Friday, May 18, 2018

SCC - Careless Garage Not Liable For Injury to Teenager

Rankin (Rankin’s Garage & Sales) v. J.J. 2018 SCC 19 (Rankin)

The Supreme Court of Canada recently held (7-2) that the owners of a commercial garage did not owe a duty of care to a boy who was seriously injured after he and a friend stole a car from the garage even though the garage was negligent in allowing the car to be stolen.

In the summer of 2006, in the village of Paisley, Ontario, the plaintiff J (who was then 15 years old) and his friend C (then 16 years old) were at C’s mother’s house.  The boys drank alcohol, some of which was provided by C’s mother, and smoked marijuana.

After midnight, the boys left the house intending to steal valuables from unlocked cars.  Eventually, they made their way to Rankin’s Garage & Sales, a business located near Paisley’s main intersection.  The garage property was not secured and the boys began checking for unlocked cars.  C found an unlocked Toyota Camry parked behind the garage.  The keys were in the car’s ashtray.  Although he did not have a driver’s license and had never driven on the road before, C decided to steal the car so he could go and pick up a friend in nearby Walkerton, Ontario.  C told J to get in, which he did. C drove the car out of the garage and headed towards Walkerton.  On the highway, the car crashed and J suffered a catastrophic brain injury.

Through his litigation guardian, J sued Rankin’s Garage, his friend, C and C’s mother for negligence.  The issue on appeal to the Supreme Court was whether Rankin’s Garage owed J a duty of care. 

Justice Karakatsanis wrote a majority decision for seven justices of the court.  Justice Brown wrote a dissenting decision (with Justice Gascon concurring). 

The majority held that the case could be resolved based on a straightforward application of existing tort law principles.  It held that J did not provide sufficient evidence to support that Rankin’s Garage owed him a duty of care.

Because there is no clear guidance in Canadian case law on whether a business like the garage owes a duty of care to someone who was injured following the theft of a vehicle, the Supreme Court conducted an Anns/Cooper analysis.  That analysis provides that to establish a duty of care, there must be a relationship of proximity in which the failure to take reasonable care might foreseeably cause loss or harm to the plaintiff.  Once foreseeability and proximity are established, a prima facie duty of care is made out.  The question is an objective one, and properly focused, is whether foreseeability was present prior to the accident and not with the aid of 20/20 hindsight.

The court held that although the results of this case were tragic, physical injury to J was only foreseeable when there is something in the facts to suggest that there is not only a risk of theft of the car, but also a risk that the stolen car might be operated in a dangerous manner.  The risk of theft in general does not automatically include the risk of theft by minors.  The court found that in this case there was insufficient evidence to suggest that minors would frequent the premises at night or be involved in joyriding or theft.  Rankin’s Garage, as a commercial garage, did not have a positive duty to guard against the risk of theft by minors.  The fact that J was a minor does not automatically create an obligation for the company to act. 

The court held that J had not met the burden of establishing a prima facie duty of care because reasonable foreseeability could not be established on the factual record of the case.  A business will only owe a duty to someone who is injured following the theft of a vehicle when in addition to theft the unsafe operation of the stolen vehicle was reasonably foreseeable. 

The dissenting judges held a view that many may believe was more logical.  They held that the concept of “reasonable foreseeability” represents a low threshold and is usually quite easy to overcome.   A plaintiff must merely provide evidence to persuade the court that the risk of the type of damage that occurred was reasonably foreseeable to the class of the plaintiff that was damaged.  In this case, both the trial judge and the Ontario Court of Appeal held that it was reasonably foreseeable that an individual such as J could suffer physical injury as a consequence of Rankin’s Garage’s negligence in failing to properly lock, secure and store vehicles.  Justices Brown and Gascon concluded that the majority of the court had conceded that the risk of theft was reasonably foreseeable but, in order to hold the garage owner responsible, would have required additional evidence that theft would have occurred at the hands of a minor in order to find that physical injury to J was foreseeable.  The dissenting judges held that minors are no less likely to steal cars than any other individual.  In order to establish a duty of care, J was not required to show that the characteristics of the particular thief or the way in which the injury occurred were foreseeable.  Imposition of a duty of care was conditioned only upon J showing that physical injury to him was reasonably foreseeable under any circumstances flowing from Rankin’s Garage’s negligence.    

Regards,


Blair

Friday, May 4, 2018

SCC Rules That Provinces Can't Restrict or Limit Interprovincial Flow of Goods



The Supreme Court of Canada recently released its judgment in R. v. Comeau, 2018 SCC 15.  The decision confirmed that the Province of New Brunswick has the power to enact laws which prevent its residents from bringing large quantities of cheap alcohol into the province from Quebec.  The Court held that the primary purpose of the New Brunswick regulatory scheme is not to restrict trade across a provincial boundary but to enable public supervision of the production, movement, sale and use of alcohol within New Brunswick.  However, more importantly, the Court held that the Constitution Act, prohibited laws whose primary purpose was to restrict or limit the free flow of goods across the country.

The judgment was delivered by the court.

The court began by giving a history lesson.  It noted that when Canada was formed in 1867, the British North America Act, 1867 (UK) (“BNA”), united individual British colonies into the new country.  Prior to this, each colony had its own power to impose tariffs at its borders.  Part VIII of the BNA, now called the Constitution Act, 1867 (“Constitution Act”), contains provisions for transferring this power to levy tariffs to the federal government.  Section 121, at the heart of  Part VIII, was at issue in this appeal:  “All Articles of the Growth Produce or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces”.

The respondent, Gerard Comeau, contended that section 121 is essentially a free-trade provision.  In his view, that section ensured that no barriers could be erected to impede the passage of goods across provincial boundaries.  However, the appellant, The Province of New Brunswick, argued that section 121 was intended only to take away the power to impose tariffs or tariff-like charges at provincial boundaries.  The trial judge agreed with Mr. Comeau.  The matter eventually came before the Supreme Court of Canada which posed the question this way:  “What does it mean for articles to be “admitted free” as provided for in section 121?” 

The Supreme Court mused: if to be “admitted free” is understood as a constitutional guarantee of free trade, the potential reach of section 121 is vast.  Agricultural supply management schemes, public health-driven prohibitions, environmental controls and comparable regulatory measures that incidentally impede the passage of goods crossing provincial borders may be invalid.

The dispute arose out of Mr. Comeau’s assertion that section 121 of the Constitution Act, prevents the province of New Brunswick from legislating that New Brunswick residents cannot stock alcohol from another province.  The applicable section of the Liquor Control Act of New Brunswick (“NB Liquor Act”), provides that:  “Except as provided by this Act or the regulations, no person, within the Province, by himself, his clerk, employee, servant or agent shall… (b) have or keep   liquor, not purchased from the Corporation”.

The facts of the case are straight forward.  Mr. Comeau was a resident of the Tracadie-Sheila region on the Acadian Peninsula in northeastern New Brunswick.  He drove to Campbellton, in the northwest of the province, crossed the Restigouche River and entered Quebec.  He did what many Canadians who live close to cheaper alcohol prices across provincial boundaries do.  He visited three different liquor stores and stocked up.  However, the Campbellton RCMP had become concerned with the frequency by which New Brunswick residents were sourcing large quantities of alcohol in Quebec in contravention of the law.  The RCMP started monitoring New Brunswick visitors who commonly frequented liquor stores on the Quebec side of the border.  Mr. Comeau was one of these visitors. 

Returning from Quebec to New Brunswick, Mr. Comeau was stopped by the RCMP and charged under the section 134(b) of the NB Liquor Act that prohibited buying alcohol outside the province.  He was charged under  and fined $240 plus administrative fees. 

At trial, the New Brunswick provincial court agreed with Mr. Comeau that the NB Liquor Act infringed section 121 of the Constitution Act.  The trial judge found section 134(b) to be of no force and effect against Mr. Comeau and dismissed the charge.  In doing so, the trial judge found that a 1921 Alberta Court of Appeal decision was wrongly decided and should not be applied. 

However, the Supreme Court of Canada disagreed.  It held that section 134(b) of the NB Liquor Act does not infringe section 121 of the Constitution Act. 

The court held that common law courts are bound by authoritative precedent.  Subject to extraordinary exceptions, a lower court, such as the New Brunswick trial court, must apply the decisions of higher courts to the facts before it.  For a binding precedent from a higher court to be cast aside, the new evidence must fundamentally shift how judges understand the legal question in issue.  This high threshold was not met in this case.  The trial judge relied on evidence presented by a historian who he accepted as an expert.  The trial judge accepted the expert’s description of the drafters’ motivations for including section 121 in the Constitution Act and how those motivations drive how section 121 is to be interpreted.  The SCC held that reliance on the expert’s opinion was erroneous.  A trial judge should not depart from precedent on the basis of such opinion evidence because it abdicates the judge’s primary responsibility to determine the applicable law.

The court  then considered how section 121 should be interpreted.  It held that the moderate approach to statutory interpretation provides a guide for determining how “admitted free” in section 121 should be interpreted.  The text of the provision must be read in conjunction with the context and purpose of the statute.  Constitutional texts must be interpreted in a broad and purposive manner and in a manner that is sensitive to evolving circumstances.   Applying this framework to section 121, the text, historical context, legislative context and underlying constitutional principles  support a flexible purpose of section 121, one that respects an appropriate balance between federal and provincial powers. 

The Court held that the phrase “admitted free” is ambiguous and falls to be interpreted on the basis of historical, legislative and constitutional context.  In order to achieve economic union, the drafters of the constitution agreed that the individual provinces needed to relinquish their tariff powers.  The historical context supports the view that section 121 prohibits imposition of charges on goods crossing provincial boundaries, i.e. tariffs and tariff-like measures.    However, the evidence does not suggest that the provinces would lose their power to legislate under section 92 of the Constitution Act for the benefit of their constituents even if that might have impact on inter-provincial trade.

The Supreme Court held that the legislative context of section 121 indicates that it was part of a scheme that enabled shifting of customs, excise and similar levies from the former colonies to the “Dominion”, it should be interpreted as applying to measures that increase the price of goods when they cross the provincial border, and should not be read so expansively that it would impinge on legislative powers under sections 91 and 92 of the Constitution Act. 

The purpose of section 121 is to prohibit laws that in essence restrict or limit the free flow of goods across the country.  Second, laws that pose only incidental effects on trade as part of broader regulatory trade schemes not aimed at impeding trade do not have the purpose of restricting inter-provincial trade and do not violate section 121.  Therefore, section 121 does not catch burdens on goods crossing provincial borders that are merely incidental effects of a law or scheme aimed at some other purpose. 

A claimant alleging that a law violates section 121 must establish that the law in essence and purpose restricts trade across a provincial border.   The claimant must establish that the law imposes an additional burden on goods by virtue of them coming in from outside the province and, restriction of cross-border trade must be the primary purpose of the law thereby excluding laws enacted for other purposes. 


In this case, section 134(b) of the NB Liquor Act impedes liquor purchases originating outside of New Brunswick.  In essence, it functions like a tariff even though it may have other purely internal effects.  However, the text and effects are aligned and suggest that the primary purpose of section 134(b) is not to impede trade but rather to restrict access to any non-corporation liquor, not just liquor brought in from another province.  The scheme serves New Brunswick’s choice to control the supply use of liquor within the province.  The primary purpose of section 134(b) is to prohibit holding excessive quantities of liquor from supplies not managed by the province.  While one effect of that section is to impede inter-provincial trade this effect is only incidental in light of the objective of the provincial scheme in general.  Therefore, while section 134(b) in essence impedes cross-border trade, this is not its primary purpose.  The court held that as a result, section 134(b) does not infringe section 121 of the Constitution Act. 

Regards,

Blair