149 of the Courts of
Justice Act, 1984, as modified in accordance with the following recom-
mendations, should be placed in the proposed new Contribution and
Comparative Fault Act.

3. A person who has obtained judgment against a defendant should not
thereby be precluded from instituting or continuing an action against
another in respect of the same debt or damage for which the defendants
are jointly liable.

4. (1) Subject to paragraphs (2) and (3), a person who releases a person

should not thereby be barred from proceeding against any other
person who is concurrently liable in respect of the same debt or
damage.

[267]

268

liable for the debt or damage in respect of which the offer of
settlement was made, unless the settlement is expressly made in
respect of the claim that the plaintiff may have against other
persons.

5. The Parliament of Canada should be requested to enact legislation that
would abrogate the judgment bar and release bar rules respecting
proceedings in the Federal Court.

6. The single judgment rule should be abolished, so that the present law
with respect to separate awards of damages against concurrent defen-
dants who are severally Hable would be extended to those whose
liability is joint. A plaintiff should always be able to prove the extent of
the loss for which a particular defendant is Uable, without regard to the
sum awarded to the plaintiff against another, concurrently liable
defendant.

7. A person who proceeds in separate actions against two or more persons
who are concurrently liable in respect of the same damage or debt
should be entitled to costs only in the first action, unless that person
satisfies the court that there were reasonable grounds for bringing more
than one action.

CHAPTER 3: IN SOLIDUM LIABILITY

8. There should be no change in the law respecting the in solidum liability
of concurrent wrongdoers to a plaintiff, even where the plaintiff is
contributorily negligent.

9. Where there are more than two concurrent wrongdoers, and one
wrongdoer is insolvent or otherwise unavailable to satisfy her share of
liability, that share should be divided between the remaining wrong-
doers in proportion to their respective degrees of fault, without dis-
charging the liability to contribute of the defaulting concurrent
wrongdoer.

CHAPTER 4: THE NATURE AND SCOPE OF THE RIGHT TO
CONTRIBUTION

10. (1) Subject to the following recommendations, a right to contribution
should be capable of arising among wrongdoers who cause a single
loss to an injured person, irrespective of the nature of the legal
obligation that gives rise to their liability in damages, and of the
form of the relief that the wrongdoer has been required to provide
to the injured party.

(2) The criminal nature of the wrongdoing, the fact that it was com-
mitted intentionally or that the damages paid by a defendant

269

include a penal or punitive element, should not automatically bar
a right of contribution. (See, also. Recommendation 37(4).)

(3) For the purpose of this recommendation, liability to restore a
chattel to the injured party should be regarded as equivalent to
liability to pay damages. In addition, other decrees of specific relief
that discharge or reduce the liability of a concurrent wrongdoer
should be capable of founding a claim for contribution.

11. The proposed statutory right should not extend to those liable for a
debt.

12. (1) Subject to the exceptions recommended below, the contribution

(2) (a) The proposed Contribution and Comparative Fault Act ought

(c) The proposed review of existing legislation should include
a consideration of the precise meaning of any provisions
concerning the right to "indemnity", having regard to the
distinction, made in chapter 1 of this Report, between "contri-
bution" and "indemnity" and the not infrequent use of the
latter term in two different ways in the legislation of Ontario.

270

13. The proposed legislation should not affect any express or implied
contractual or other right to indemnity, as defined in chapter 1 of the
Report.

14. No person should be able to claim contribution from a person who is
entitled to be indemnified by the claimant for the damages in respect of
which contribution is sought.

15. A person who has a right to contribution under the proposed Contribu-
tion and Comparative Fault Act should be subrogated to any right that
the injured person has against the concurrent wrongdoer from whom
contribution is claimed.

16. The proposed new statutory provisions for contribution among wrong-
doers should expressly apply to the Crown in right of Ontario and,
insofar as it is constitutionally permissible, to the Crown in right of
Canada.

CHAPTER 5: SETTLEMENTS AND CONTRIBUTION CLAIMS

17. Where a person who has settled the claim of an injured person claims
contribution from another who he alleges is liable for the injured
person's loss, it should be no defence to the contribution claim that the
claimant could never have been successfully sued by the injured person.
However, the court should be empowered to refuse contribution if the
person claiming contribution made the settlement without believing
that he was or might be liable and without regard to any legal proceed-
ings that might be instituted against him by the injured person for the
claim settled.

18. A person who settles a claim made against him by the injured person
should be entitled to institute or continue a claim for contribution from
those concurrently liable if the settlement provides for the discharge or
reduction of the liability of the other concurrent wrongdoers to the
injured person.

19. If an injured person obtains judgment against a wrongdoer, his dam-
ages should be reduced by any consideration already given to him
under a settlement by another concurrent wrongdoer.

20. Where, following a settlement between the injured person and a con-
current wrongdoer, another concurrent wrongdoer has been held liable
to the injured person or has settled the injured person's claim for an
amount that exceeds his proportionate share of the liability, he should
be entitled to claim contribution from the first concurrent wrongdoer
for the excess, even though the first concurrent wrongdoer has ceased to
be liable to the injured person by virtue of the settlement.

271

CHAPTER 6: DEFENCES TO CONTRIBUTION CLAIMS:
LIABILITY TO THE INJURED PERSON

21. Where the injured person sues both the claimant for contribution and
the person against whom the claim is made as co-defendants in a single
action, or where, in the injured person's action against the claimant
alone, the contributor is added as a third party by the claimant, both the
claimant for contribution and the contributor should be bound by the
findings of the court in that action.

22. (1) Where a claim for contribution is made in a legal proceeding

(2) The recommendation in paragraph (1) should apply even where
the judgment against the claimant in favour of the injured person
was on consent.

(3) (a) In the independent contribution action, the person against

(b) However, the claimant for contribution should be estopped
from arguing that the injured person's loss was greater than
the amount at which that loss was assessed by the court that
decided the injured person's action against the claimant.

23. A person who could at no time have been successfully sued by the
injured person should not be liable to pay contribution to another
person in respect of the injured person's loss.

24. A person whose liability to the injured person is less than that of
another wrongdoer because of a contract made with the injured person

272

before the cause of action arose, the contributory fault of the injured
person, a statute, or any other reason, should never be required to pay
by way of contribution a sum that exceeds the amount of her liability to
the injured person.

25. The fact that a wrongdoer's liability to the injured person is limited
should be ignored for the purpose of calculating the amount that she is
liable to pay by way of contribution, except for the purpose of ensuring
that her liability to contribute does not exceed the amount in which her
hability to the injured person was limited.

26. No recommendation made in this Report is intended to affect in any
way the Workers ' Compensation Act .

CHAPTER 7: DEFENCES TO CONTRIBUTION CLAIMS:
SUBSEQUENT IMMUNITIES

27. (1) It should never be a defence to a claim for contribution for the

contributor to establish that his liability to the injured person had
ceased to be enforceable by reason of the failure of the injured
person to comply with a procedural requirement, the expiry of a
statutory limitation period, dismissal of the injured person's action
for delay, or an analogous equitable bar upon a successful suit by
the injured person. The contributor should not be protected from
liability to contribute, even if he had ceased to be capable of being
successfully sued by the injured person when that person com-
menced proceedings against or settled with the person claiming
contribution.

(2) Should the recommendation in paragraph (1) be enacted, those
governmental officials responsible for the administration of stat-
utes requiring notice of a claim to be sent to an alleged wrongdoer
should review the nature and purpose of the statutory notice
requirements in order to determine whether they are of overriding
importance and, therefore, whether they ought to be made to apply
notwithstanding the Commission's Contribution and Comparative
Fault Act.

28. It should be a defence to a claim for contribution for the contributor to
establish that proceedings were instituted by the injured person against
the claimant, or a settlement was made between them, after the expiry
of a limitation period contained in a contract made between the
contributor and the injured person before the latter 's cause of action
arose against the contributor.

29. (1) It should be a defence to a claim for contribution for the contribu-

tor to establish that judgment on the merits has already been given
in his favour in an action by the injured person, except where the
judgment was obtained by collusion or fraud.

273

(2) The recommendation in paragraph (1) should not apply where the
injured person's action was dismissed for delay.

30. It should never be a defence to a claim for contribution for the
contributor to establish that he had ceased to be liable to the injured
person by virtue of a settlement made with, or a release or waiver of
liability given by, the injured person after that person's cause of action
against him arose.

CHAPTER 8: THE ASSESSMENT OF CONTRIBUTION

31. Where contribution is sought on the basis of a full settlement made
between the injured person and the claimant, the contribution payable
by the contributor should be calculated by reference to the value of the
consideration given for the settlement, which the claimant must estab-
lish it was in all the circumstances reasonable for her to give. If the
claimant does not establish that the consideration actually given was
reasonable, the contribution payable by the contributor should be
based on the court's determination of the value of the consideration
that it would have been reasonable for the claimant to have given.

32. Where the claimant for contribution has settled the injured person's
claim by performing services or delivering goods, the court in contribu-
tion proceedings should be required to value these in order to deter-
mine whether the claimant has settled for a reasonable amount.

33. If a wrongdoer has settled the injured person's claim against him in such
a way that the injured person may proceed against those concurrently
liable with the settling wrongdoer, the contributable sum should be
calculated in the way described above, but,

(a) if a claim for contribution is made by or against the settling
wrongdoer by a third party claim incidental to an action
brought by the injured person against a concurrent wrong-
doer, the contributable sum should be the amount of their
common liability as determined by the court in that action;
and

(b) if the non-settling wrongdoer is sued by the injured person,
and subsequently claims contribution from the settling
wrongdoer in an independent action, the contributable sum
should be the amount of the common liability as determined
by the court in that action.

34. If the terms of the settlement provide for the performance of services or
the delivery of goods, these should be required to be valued by the court
in order to determine the amount of contribution recoverable.

35. Where the injured person has obtained judgment against concurrent
wrongdoers in separate proceedings and the damages of the injured

274

person have been assessed differently, in a claim for contribution by one
wrongdoer against another wrongdoer the court should be required to
determine the sum to which the parties to the contribution claim shall
contribute, without reference to the findings on damages in the earlier
litigation.

36. In determining contribution among concurrent wrongdoers, the court
should disregard the fact that some other person, who is not a party to
the contribution proceedings, might also be concurrently liable to the
injured person.

37. (1) The amount of contribution recoverable from a concurrent

wrongdoer should be such as may be found by the court to be just
and equitable, having regard to the degree of responsibility of each
concurrent wrongdoer for the damage caused.

(2) If it is not practicable for a court to make such an assessment, each
should be determined to be equally responsible and liable to pay an
equal amount by way of contribution.

(3) The determination of the degree of responsibility attributable to
each party to a claim for contribution should be regarded as a
question of fact.

(4) While the criminal nature of the wrongdoing, the fact that it was
committed intentionally or that the damages paid by a defendant
include a penal or punitive element, would not automatically bar a
right of contribution (see Recommendation 10(2)), such factors
should be relevant to the court's exercise of its discretion over the
quantum of contribution awarded.

( 5 ) In determining the degree of responsibility of a concurrent wrong-
doer, the court should be entitled to find any degree of responsibil-
ity, including responsibility for none or all of the damage.

CHAPTER 9: SOME PROCEDURAL ASPECTS OF
CONTRIBUTION CLAIMS

38. A person who is claiming contribution from another who is a co-
defendant in the action brought by the injured person should do so by a
crossclaim in that action, in accordance with the relevant provisions of
the Rules of Civil Procedure, unless the court before which the action is
brought has no jurisdiction to determine the claim for contribution..

39. A person who is sued by the injured person should normally claim
contribution from a concurrent wrongdoer, who is not a party defend-
ant, by a third party claim in accordance with the relevant provisions of
the Rules of Civil Procedure. However, the claimant should be entitled

275

to institute an independent action for contribution where the court
before which the injured person's action was brought had no jurisdic-
tion to determine the claim for contribution, or it was otherwise
impracticable for the claimant to assert his right to contribution by a
third party claim.

40. A person whose right to contribution is based upon a settlement of the
injured person's claim should be entitled to institute or continue
proceedings for contribution against a person who is or may be con-
currently liable for the loss to which the settlement relates. For this
purpose, "settlement" should include a settlement approved by a court
and a judgment obtained by consent.

41. The hmitation period governing the enforcement of the right of contri-
bution among concurrent wrongdoers should be two years. Where the
claim is based upon a judgment against the claimant in favour of the
injured party, the period should run from the date of the judgment.
Where the claim is based upon a settlement, the period should com-
mence from the date when the settlement was made.

42. An order for the payment of contribution should become executable
when the claimant has discharged a greater proportion of the common
liability than represents his degree of fault, or when the contributor can
no longer be sued successfully by the injured person. Where the
claimant has not discharged his liability to the injured person, the
money recovered from the contributor should be paid into court in
satisfaction of the claimant's liability to the injured person.

CHAPTER 10: CONTRIBUTORY NEGLIGENCE

43. Subject to the following recommendations, where a person is injured by
the wrongful act of one or more persons and the fault of the injured
person is found to have contributed to the damage, the court should
determine the degrees of fault of the person or persons and of the
injured person that contributed to the damage, and should apportion
the damages in proportion to the degrees of fault that are so found.

44. Subject to Recommendation 45, all torts of negligence and strict
liability, as well as intentional torts, should be included within the scope
of the proposed legislation governing apportionment in cases of con-
tributory fault.

45. The question whether the new apportionment legislation should apply
in the case of actions for conversion, detinue, and injury to a reversion-
ary interest, or where the true owner has recovered the goods without
the assistance of a court, should be deferred for consideration in the
Commission's Project on Remedies for Wrongful Interference with
Goods.

276

46. Apportionment should not be excluded where the plaintiff has relied
on the defendant's contractual assurance of performance.

47. Apportionment should not be restricted to an unintentional breach of
contract.

48. Apportionment should apply to a breach of a duty of care arising from
a contract that creates a liability in damages, and, in addition, to any
breach of contract that creates a liability for damages for personal
injury or property damage.

49. Apportionment for loss caused by breach of contract should be subject
to any agreement, express or implied.

50. Apportionment should extend to a breach of statutory duty that creates
a liability in damages.

51. The proposed apportionment legislation should not be extended to
breach of fiduciary duty, including breach of trust.

52. Apportionment should apply to all types of loss, including economic
loss.

53. The proposed apportionment legislation should not deal expressly with
set off and counterclaim in cases where either or both of the parties are
insured.

54. The proposed apportionment legislation should not include an express
provision dealing with costs of a claim or counterclaim.

55. For the reasons discussed in chapter 3, liability to a contributorily
negligent plaintiff should continue to be in solidum even where one or
more of the concurrent wrongdoers is or are absent or insolvent.

56. No provision should be made for apportioned damages, and liability
should continue to be in solidum, even where three or more parties
suffer damage for which each party is partly responsible.

57. The case where the plaintiff is contributorily negligent against one
wrongdoer but not against another should be dealt with as proposed in
chapter 6. (See Recommendation 24.)

58. The proposed apportionment legislation should contain a provision,
similar to section 3 of the Canadian Uniform Contributory Fault Act,
abolishing the doctrine of last clear chance.

59. The proposed apportionment legislation should include a provision,
similar to section 5(2) of the Uniform Act, imputing the contributory
fault of an injured person to a third person claiming damages arising
from the injury.

277

60. (1) The proposed apportionment legislation should contain a provi-

sion, similar to section 4(b) of the Uniform Act, stating that the
degree to which the fault or wrongful act of a person contributed to
damage is a question for the trier of fact.

61. (1) (a) The apportionment provisions of the Contribution and Com-

parative Fault Act should have primacy over any other Act
that provides for apportionment, unless the other Act specifi-
cally states that it is to apply notwithstanding the proposed

Act.

(b) Those governmental officials responsible for the administra-
tion of other relevant Acts should review those Acts in order
to determine whether their apportionment provisions ought
to be made to apply notwithstanding the Contribution and
Comparative Fault Act.

(3) Nothing in the proposed Contributory and Comparative Fault Act
should derogate from the power a court has to apportion damages
apart from statute.

CONCLUSION

In this Project, the Commission has examined the contribution rights
and obHgations of persons whose wrongful conduct has caused a single toss
to another. The Report has also considered the rights of the injured person
vis-d-vis such wrongdoers and the effect of the injured person's contributory
negligence or fault on the extent of his recovery.

Despite the restitutionary doctrine of unjust enrichment upon which
the right to contribution is based, deference to this principle is, in the case
law, often haphazard. Much of the jurisprudence remains confusing, contra-
dictory, or unsettled. Moreover, the Negligence Act , dealing with contribu-
tion only among concurrent "tort feasors", is unjustifiably restrictive,
particularly measured against this underlying equitable doctrine. So, too,
are the provisions in that Act concerning contributory "fault" or "negli-
gence".

In attempting to assess and reform these areas of the law, the Commis-
sion has turned for guidance to restitutionary, as well as other relevant,
principles. The result, we believe, is a comprehensive set of recommenda-
tions and a proposed Contribution and Comparative Fault Act that will
bring a coherence and rationality to the law that the courts have often found
difficult to achieve by means of case-by-case adjudication.

In the Introduction to this Report, we acknowledged the many persons
who contributed their time and expertise to our study. We wish, once again,
to express our gratitude to those persons, and, particularly, to the Project
Director, Professor John M. Evans, of Osgoode Hall Law School, York
University.

All of which is respectfully submitted.

James R. Breithaupt
Chairman

>6<^^^

H. Allan Leal
Vice Chairman

c:^^^

Earl A. Cherniak
Commissioner

J. Robert S. Prichard
Commissioner

March 23, 1988

Margaret A. Ross
Commissioner

[2791

APPENDIX

Draft Bill

Bill 00

198

An Act to revise the Law respecting comparative Fault
and Contribution among Wrongdoers

HER MAJESTY, by and with the advice and consent of the
Legislative Assembly of the Province of Ontario, enacts as
follows:

1. In this Act,

"concurrent wrongdoer" means one of two or more per-
sons whose wrongful acts contribute to the same damage
suffered by one or more persons and includes a person
who, without fault, is liable for the wrongful act of
another;

"injured person" means a person who suffers damage as a
result of an act or omission of a concurrent wrongdoer.

COMPARATIVE FAULT

Interpretation

2.— (1) Where a person is injured by the wrongful act of
one or more persons and the fault of the injured person is
found to have contributed to the damage, the court shall
determine the degrees of fault of the person or persons and
of the injured person that contributed to the damage, and
shall apportion the damages in proportion to the degrees of
fault that are so found.

Apportionment of
fault

(2) This section apphes where the liability for damages
arises from

Application

(a) a tort other than conversion, detinue and inj ury to
a reversionary interest;*

* The questions whether the new apportionment legislation should apply in the case of
actions for conversion, detinue, and injury to a reversionary interest, and whether it
should apply where the true owner has recovered the goods without the assistance of a
court, have been deferred for consideration in the Commission's Project on Remedies
for Wrongful Interference with Goods.

[281]

282

Recovery by third
person

Agreements

Economic loss

Degree of fault

Other powers
to apportion

(b) a breach of statutory duty;

(d) a breach of contract that resuhs in personal injury
or property damage, whether the tort or breach is
intentional or not.

(3) Subsection (1) applies notwithstanding that the
person making the claim for damages is not the person
suffering the damage.

(4) The apportionment of fault under subsection (1)
where damage arises under a contract is subject to an
agreement, express or implied.

(5) The damage referred to in this section includes
economic loss.

(6) If the degrees to which the fault of persons
contributes to the damage cannot be determined in
relation to each other, those persons shall be deemed to
have contributed equally in relation to each other.

(7) Nothing in this section derogates from a power a
court has to apportion damages apart from this section, but
where the power is given by or under another Act, section
23 appHes.

Application of
ss.4 to 19

LIABILITY AND CONTRIBUTION OF
CONCURRENT WRONGDOERS

3.— (1) Sections 4 to 19 apply where Uability for damages
or to deliver goods or perform services arises from,

(a) a tort;

(b) a breach of statutory duty;

(d) a breach of a fiduciary duty, including a breach of
trust, except as otherwise specifically provided by
the Trustee Act f or

(e) a breach of any other legal duty.

* The reference in this provision is not to the present Ontario Trustee Act, but to the
revised Trustee Act recommended by the Commission in its Report on the Law of Trusts
(1984), which contains provisions dealing specifically with contribution among trustees.

283

(2) Sections 4 to 6 apply where the HabiUty is for a debt,
as specifically provided therein.

Concurrent Liability

Application of
ss. 4 to 6 to debt

4. — ( 1) Each concurrent wrongdoer or debtor is liable for
the damage or debt that would be assessed if the concurrent
wrongdoer or debtor were the only person who is liable to
the injured person or creditor.

(2) The total amount recoverable by an injured person
or creditor shall not exceed the amount of that person's
damage or debt.

5.— (1) A judgment against one concurrent wrongdoer
or debtor does not preclude judgment against another
concurrent wrongdoer or debtor in the same or a separate
proceeding.

(2) Where a person brings separate proceedings against
two or more concurrent wrongdoers or debtors, the person
is not entitled to costs in a proceeding other than the one in
which judgment is first given, unless the court is of the
opinion that there are reasonable grounds for bringing
more than one proceeding.

(3) In an action brought by an injured person, the
injured person may establish the amount of damages for
which a concurrent wrongdoer is liable without regard to
the amount of damages awarded to the injured person
against another concurrent wrongdoer.

6. A release of one concurrent wrongdoer or debtor or
the acceptance of an offer of settlement does not preclude
judgment against another concurrent wrongdoer or debtor,
unless the release or settlement expressly so provides, or in
the case of a debt, prejudices the rights of another debtor
who is liable for the same debt.

Concurrent liability
of debtors and
wrongdoers

Maximum recovery

Separate actions

Costs

Single judgment

Releases and
settlements

Contribution

7.— (1) A concurrent wrongdoer is entitled to claim con-
tribution from other concurrent wrongdoers whether or
not his or her conduct is intentional or of a criminal nature
or whether or not the damages awarded are punitive.

(2) A concurrent wrongdoer who is entitled to
contribution from another concurrent wrongdoer is
subrogated to the rights of the injured person against the
other concurrent wrongdoer for the purpose of recovering
the contribution to which he or she is entitled.

Right to contribution

Subrogation

284

Other rights to
contribution or
indemnity

(3) Nothing in this Act affects any express or impUed
contractual or any other right to indemnity, or any express
or imphed contractual provision respecting contribution,
and in particular, no person is entitled to contribution
from a person who is entitled to be indemnified, by the
claimant, for the damages for which the contribution is
sought.

Finding of HabiHty
and assessment of
damage

8.— (1) A judgment in favour of the injured person
against a concurrent wrongdoer is, for the purpose of
claiming contribution from another concurrent wrongdoer
who was not a party in the action or was not joined as a
third party, conclusive as to the liability of the concurrent
wrongdoer but not as to the assessment of the damage,
except that the sum to which the concurrent wrongdoer
may be required to contribute shall not be an amount
greater than the amount determined by the judgment.

Idem, where two
assessments of
damage

(2) Where the injured person has obtained judgment
against two or more concurrent wrongdoers in separate
proceedings and the damage of the injured person has been
assessed differently, in a claim for contribution by one of
them from another of them the court shall determine the
sum to which the parties to the claim shall contribute.

Amount of
contribution

9.— (1) The amount of contribution recoverable by one
concurrent wrongdoer from another is the amount that is
found by the court to be just and equitable having regard to
the degree of responsibility of each concurrent wrongdoer
for the damage of the injured person.

Degree of
responsibility

(2) The degree of responsibihty found by a court under
subection (1) may include any degree of responsibihty,
including responsibility for none or all of the damage.

Idem

(3) If the degree of responsibility of a concurrent
wrongdoer cannot be determined in relation to another
concurrent wrongdoer, they shall be deemed to be equally
responsible.

Limitation on
contribution

(4) A concurrent wrongdoer whose liability for damages
is less than that of another concurrent wrongdoer because
of.

(a) the contributory fault of the injured person;

(b) a contract made with the injured person before the
cause of action arose;

285

(d) any other reason,

is not liable to pay by way of contribution a sum that
exceeds the amount of his or her liability to the injured
person.

(5) Where the liability of a concurrent wrongdoer to the
injured person is reduced as set out in subsection (4), the
reduced liability does not affect the amount of
contribution payable except as provided by subsection (4).

(6) Where there are three or more concurrent
wrongdoers and one cannot pay his or her due share of the
liability because of insolvency or for any other reason, that
share shall be allocated to the other concurrent wrongdoers
proportionately to the degrees in which they are found
responsible, without discharging the liability of the
defaulting concurrent wrongdoer to contribute.

(7) The delivery of goods or performance of a service by
a concurrent wrongdoer in satisfying his or her liability to
the injured person shall be included in a claim for
contribution, and the value shall be fixed by the court for
the purpose.

10.— (1) Where a concurrent wrongdoer makes a settle-
ment with the injured person that does not discharge the
liability of another concurrent wrongdoer, the sum to
which they may be required to contribute is the value of the
consideration given for the settlement that is established by
the concurrent wrongdoer who settled to have been reason-
able in all the circumstances.

Effect of reduced
liability

Insolvent wrongdoer

Value of goods and
services

Determination of
damages where
partial settlement

(2) Where the court is satisfied that the amount of
consideration given for a settlement referred to in
subsection (1) was not reasonable in all the circumstances,
the court may fix the value of a reasonable consideration
for the purposes of contribution.

(3) Where, in a case referred to in subsection (1), the
injured person obtains judgment against a concurrent
wrongdoer who claims contribution from the concurrent
wrongdoer who settled, the sum to which they may be
required to contribute is the amount of the injured person's
damages as determined by the court determining the claim
for contribution.

(4) Where, in a case referred to in subsection (1),
proceedings are instituted against a concurrent wrongdoer
to which the concurrent wrongdoer who settled is joined as

Idem

Idem, where
judgment

Idem, where settler is
third party

286

Determination of
damages where full
settlement

a third party, the sum to which they may be required to
contribute is the amount of their common habiHty for the
damage as determined in those proceedings.

11.— (1) Where a concurrent wrongdoer makes a settle-
ment with the injured person that discharges the liability of
another concurrent wrongdoer, the sum to which they may
be required to contribute is the value of the consideration
given for the settlement that is established by the concur-
rent wrongdoer who settled to have been reasonable in all
the circumstances.

Idem

Parties to action for
contribution

Execution of order
for contribution

Payment into court

12. In a proceeding to determine contribution between
concurrent wrongdoers, the court shall disregard the exis-
tence of concurrent wrongdoers who are not parties to the
proceeding.

13.— (1) A concurrent wrongdoer shall not execute an
order for contribution against another concurrent wrong-
doer until the wrongdoer claiming contribution has paid to
the injured person more than his or her share of the Uability
or until the contributing wrongdoer can no longer be sued
successfully by the injured person.

(2) Where the judgment of the injured person is not
satisfied, any amount paid under the order shall be paid
into court toward satisfaction of the judgment.

Defences

Defences to claim for
contribution

14.— (1) It is a defence to a claim for contribution that,

(a) the person against whom the claim is made could
not at any time be held liable to the injured person
for the damage;

(b) the person against whom the claim is made has
ceased to be liable to the injured person by virtue
of the expiration of a limitation period contained
in a contract between them that was entered into
before the injured person's cause of action arose;
or

287

(c) the person from whom contribution is claimed
has been held not liable on the merits in an action
by the injured person.

(2) A claimant for contribution under this Act may not
rely upon a judgment in a proceeding to which the person
from whom contribution is claimed was not a party or was
nqt joined as a third party where that judgment was
obtained by collusion or fraud.

15. A concurrent wrongdoer may recover contribution
from another concurrent wrongdoer even though the per-
son against whom the claim is made has ceased to be liable
to the injured person because of,

(a) the expiration of a statutory limitation period, or
the existence of an equitable defence based on
delay;

(b) the dismissal of an action by the injured person for
delay;

(d) a settlement with or a release or waiver by the
injured person after the injured person's cause of
action arose,

whether the person against whom the claim for contribu-
tion is made ceased to be hable to the injured person before
or after the time when the claimant's right to contribution
arose, determined in the same manner as set out in section
18.

Settlements

Judgment obtained
by collusion or fraud

Defences excluded

16. The damages awarded to an injured person against a
concurrent wrongdoer shall be reduced by the amount of
consideration received under a settlement with another
person against whom the injured person has made a claim
for the same loss.

Effect of settlement
on damages

17.— (1) A concurrent wrongdoer who has made a settle-
ment with the injured person, including a settlement that is
approved by a court or is the subject of a judgment
obtained by consent, may institute or continue proceedings
for contribution from another concurrent wrongdoer, if the

Recovery of
contribution

288

Idem

Limitation period for
contribution

Idem

settlement provides for the discharge or reduction of the
liabihty of the other concurrent wrongdoer to the injured
person.

(2) Subsection (1) applies even though the person who is
claiming contribution can be shown to have been not liable
to the injured person, but the court may, in its discretion,
refuse to order contribution if the person claiming
contribution made the settlement without believing that he
or she was or might be liable and without regard to any legal
proceedings that might be instituted against him or her by
the injured person for the claim settled.

Limitations

18.— (1) A proceeding to claim contribution between
wrongdoers must be commenced within two years after the
right to contribution arose.

(2) Where the claim to contribution is based on a
settlement, the right to contribution shall be deemed to
arise when the settlement is made.

Idem

(3) Where the claim to contribution is based on a
judgment, the right to contribution shall be deemed to arise
when the judgment is given.

Procedure

Crossclaim

19.— (1) A claim for contribution between parties to a
proceeding commenced by an injured person must be
made by crossclaim in accordance with the Rules of Civil
Procedure.

Third party claim

(2) A claim for contribution against a concurrent
wrongdoer who is not a party to a proceeding commenced
by an injured person must be by third party claim in
accordance with the Rules of Civil Procedure.

Separate action (3) A Concurrent wrongdoer who has been held liable to

an injured person may institute a separate proceeding to
claim contribution from another concurrent wrongdoer
only if the court is satisfied that it was impossible to
proceed by crossclaim or impossible or impracticable to
proceed by third party claim.

289

GENERAL

20. This Act binds the Crown.

Act binds Crown

21. This Act appHes where damage is caused or contrib-
uted to by the act or omission of a person notwithstanding
that another person had the opportunity of avoiding the
consequences of the act or omission and failed to do so.

Last clear chance

22. A question of the degree of fault or responsibility that
contributed to damage is a question for the trier of fact.

23.— (1) This Act has primacy over any other Act that
provides for the same subject matter, unless the other Act
specifically provides that it is to apply notwithstanding this
Act.

(2) This Act is subject to the Workers ' Compensation Act
and section 34(1) ofihcTrustee Act.

24. The Negligence Act , being chapter 315 of the Revised
Statutes of Ontario, 1980 and section 149 of the Courts of
Justice Act, 1984, being chapter 11, are repealed.

25. This Act comes into force on a day to be named by
proclamation of the Lieutenant Governor.

26. The short title of this Act is the Contribution and
Comparative Fault Act, 19 .

Fault or
responsibility a
question of fact

Primacy

Act subject to
R.S.O. 1980, c. 539
andc. 512

Commencement

Short title

Copies of this report may be purchased from the Ontario Government
Bookstore, 880 Bay Street, Toronto, or by mail order from Pubhcations
Services Section, 5th Roor, 880 Bay Street, Toronto, Ontario M7A 1N8.
Telephone 965-6015. Toll free long distance 1-800-268-7540; in area code
807, 0-Zenith 67200.

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