Alberta ‘master and servant’ case sent back to lower court

Canada (Attorney General) v. Livingstone, 2004 CarswellAlta 893, 2004 ABCA 236 (Alta. C.A.)

RCMP officer Brian Wallace was injured in a motor vehicle accident owned and operated by the Livingstones. He sued them for general and specific damages; and his employer commenced a separate lawsuit for recovery of the medical expenses and sick wages it had paid out to Wallace.

The Livingstones challenged the RCMP’s right to do so, arguing it is based on an archaic view that an employer has an ownership stake in an employee just as it does in a piece of machinery. In addition they said the RCMP’s claim was for issues of related economic loss rather than for something clearly tangible such as damaged property.

The court ruled the RCMP’s lawsuit can proceed, as seven provinces have not specifically abolished the doctrine of per quod servitium amisit (whereby one lost the benefit of the other’s service.) The RCMP was seeking damages that was specific enough, ruled the court. And while Wallace had not suffered damages, his employer had as it had to pay Wallace without getting the benefit of his work, it held. (CELT previously highlighted this novel case in “Case in Point.” See CELT #408, March 3, 2004, pages 3190-3191.)

The ruling was appealed and the Alberta Court of Appeal set aside the previous judgment because the lower court had not considered the decision in Cooper v. Hobart, which is the most recent and definitive word on recovering economic loss. The case was never brought to the attention of the chambers judge who thus never applied the correct test to determine economic proximity.

The judge also needed to consider policy issues, the court ruled, which it could not do because a proper evidentiary foundation was not put before him. “The issue is novel and important and we think it should be decided on proper evidence and argument, and application of correct legal principles,” said the court. “It is in the interest of justice… that this matter be sent back to the Court of Queen’s Bench for reconsideration.”

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