Federal Court Decisions

     T-1325-95

Between:

     FRANCES YU TAN, ROBERT KWOK-HUNG TAN by his

     Guardian ad litem, Frances Yu Tan,

     STEPHANIE PUI-LING TAN by her Guardian ad litem,

     Frances Yu Tan, and YUET SHIM YU,

     Plaintiffs,

     - and -

     THE OWNERS AND ALL OTHERS INTERESTED IN THE

     SHIP "PACIFIC BRILLIANCE", THE SHIP "PACIFIC BRILLIANCE",

     SAILWELL SHIPPING COMPANY LIMITED and ISLAND NAVIGATION

     CORPORATION INTERNATIONAL LTD.

     Defendants.

     REASONS FOR ORDER

ROULEAU, J.

     This matter came before me at Vancouver on October 7, 1996.

     Solicitors for the Defendants, other than the Defendant Island Navigation Corporation International Ltd., sought leave to file and serve a third-party notice on Westshore Terminals Ltd. ("Westshore"). This was opposed on the basis that the third-party proceedings are barred by sections 10(1) and 10(7) of the Workers Compensation Act, R.S.B.C. 1979, Chapter 437; as well, the impugned third party was seeking increased costs.

     The facts may be summarized as follows: the suit arises out of the death of Mr. Bon Kiem Tan on July 27, 1994. It is alleged that he fell from a gangplank while disembarking the M.V. Pacific Brilliance which was moored alongside a birth owned and operated by Westshore Terminals Ltd. He was, at the time, an employee of Vancouver Shipyards Co. Ltd.; the company had been hired to perform certain repairs aboard the vessel. As the Pacific Brilliance was preparing to depart the terminal, Mr. Tan and his co-worker were asked to disembark. A temporary gangway that had been placed by someone other than an employee of Westshore fell off the edge of the dock; there was no safety net underneath the gangway and Mr. Tan fell into the water and drowned.

     The following agreed statement of facts were submitted to the Workers Compensation Board to obtain a section 11 determination: at all material times to this action Mr. Tan was an employee of Vancouver Shipyard Co. Ltd. and was a "worker" within the meaning of the Workers Compensation Act of B.C. and his death occurred in the course of his employment. Vancouver Shipyards Co. Ltd. and Westshore Terminals Ltd. were both "employers" registered pursuant to the BC Workers Compensation Act.

     The Board confirmed that all were parties within the meaning of Part I of the Act and a certificate issued on December 18, 1995. Compensation had been previously agreed upon for the Plaintiffs; by statute their rights are subrogated and this action was launched by the Board in an attempt to recover, if possible, from other negligent parties, should they be so found.

     The following are the pertinent sections of the Workers Compensation Act of B.C.:

10.      (1)      The provisions of this Part are in lieu of any right and rights of action, statutory or otherwise, founded on a breach of duty of care or any other cause of action, whether that duty or cause of action is imposed by or arises by reason of law or contract, express or implied, to which a worker, dependant or member of the family of the worker is or may be entitled against the employer of the worker, or against any employer within the scope of this Part, or against any worker, in respect of any personal injury, disablement or death arising out of and in the course of employment and no action in respect of it lies. This provision applies only when the action or conduct of the employer, his servant or agent, or the worker, which caused the breach of duty arose out of an in the course of employment within the scope of this Part.

(2)      When the cause of the injury, disablement or death of a worker is such that an action lies against some person, other than an employer or worker within the scope of this Part, the worker or dependant may claim compensation or may bring an action. If the worker or dependant elects to claim compensation, he shall do so within 3 months of the occurrence of the injury or any longer period that the board allows.

. . . . .

(6)      If the worker or dependant applies to the board claiming compensation under this Part, neither the making of the application nor the payment of compensation under it shall restrict or impair any right of action against the party liable, but as to every such claim the board is subrogated to the rights of the worker or dependant and may maintain an action in the name of the worker or dependant or in the name of the board; and if more is recovered and collected than the amount of the compensation to which the worker or dependant would be entitled under this Part, the mount of the excess, less costs and administration charges, shall be paid to the worker or dependant. The board has exclusive jurisdiction to determine whether it shall maintain an action or compromise the right of action, and its decision in final and conclusive.

(7)      If, in an action brought by a worker or dependant of a worker or by the board, it is found that the injury, disablement or death, as the case may be, was due partly to a breach of duty of care of one or more employers or workers under this Part, no damages, contributions or indemnity are recoverable for the portion of the loss or damage caused by the negligence of that employer or worker; but the portion of the loss or damage caused by that negligence shall be determined although the employer or worker is not a party to the action. . . .

[emphasis added]

     The Defendants are prepared to consent to the dismissal of the third-party proceedings, but suggest the following terms:

A.      In accordance with section 10(7) of the Workers Compensation Act, the court shall determine the portion of the loss or damage caused by the negligence of Westshore Terminals Ltd., if any, although Westshore Terminals Ltd. is not a party to the action.

B.      In accordance with section 10(7) of the Workers Compensation Act, should Westshore Terminals Ltd. be found partially or completely at fault for the death of the of [sic] Bon Kiem Tan, no damages, contributions or indemnity are recoverable against the Defendants for the portion of the loss or damage caused by the negligence of Westshore Terminals Ltd.

C.      The Defendants have the right to obtain full discovery of documents from Westshore Terminals Ltd. as if Westshore Terminals ltd. had filed a general denial to the Third Party Notice.

D.      The Defendants have the right to obtain full oral discovery from Westshore Terminals Ltd. as if Westshore Terminals ltd. had filed a general denial to the Third Party Notice.

E.      Westshore Terminals Ltd. is entitled to general costs in accordance with Tariff B Column III and the costs of this Motion on an uncontested basis.

     It is submitted by counsel for Westshore that the Court has no jurisdiction to entertain third-party proceedings against them; that they are bound by sections 10(1) and 10(7) of the Act and they should be struck pursuant to Rule 1729 of the Federal Court Rules.

     The Defendants, on the other hand, submit that Westshore's participation or only conditional removal from the proceedings is essential, otherwise their clients would be severely prejudiced at trial. They submit that the Plaintiffs, at a later date, could argue that section 10 is not applicable for constitutional reasons; that a trial judge may not be able to determine proportionate liability that may be attributable to Westshore and that the Plaintiffs could recover 100% from the Defendants even if Westshore is determined to be partially at fault.

     They also raise the issue that a recent decision of the BC Supreme Court in Craftchick v. Jones et al. (1994), 91 B.C.L.R. (2d) at 100, may not support the third-party's interpretation of the law as it presently stands; as of now an appeal launched in the BC Court of Appeal has been heard, but no decision has yet been released.

     An Ontario High Court case, DiCarlo v. DiSimone et al. (1983), 140 D.L.R. (3d) 477 is one of the leading cases dealing with actions for damages when either an injured party or dependants are bound by the provisions of the Workers Compensation legislation.

     It was essentially determined that the Workers Compensation Board is empowered to determine when the right of action can be taken away. In DiCarlo the plaintiff was a passenger in a motor vehicle (involved in a collision), driven by one DiSimone; it was owned by a construction company (Street Construction Ltd.) that was covered under Part I of the Act. The plaintiff brought an action against the company as well as the other parties involved in the accident and whose owners of the vehicle (Watson's) were not subject to Part I of the Workers Compensation Act.

     In the application to determine a point of law Osler, J., on consent of counsel, found that the plaintiff could not bring suit against the owner of the vehicle in which he was a passenger since it was the property of a company that was subject to Part I of the Act. Nonetheless, the plaintiff could pursue his remedy against the owner of the other vehicle involved in the collision. The action as against the construction company vehicle was dismissed. He confirmed that when an injured employee claims benefits under the Act, the Board is subrogated to those rights of the injured employee and may entertain an action in the name of the employee.

     He wrote at page 479 - 480:

The purpose of the Workmen's Compensation Act is to remove from the courts jurisdiction to deal with the rights of employees and the liability of employers when personal injuries are suffered by employees of such employers in the course of their employment. Accordingly, the board has, in the present case, ruled that the right to sue the employer, Street Construction Limited, and the plaintiff's fellow employee, Franco DiSimone, is one which has been taken away by the statute. This ruling it [sic] is plainly within the jurisdiction of the board to make and, accordingly, the uncertainty of recovery no longer plagues the plaintiff and the necessity of submitting to litigation and to the uncertainty of the assessment of damages by a court is removed from the defendant company and the defendant employee.

The whole purpose of the Act would be subverted if it were now held that a third party, such as Lillian V. Watson and Alfred Watson in the present case, could, nevertheless, compel the employer to respond to litigation and to an assessment of damages made by a court in the guise of exercising a statutory right to contribution by reason of the Negligence Act, R.S.O. 1980, c. 315. The defendant company has, in a sense, already answered to the plaintiff for his injuries by virtue of its contribution to the accident fund and its inclusion as an employer covered by Schedule 1 of the Act. Accordingly, its immunity from being required to make contribution or indemnity, conferred as I have found by s. 8(11), seems not only to be one conferred by the statute but to be one that is completely in accord with the spirit of the Act and one that commends itself as fair and equitable.

It therefore appears to me and I find that the plaintiff will not be entitled to recover judgment at trial as against the defendants, Lillian V. Watson and Alfred Watson, for any of his damages in excess of the degree of negligence determined against those defendants.

[emphasis added]

     The Manitoba Court of Appeal further summarized the principles that are generally applicable in cases involving Workers Compensation Board as third parties: Workers Compensation Board et al. v. Hagebock et al.; Canada Cement LaFarge Ltd. as third party reported at 22 D.L.R. (4th) 473. The Court held that actions where the defendant seeks to add a third party, barred by statute in which no contribution or indemnity or relief of a financial nature can be obtained, should be struck. Referring to section 7(8) of the Manitoba Workers Compensation Act which is essentially the same as section 10(7) of the BC Act, it contemplates that in this provision, in which a third party has no financial responsibility, that portion of fault attributable to it will be determined at trial even though it is not joined in the proceedings. The Court wrote at p. 476:

. .. an attempt is made to join the employer of the injured workman as a third party, not to obtain a financial remedy, but for other purposes; to have the privilege of examining an officer or employee of Canada Cement on discovery, and to obtain a declaration as to Canada Cement's share of fault in causing the accident.

. . . . . . .

Declarations, however, are not available as a remedy to answer hypothetical or academic questions which have no real impact on the interests of the parties.

     The Court concluded:

There being no real lis between the defendants and the proposed third party, the third party notice must now be set aside. The plaintiffs and the third party are entitled to costs throughout, . . . .

         I then scrutinized the recent decision of the BC Supreme Court in the case of Craftchick [supra] and I disagree with the submission of counsel for the Defendants. As I read the reasons for judgment I was satisfied that the Chief Justice of BC did not disagree with the reasoning in DiCarlo [supra].

     One can only conclude from the principles derived and adopted from the existing jurisprudence that the motion to strike the third-party notice should be allowed.

     By statute there is no lis between the Defendants and the third parties; by statute and by the jurisprudence they should not be joined even conditionally. The risk by not having them as parties to the action is not well founded. To say that the Plaintiffs may attempt to have section 10 of the BC Workers Compensation Act declared unconstitutional is pure speculation. It has not been pleaded and if it should be raised at a later date, the Board, as well as the Defendants, would be given proper notice. Further, how could a plaintiff who is subrogated to the Board's rights possibly obtain authority to bring such an application when it's cause of action relies on the power given it by the Board? It would be self-defeating. The suggestion that the Defendants may in some way be obligated to contribute 100% of the damages, even if Westshore is found to be contributorily negligent, is also unfounded.

     The Workers Compensation Act itself in section 10(7) is specific:

. . . damages, contributions or indemnity are recoverable for the portion of the loss or damage caused by the negligence of that employer or worker; but the portion of the loss or damage caused by that negligence shall be determined although the employer or worker is not a party to the action. . .

     All of the relevant jurisprudence in these reasons make the same statement:

It therefore appears to me and I find that the plaintiff will not be entitled to recover judgment at trial as against the defendants, Lillian V. Watson and Alfred Watson, for any of his damages in excess of the degree of negligence determined against those defendants.

[DiCarlo [supra] at p. 480]

In the context of that action, the court would still determine whether Canada Cement was also at fault, and their respective proportions of responsibility.

[Workers Compensation Board et al. v. Hagebock et al. [supra] at 476]

     Seaton, J.A. adopted and reiterated the same principle and enunciated the following in Craftchick v. Jones [supra] at p. 109:

. . . Middleton v. Chen, a 1982 decision of this court, was wrongly decided and to adopt as a correct statement of the law the decision of Osler J. of the Ontario High Court in DiCarlo v. DiSimone. . .

I think that the plain meaning of s. 10, and particularly subs. (7), must apply. It says, and I paraphrase, "If, in an action brought by a dependant of a worker, it is found that the death was due partly to a breach of duty of care of one employer under this Part, no damages are recoverable for the portion of the loss or damage caused by the negligence of that employer." (emphasis added)

     On the issue of costs I will be brief. The third party did not provide the Court with a draft Bill of Costs, but suggested in his submissions that his firm billed their client, Westshore, in excess of $10,000.00 not including the preparation and attendance on this motion.

     As I reviewed the file, the pleadings and the affidavit material submitted, I found that the costs being sought are excessive.

     Though there may have been some lengthy telephone negotiations by counsel for Westshore with both the Plaintiffs' and the Defendants' solicitors, all correspondence between the parties, including the Workers Compensation Board of B.C., totalled no more than a dozen letters. These were limited primarily to two matters: resisting the third-party application and the obtaining of a section 11 determination from the Workers Compensation Board of B.C., which could be required by the Court or one of the parties.

     I am nevertheless prepared to exercise my discretion under Rule 344 of the Federal Court Rules. I am satisfied that in light of the jurisprudence and the B.C. Workers Compensation Act the procedure followed by the Defendants was clearly unwarranted.

     I hereby fix the costs payable to the third-party solicitors at $5,000.00 inclusive of the costs of this motion. Costs to the Plaintiffs' counsel is fixed at $750.00.

                             (Sgd.) "P. Rouleau"

                                 Judge

October 21, 1996

Vancouver, British Columbia