Hobin v Enterprise Rent-A-Car Canada Company, 2017 ABQB 670

Court of Queen’s Bench of Alberta Citation: Hobin v Enterprise Rent-A-Car Canada Company, 2017 ABQB 670 Date: 20171103 Docket: 1403 03639 Registry: Edmonton Between: Shaun Patrick Hobin and Jennifer Lynn Hobin Plaintiffs/Respondents - and - Enterprise Rent-A-Car Canada Company/ La Compagnie de location d’autos Enterprise Canada and John Doe Defendant/Applicant _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice J.H. Goss _______________________________________________________ I Introduction [ 1 ] This is an application to decide the following issue in advance of others under Rule 7.1(1) (

a) of the Alberta Rules of Court , Alta Reg 124/2010 on the basis of a Statement of Agreed Facts: Whether the Plaintiffs’ damages should be reduced for any amounts received by them from the Workers’ Compensation Board (WCB) pursuant to s. 187 of the Traffic Safety Act, RSA 2000, c T-6 ( TSA ). II Statement of Agreed Facts

[ 2 ] This action arises out of a motor vehicle accident on March 22, 2012. At the time of the accident, the plaintiff, Mr. Hobin, was a “worker” pursuant to s. 22 of the Workers’ Compensation Act , RSA 2000, c W-15 ( WCA ). The at-fault driver, Mr. Shaw, was operating a 2012 Chevrolet Tahoe owned by Enterprise Rent-A-Car Canada Company (Enterprise). Mr. Shaw was a “worker” as defined by s. 23 of the WCA . His employer was an “employer” as defined in the WCA .

Section 23 of the WCA prevents Mr. Hobin from advancing a claim against either Mr. Shaw or his employer. Enterprise was a “renter” as defined in s. 187(0.1)(c.1) of the TSA . [ 3 ] As a result of the accident, Mr. Hobin was injured. He has received compensation payments pursuant to the WCA including medical aid, rehabilitation costs, and special damages (the Benefits).

III Legislation [ 4 ] The TSA provides in part: s. 187(2.1) Notwithstanding any other provision in this Division except subsections (5) and (6), in an action for the recovery of loss or damage sustained by a person by reason of a motor vehicle on a highway, the maximum amount for which a lender, lessor, renter or seller of the motor vehicle is liable in respect of the same incident in its capacity as a lender, lessor, renter or seller of the motor vehicle is the amount determined under subsection (4) less any amounts that (

a) are recovered for loss or damage under the third party liability provisions of contracts evidenced by a motor vehicle liability policy issued to a person other than a lender, lessor, renter or seller, (

b) are in respect of the use or operation of the motor vehicle, and (

c) are in respect of the same incident. [ 5 ] The WCA provides in part: s. 1.1 The Insurance Act does not apply to the Board in respect of the provision of workers’ compensation coverage to persons under this Act and, to avoid any doubt, nothing in

section 570 of the Insurance Act affects the application of this Act. s. 22(

l) In this

section and

section 22.1, (c) “compensation costs” means the present and future costs, as determined by the Board, of all benefits paid or payable to or on behalf of a claimant under this Act including without limitation, all di sability, medical aid and vocational rehabilitation benefits. ...

(5) Where an action vests in the Board under subsection (3), (

a) the Board (

i) may bring the action in the name of the claimant for the entire value of the action including, without limitation, all compensation costs, (ii) has the same right to recover any amounts in the action that the claimant would have been entitled to recover, including the compensation costs as if the claimant had been required to pay the compensation costs ... …

(11) All proceeds of settlement or judgment resulting from an action, including any costs and disbursements recovered, shall be paid to the Board or its designate and shall be distributed in the following order: ... (

f) payment of any compensation costs; (

g) payment of the balance, if any, to the claimant. IV Parties’ Positions A Applicant [ 6 ] The Applicant notes that although this is a “worker v worker” scenario, Enterprise is vicariously liable as owner of the vehicle driven by Mr. Shaw. The question to be determined is whether Enterprise’s potential liability to the Respondents is reduced by the Benefits paid in relation to Mr. Hobin by WCB. [ 7 ] The Applicant argues that the list in s. 187(2.1) of the TSA is properly interpreted in a disjunctive fashion, such that each item received serves to reduce a renter’s liability.

The Applicant observes that the TSA was amended in 2009, the amendments being proclaimed in force on March 1, 2011. The Miscellaneous Provisions Amendment Regulation , AR 120/2001 ( Regulation ) was passed at the same time and came into force on March 1, 2011. The Applicant submits that the TSA was amended to cap the liability of renters. The intent behind the provisions is that any third party liability policies carried by a renter are no longer first loss unless the rentee does

not have access to any other form of motor vehicle liability insurance. [8] The Applicant refers to Bulletin 01-2010 issued by the Superintendent of Insurance, which indicates that in 2009 the TSAwas amended to cap liability of vehicle rental companies when their vehicles are operated by rentees, while the Insurance Act, RSA2000, c I-3 was amended to provide regulation making authority to change the priority of payment among motor vehicle liability policieswith respect to damages caused by the operator of a leased or rented vehicle.

The amendments would change the priority of which motorvehicle liability policy is responsible for the payment of damages caused by the operation of these vehicles. [9] According to the Applicant, s. 187(2.1) should be interpreted to reduce a renter’s liability by: (

a) amounts paid under third party liability by another motor vehicle liability insurer; (

b) amounts received in respect of the use or operation of the motor vehicle (i.e.

Section B benefits); and (

c) amounts in respect of the same incident (i.e. disability benefits, WCB benefits, etc.). [10] The Applicant takes the position that the use of the word “and” in s. 187(2.1) is not determinative as it is ambiguous in that itcan be interpreted as connoting a joint list or a joint and several list. [11] The Applicant argues that a conjunctive

interpretation of this

section would result in only third party liability paymentsreducing a renter’s liability which does not reflect the intention of the legislature. A conjunctive

interpretation offers no new reduction inliability as renters have always been able to deduct payments made towards the same damage by other third parties on the basis thatdouble recovery is not permitted. Such an

interpretation would be contrary to the principles that the legislature avoids meaningless wordsand does not speak in vain. [12] The Applicant notes that a conjunctive

interpretation of this

section renders s. 2.1(

b) and (

c) redundant or meaningless as allmotor vehicle liability policies require use and operation to trigger third party liability coverage and benefits obviously have to arise outof the same accident to be deducted. [13] The Applicant draws a parallel with the reasoning in Austin v Omand, 2002 ABQB 415, [2002] AJ No 790. In that case, theCourt concluded that the sub-clauses (

a) and (b), separated by the word “and” in s. 181 of the Highway Traffic Act, RSA 2000, c H-8,were to be read disjunctively. [14] The Applicant also relies on the SEF44 Endorsement as precedent for deducting WCB benefits from the potential liability of aparty obligated to respond to a motor vehicle accident injury claim. The SEF44 Endorsement illustrates that a payee of last resort standsbehind the WCB in terms of payment. The Applicant argues that is the status of a renter subsequent to the amendments to the TSA.

If thelegislature had intended otherwise, it could have included wording similar to s. 1.1 of the WCA which specifically precludes the Benefitsfrom being deducted by an insurer responding to a motor vehicle accident claim pursuant to s. 570 of the Insurance Act. B Respondents [15] The Respondents argue that the three items listed in

section s. 187(2.1) are to be read conjunctively, as subsections (

b) and (c)are clearly meant to qualify (

a) and limit the scope of what renters can deduct. They submit that the Applicant’s proposed

interpretationwould produce absurd consequences as it would permit renters to deduct amounts that have not been recovered and amounts recoveredfrom sources other than third party liability motor vehicle insurance policies. Further, it would allow renters to deduct amounts that arenot necessarily connected to the same incident. [16] The Respondents submit that Austin is distinguishable in that it addressed an entirely distinct provision, and the

interpretationchosen by the Court was consistent with the past judicial

interpretation of s. 181 and ensured that public policy goals were met. TheRespondents note that there is no judicial history of s. 187(2.1) of the TSA having received a disjunctive

interpretation. [17] As for the SEF44 Endorsement, the Respondents rely on Boisjoli v Zurich Insurance Co, (2000) (ABKB), 264 AR 382, [2000] AJ No 612 at paras 18-19 (QB) in which the Court held that any restrictions on payment contained in clause4(b)(viii) should be construed strictly against the insurer and any ambiguity resolved in favour of the plaintiff. The Court did not permitthe deduction of WCB benefits, as the plaintiff was obliged to reimburse the WCB for the benefits and therefore there was no doublerecovery. The Respondents submit that the same approach applies here. The WCA requires Mr.

Hobin to reimburse the WCB forbenefits paid on his behalf from the proceeds of any settlement or judgment. If WCB benefits are deducted from any amounts awarded toMr. Hobin, he would still be required to reimburse the WCB from the remaining settlement funds under s. 22(11) of the WCA. If theApplicant’s

interpretation is accepted, Mr. Hobin’s recovery would be reduced twice: once under s. 187(2.1) of the TSA and again unders. 22(11)(

f) of the WCA. [18] Finally, the Respondents submit that the intent of WCA is clear. WCB benefits are not to be deducted from a motor vehicleaccident injury claim, regardless of who owns the vehicle. V Law [19]

Section 10 of the

Interpretation Act, RSA 2000, c I-8, directs that an enactment shall be construed as being remedial, and shallbe given the fair, large and liberal construction and

interpretation that best ensures the attainment of its objects. The Supreme Court ofCanada has confirmed that statutory

interpretation cannot be founded on the wording of the legislation alone. The words of

an Act mustbe read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of theAct, and the intention of Parliament. The legislature does not intend to produce absurd, ridiculous or frivolous consequences orconsequences that are extremely unreasonable or inequitable, illogical or incoherent, or incompatible with other provisions or with the

object of the legislative enactment or that defeat the purpose of a statute or render some aspect of it pointless or futile: Rizzo & RizzoShoes Ltd, Re, (SCC), [1998] 1 SCR 27, [1998] SCJ No 2 at paras 21 and 27. [20] In McDonald v McDonald, 1998 ABCA 241, [1998] AJ No 802 at paras 24-27, the Court held that the context of anenactment includes the legal environment of the provision, the other provisions of the statute and related statutes, the circumstanceswhich led to the enactment, the aim and purpose of the legislature, the legislator’s value system and linguistic habits. [21] This Court noted in Continental Stress Relieving Services Ltd v Stang (1991) 115 AR 90, [1991] AJ No 191 (QB) that courtsshould not expand or extend the social policy formulations of the legislature.

As outlined by Master Smart in 1597130 Alberta Ltd vCondominium Corp No 1023241, 2016 ABQB 195, [2016] AJ No 315 at para 16, there are also a number of presumptions that applywhen interpreting any statute:

(1) The legislature is a competent and careful user of language and skillful crafter;

(2) Legislatures use simple, straightforward and concise language;

(3) The legislature avoids superfluous or meaningless words and does not repeat itself or speak in vain; and

(4) The legislature uses language carefully and consistently so that the same words have the same meaning and different words havedifferent meanings. [22] The use of the word “and” between clauses should generally be read conjunctively, but this

interpretation is not mandatory.Moshansky J. in Austin at paras 48-50 cited R Sullivan, Statutory

Interpretation (Irwin Law: Concord, Ontario, 1997) and S Edgar,Craies on Statute Law, 7th ed (Sweet & Maxwell: London, 1971). According to those authorities, the word “and” is always conjunctivein the sense that it signals the cumulation of the possibilities listed before and after it. However, “and” is ambiguous in that it may beintended to mean either joint or joint and several. In the case of a joint “and,” every listed possibility is necessarily included. In the casewhere “and” is joint and several, all the possibilities may, but need not, be included.

The determination of which meaning is appropriatedepends on the context. Where “and” is used before the final item in a list of powers, for example, it is normally joint and several. Inmost legislation, “and” is joint rather than joint and several. Where the idea of “and/or” is intended, typically the inclusive “or” is used.The legal and the grammatical meaning of a statute must be determined. Where the grammatical construction is clear, then thatconstruction should be employed unless there is some strong reason to the contrary such that the apparent grammatical constructioncannot be the true one.

VI Analysis [23] The issue before the Court is whether Enterprise’s liability is reduced by the Benefits paid by the WCB in relation to Mr.Hobin. This turns on the

interpretation of s. 187(2.1) of the TSA. [24] Prior to March 1, 2011, s. 187 did not contain subsection (0.1) which sets out the

definitions of “lessor.” Further, s. 187(3),which is now replaced by s. 187(2.1) to (8), simply provided: 187(3) Notwithstanding subsections (1) and (2), nothing in this

section relieves any person who is deemed to be the agent or employeeof the owner and to be driving the motor vehicle in the course of that person’s employment from liability for the loss or damage. [25] At the first and second readings of Bill 30 Traffic Safety Amendment Act, 2009, the amendment in question was described ascapping vicarious liability of vehicle rental companies, adding vehicle rental companies to the list of businesses whose vicarious liabilitywas to be capped under the proclamation of the 2007 Traffic Safety Amendment Act: Alberta, Legislative Assembly, Hansard, 27th Leg,2nd Sess, No 15 (March 16, 2009) at 401 and No 27 (April 21, 2009) at 736 (Wayne Drysdale).

This is not particularly helpful indetermining the issue before the Court, as it is clear on the face of the amendment that it is intended to cap liability of vehicle rentalcompanies and neither of the proposed

interpretations would be contrary to that purpose. [26] As well, the decision in Austin is not particularly helpful. In Austin, Moshansky J. interpreted s. 181 of the TSA to be readdisjunctively, notwithstanding the use of the word “and,” both to ensure public policy goals were fully met and because the

section hadbeen judicially interpreted disjunctively by numerous courts in the past. Furthermore, the legislature, in making other amendments to theAct, had not changed the wording of s. 181 to ensure that it is read conjunctively. The Court found that this supported the continueddisjunctive reading of s. 181. This is not the circumstance in the case at bar. [27] In my view, the proper

interpretation of the provisions in question is informed by the larger legislative context. The operationof s. 187(2.1), if interpreted disjunctively as suggested by the Applicant, would reduce a renter’s liability by the Benefits paid to or onbehalf of a claimant under the WCA. Such Benefits are defined as “compensation costs” in the WCA. Section 22(11) provides for theorder of distribution of all the proceeds of settlement or judgment resulting from an action that are paid to the WCB. Those proceedswould be lowered or reduced by the Benefits deducted. Section 22(11)(

f) provides that payment of any compensation costs (or theBenefits) is to be in priority to payment of the balance, if any, to the claimant. In this manner, the Benefits can be deducted twice fromthe balance of all proceeds of settlement or judgment available to the claimant.

In my view, there is nothing to suggest that this outcomewas intended by the legislature in enacting s. 187(2.1) and indeed it would appear to be unduly punitive to claimants. [28] The amendments to the Insurance Act and the TSA which came into force on March 1, 2011 changed the priority in terms ofwhich motor vehicle liability policy is responsible for the payment of damages caused by the operation of these vehicles, such thatinsurers of persons renting or leasing vehicles became the first loss payors in responding to a claim, prior to looking to the insurer of thelender, lessor, renter or seller of the motor vehicle covering the same peril.

The amendments also capped the vicarious liability of ownersof leased, rented, conditionally sold or financed vehicles to a $1 million limit when their vehicles are operated by a lessee, rentee, buyeror other driver. An exemption exists where there was a non-arm’s length relationship with the day-to-day operator of the vehicle.

[ 29 ] The amendments to s. 187(2.1) address the priority of insurance; I am not satisfied that the intent of the

section was to do more than this. Specifically, I am not satisfied that the intent of the

section was to add additional reductions in liability available to lenders, lessors, renters or sellers beyond the deduction of payments made under third party liability by another motor vehicle liability insurer. This

interpretation coincides with the ordinary grammatical use of the conjunctive “and.” Had the legislature sought to specifically reduce liability in the way suggested by the Applicant, it would not have been difficult to draft the provision so as to make this clear. [ 30 ] This conclusion is bolstered by the difficulties posed by the alternative proposed

interpretation. Clearly, for benefits to be deducted, they must always arise out of the same incident. Furthermore, all motor vehicle liability policies require use and operation to trigger third party liability coverage in all cases. Such qualifications may state the obvious, but the provisions are absurd and ridiculous standing on their own. [ 31 ] The

interpretation proposed by the Applicant would allow lenders, lessors, renters or sellers to deduct amounts in respect of the use or operation of the motor vehicle and/or amounts in respect of the same incident, without qualification. Such an overly broad opportunity to reduce liability could not have been intended. The only rational and logical

interpretation of section 187 (2.1) is that the three items noted in s. 187(2.1) are to be read conjunctively, as a joint list, consistent with the grammatical construction of the provision. VII Conclusion [ 32 ] The application is dismissed. VIII Costs [ 33 ] The Respondents are entitled to costs of this application. Heard on the 31 st day of October, 2017. Dated at the City of Edmonton, Alberta, this 2nd day of November, 2017. J.H. Goss J.C.Q.B.A. Appearances: Damian Shepherd Chomicki Baril Mah LLP for the Defendant/Applicant

Nazrina H. Umarji Workers’ Compensation Board Legal Services Department for the WCB