The King v. Snell et al.

APPEAL by the Crown from the judgment of the Honourable Mr. Justice Sidney Smith, Deputy Judge of the Exchequer Court of Canada (1), in favour of the suppliants against the Crown (in right of the Dominion of Canada) for damages.

The action was brought (by petition of right) for damages by reason of the death through accident of Bertram Snell who was, at the time of the accident, working in the course of his employment as a servant of one Dines, in the province of British Columbia. The accident was caused by negligence of a member of the Canadian military forces while acting within the scope of his duties or employment. The action was brought on behalf of the widow of the deceased and her infant son, under the the judgment of the Exchequer Court in McArthur v. The King (1), where it was decided that a member of the Non-Permanent Active Militia of Canada on active service was not an officer or servant of the Crown within section 19(c) of the Exchequer Court Act, and it is not now necessary to do so as section 50A of that Act, as enacted by chapter 25 of the Statutes of 1943, provides:

For another reason the date, June 24, 1938, is of importance, as it was then that chapter 28 of the statutes of that year was assented to, by which section 19(c) was repealed and re-enacted but with the omission of the words "on any public work" at the end thereof.

It has been authoritatively determined that section 19(c) not only conferred jurisdiction upon the Exchequer Court to adjudicate the classes of claims described but also that in such cases liability is imposed upon the Crown to respond in damages for the negligence of its officers or servants where, in like circumstances, such a liability would rest upon a subject corporation or individual according to the law of the province in which the claim arose as that law existed at the time when the Exchequer Court Act began to operate: Canadian National Railway Co. v. Saint John Motor Line Limited (1).

Prior to June 24, 1938, even if Neufeld were an officer or servant of the Crown, a petition of right for such an occurrence as the one here in question could not have succeeded, since the negligence was not committed during Neufeld's presence on a public work: The King v. Dubois (2); The King v. Moscovitz (3). June 24, 1938, must, therefore, be taken as the date as of which the question must be determined whether in like circumstances a liability would rest upon a subject. At that time there was in force in British Columbia the Families' Compensation Act, R.S.B.C. 1936, chapter 93, whereby an action for damages for the death of Snell might be brought against the wrongdoer by and in the name of the widow for the benefit of herself and infant son. There was also in force the Workmen's Compensation Act, R.S.B.C. 1936, chapter 312.

A petition of right was accordingly brought against the Crown by the widow for damages for Snell's death. The accident having happened in such circumstances as entitled a workman's dependent to an action against some person other than the workman's employer, and the widow having claimed under the Workmen's Compensation Act, the Workmen's Compensation Board of British Columbia established thereby is, by virtue of subsection 3 of section 11, "subrogated to the rights of the workman or dependent as against such other person for the whole or any out- Ke-i standing part of the claim of the workman or dependent against such other person." The Board also took an equitable assignment in writing from the widow. The Board was joined as a co-suppliant, not as a necessary party,since the claim is that of the widow on behalf of herself and her infant son-but as a proper party.

The dispute of the claim is founded upon the facts that the widow had a right to claim compensation under the provisions of the Workmen's Compensation Act although she might choose not to exercise it; that. she did make such a claim; that the Board ordered that certain monthly sums be paid to her for herself and for the son; and that these sums have been and are being paid. Although it is doubtful if the point is open on the pleadings, it was also argued that even if these circumstances did not defeat the present claim, the compensation awarded under the Workmen's Compensation Act should lessen pro tanto the sum awarded by the trial judge. If the appellant's arguments were sound, they would apply as well between subjects as between the Crown and subject. It is well settled that it is only pecuniary loss for which compensation is to be paid under Lord Campbell's Act and legislation similar thereto, such as the British Columbia Families' Compensation Act, and that any pecuniary advantage a dependent has received from the death must be set off against her probable loss. In Grand Trunk Ry. Co. v. Jennings the Privy Council decided, in an action under the Ontario Fatal Accidents Act as it then stood, that while the total amount of a life insurance policy need not as a matter of law be deducted from what would otherwise be payable as the pecuniary loss contemplated by the Act, the receipt of the insurance money was a proper circumstance to be taken into consideration. This has since been changed by statute in Ontario but not in British Columbia. In litigation between subjects, an action by the dependent of a workman whose death was caused by a third party would not be defeated by reason merely of the dependent's right to claim corn- .

pensation under the Workmen's Compensation Act. If the J dependent had claimed compensation, the Board, by sub- K Jsection 3 of section 11, would have been "subrogated to the rights of the workman or dependent as against such other person for the whole or any outstanding part of the claim of the workman or dependent against such other person." It is not necessary to determine precisely to what the words "or any outstanding part" refer, but I am satisfied that they would not apply so as to reduce the claim of the dependent against a subject wrongdoer. The Board is subrogated to the dependent's rights against the third party and the Board's rights would not be defeated or curtailed by anything done by the dependent. That is, as between subjects, it seems clear that the wrongdoer could not successfully contend that the legislature intended that the receipt by a dependent of compensation under the Workmen's Compensation Act should be deducted from the sum otherwise payable under the Families' Compensation Act. If that were so, the subrogation of the Board to the dependent's rights would be illusory. Liability to the same extent attaches to the Crown.

Mrs. Snell is therefore entitled on behalf of herself and her infant son to damages. No question was raised as to the amounts allowed by the trial judge and nothing is said, therefore, as to the manner of their compilation. The petition of right being carried on at the instance of the Board, even if it were not a party, the judgment would still be in favour of the widow and infant. As between the Board and the widow and her son, the former is entitled to the amounts awarded and I think there is ample power in the Exchequer Court to direct, as has been done in this case, that the damages suffered by the widow should be payable to the Board, and that the damages suffered by the infant should be paid into Court for the benefit of all the suppliants to abide the order of the Court, with liberty to the Board to apply for a declaration that it is entitled by subrogation to the same sum and to payment out to the Board thereof.

The appeal should be dismissed with costs.

J.-The late husband of the respondent, Bessie May Snell, was killed in a collision between a truck driven Esy by himself, in the course of his employment, and an army vehicle driven by a soldier. Mrs. Snell applied for and received compensation under the Workmen's Compensation Act, R.S.B.C. 1936, c. 312.

This action is brought by the Workmen's Compensation Board of British Columbia and Mrs. Snell against the Crown in the right of the Dominion. The Board pleads an equitable assignment from Mrs. Snell to it and its right to subrogation under section 11(3) of the Workmen's Compensation Act.

The pleadings admit that the late Mr. Snell's death was caused by the negligence of the driver of the army vehicle and therefore that Mrs. Snell had an action against the Crown in the right of the Dominion by virtue of her position under the Families' Compensation Act, R.S.B.C. 1936, c. 93, and her consequent rights under section 19(c) and section 50A of the Exchequer Court Act, R.S.C. 1927, e. 34, as amended 1938 S.C., c. 28, and 1943 S.C., c. 25. The Crown, however, contends that so far as Mrs. Snell is concerned, having received compensation under the Workmen's Compensation Act, she has either suffered no pecuniary loss, or alternatively has been fully compensated therefor and therefore has no cause of action, or in the further alternative that she is entitled to only the difference between what she has been awarded under the Workmen's Compensation Act and what may be found to be full compensation.

So far as the Workmen's Compensation Board is concerned, the Crown sets up a number of defences which may be summarized thus: that the Board suffered no pecuniary damage; the assignment is ineffective as against the Crown; and section 11(3) of the Workmen's Compensation Act does not give any remedy to the Board against the Crown in the right of the Dominion.

An examination of Mrs. Snell's position under the provincial Workmen's Compensation Act and under the sections of the Exchequer Court Act already referred to indicates that she had both a claim under the provincial Act and under the Exchequer Court Act. The contention here is that, having exercised her right and having accepted compensation under provincial legislation, that election e Jon her part has barred her right to recover from the Crown in the right of the Dominion, if not completely, then to the extent that she has recovered compensation under that Act.

The position of one who elects under the Workmen's Compensation Act of Ontario was determined by this Court in Toronto Railway Company v. Hutton (1), where Mr. Justice Duff (later Chief Justice) stated at p. 421: And at p. 422:

The material provisions of the Workmen's Compensation Act of British Columbia here under consideration are to the same effect as those of the Ontario Act in Toronto Railway Company v. Hutton, supra. It follows, therefore, that the position of the party whose negligence caused the injury is unaffected by the provisions of the Workmen's Compensation Act.

The compensation under the statute is in no way a settlement of Mrs. Snell's claim for damages arising out of the negligence of the appellant. The basis for the compensation under the statute, that of "injury by accident arising out of and in the course of employment", is a much wider and different basis from that of a claim founded in negligence. A computation of the claim is also, as set out in the statute, quite different from that which would be followed in a negligence action. Moreover, the Workmen's Compensation Act provides in effect that the claim of Mrs. Snell at common law for damages continues and may be enforced. It therefore follows that the contention of the Crown that whatever damages Mrs. Snell may have suffered have been recovered and because thereof she has no further claim, is not tenable.

The statute does provide that, in the event of the party entitled to compensation accepting same, the Board is J. subrogated to or stands in the position of the party receiving compensation as against the party whose negligence caused the action. These are matters entirely between the party entitled to compensation and the Board. In this case both of these are parties to the action. It therefore becomes unnecessary to determine certain of the issues raised had the action been brought in the name of the Board only. Both were parties to the action as framed and tried in the Exchequer Court. There the learned trial judge in his judgment directed how the funds received should be dealt with as between the Board, Mrs. Snell and her infant son. If the appeal otherwise failed, this disposition of the funds was not objected to.

The appeal should be dismissed and the judgment of the Exchequer Court affirmed.

J.-In this case, the Dominion Crown, liable for the tort of its servant, claims a deduction from damages recoverable by the widow and child under the Families' Compensation Act of British Columbia, of the sums payable to them under the Workmen's Compensation Act. The contention is that the death statute is intended merely to maintain to the dependents the benefits they would have received if death had not ensued the accident, and that there must be taken into account all benefits that arise to them by reason of the death.

There is no doubt a distinction has been established between the effect on damages of such benefits in the case of injuries not causing death and those that result fatally. In Bradburn v. Great Western Ry. Co. (1), the court excluded evidence of moneys received under a policy of accident insurance, on the ground concisely stated by Pigott, B. in these words:

A different rule in death cases was first applied by Lord THE KiNG Campbell in Hicks v. Newport, etc., Ry. Co. (1), where he directed the jury to deduct from the aggregate sum found the amount of accident insurance 'accruing to the persons Rand J.

claiming. In Grand Trunk Ry. Co. v. Jennings (2), a further distinction was recognized between life and accident insurance, and it was held that the former should be regarded only to the extent that its payment may have been accelerated. This seems to rest on the view that the benefit of the accident insurance was a legal consequence of the act of the wrongdoer, that as death might never happen from accident, the act brought about, in a legal sense, not only the loss but the mitigation; but that in an insurance against death alone, only time separates the beneficiary from the benefit. The ruling as to accident insurance has been superseded, however, by an amendment to the English Act passed in 1908.

The question, then, is whether the rule applies to such a right as that to compensation under the Workmen's Act, and in my opinion it does not.

Section 11 of that Act is as follows:

(1) Where an accident happens to a workman in the course of his employment in such circumstances as entitle him or his dependents to an action against some person other than his employer, the workman or his dependents, if entitled to compensation under this Part, may claim such compensation or may bring such action.

(2) If the workman or his dependents bring such action and less is recovered and collected than the amount of the compensation to which the workman or dependents would be entitled under this Part, the workman or dependents shall be entitled to compensation under this Part to the extent of the amount of the difference.

(3) If any such workman or dependent makes an application to the Board claiming compensation under this Part, the Board shall be subrogated to the rights of the workman or dependent as against such other person for the whole or any outstanding part of the claim of the workman or dependent against such other person.

(4) In any case within the provisions of subsection neither the workman nor his dependents nor the employer of the workman shall have any right of action in respect of the accident against an employer in any industry within the scope of this Part; and in any such case where it appears to the satisfaction of the Board that a workman of an employer in any class is injured owing to the negligence of an employer or of the workman of an employer in another class within the scope of this Part, the Board may direct that the compensation awarded in such case shall be charged against the last-mentioned class. (1) (1857) Reported in a note in 4 B. & S. 403.

(2) (1888) 13 App. Cas. 800.

It will be seen that the section deals specifically with the right of dependents under the Families'. Act so as to create in effect a quasi indemnity and to subrogate the . Board to the rights of the dependents when they have accepted compensation. But it is obvious that if such J. moneys can be deducted from the amount recoverable on the tort, the subrogation would be nullified. It would in fact reverse the plain purpose of the section and place upon the compensation fund pro tanto a primary liability. In the result, the Board at most would be entitled only to the excess of the claim against the wrongdoer over the compensation, the portion which equitably belongs to the dependents. The intention is clearly to preserve in full the cause of action, including damages, against the wrongdoer and to create a legal right in the Board to enforce it in the name of the dependents for the benefit of the compensation fund. Now the insurances held deductible were absolute in obligation; but the section, by importing that quality of indemnity, invests the right to compensation with a character outside of the category of benefits within the rule.

The Board is a co-petitioner and the judgment provides for the payment to it of the moneys recovered for the benefit of the widow. In the case of the child, the direction is to pay the sum recovered into Court with liberty to the Board to apply for a declaration of interest.

The effect of the statutory subrogation, a matter solely between the dependent and the Board, is to constitute the dependent a trustee of the right of action for the Board. The petitioners -are, therefore, trustee and cestui que trust. Whether or not that relationship raises in the Board an equitable right against the Crown, I do not find necessary to decide. The defence in this respect alleges simply that the Workman's Act is not applicable to the Crown, and that the Board "can acquire no right of action against the respondent by subrogation under the said Act", which I take to mean can create no legal right and to deny the competency of provincial legislation to affect a claim against the Crown given by a Dominion Act. But that leaves untouched the question whether the Crown is bound to recognize the beneficial ownership of such a claim. There is no doubt that many petitions of right have been presented and determined in chancery without challenge to the jurisdiction of the court to entertain them. The consideration that the remedies used by equity to enforce its .

decrees could not, by their nature, operate against the Crown is not present in a relation which permits the coercion of the court to be exercised upon a private person. The question is examined in chapter 11 of Clode on Petition of Right, where the instances in which petitions have been actually dealt with are enumerated. In an analogous case, In re Rolt (1), the petitioners were the assignees of a bankrupt contractor with the Crown, and I see no ground in principle why an interest of this nature should not be admitted against the Crown where it can be made effectual by a remedy operating upon the trustee: The Queen v. Smith (2), Strong J., at p. 66:

Its convenience is obvious; to the Crown, the result is indifferent; it conforms to the equitable rule of concluding all features of a controversy in the one proceeding; and it secures the interest of a semi-public body.

I would, therefore, dismiss the appeal with costs. J.-The contention of the Crown is that the dependents of the deceased, being entitled to compensation under the Workmen's Compensation Act, have no right of action under section 19(c) of the Exchequer Court Act, and alternatively, have no claim except to the extent that the amount awarded under the Compensation Act has not fully compensated them in respect of their claim under the Families' Compensation Act. It is further submitted in any event that the respondent Board has no claim at all under section 19(c) and that the Workmen's Compensation Act is ineffective to give it any.

It is, of course, well settled that the damage awarded under statutes of the nature of the Families' Compensation THE KIN Act are limited to the pecuniary benefit which the dependents might reasonably have expected from the con- tinuance of the life of the deceased. By reason of the Kenock J. provisions of section 19(c), the Crown becomes liable to pay such damages when the death has been caused in circumstances such as are here admittedly present.

Turning to the Workmen's Compensation Act, section

11 is as follows:

(1) Where an accident happens to a workman in the course of his employment in such circumstances as entitle him or his dependents to an action against some person other than his employer, the workman or his dependents, if entitled to compensation under this Part, may claim such compensation or may bring such action.

(2) If the workman or his dependents bring such action and less is recovered and collected than the amount of the compensation to which the workman or dependents would be entitled under this Part, the workman or dependents shall be entitled to compensation under this Part to the extent of the amount of the difference.

(3) If any such workman or dependent makes an application to the Board claiming compensation under this Part, the Board shall be subrogated to the rights of the workman or dependent as against such other person for the whole or any outstanding part of the claim of the workman or dependent against such other person.

It is the submission of the Crown that the compensation provided by the above section is full compensation equivalent by the law of the province to the pecuniary value of the support the widow and her son would have received from the deceased and that consequently no loss has been sustained. The Crown further says that if the award is not by law full compensation, the Crown is liable only for any deficiency. The contention in effect is that the provision by way of Workmen's Compensation operates in ease of the tort-feasor. The Crown further says that section 11(3) canot confer any right upon the respondents as against the Crown.

It is said in answer by the respondents that while it is true that provincial legislation may not bind the Crown in the right of the Dominion ex proprio vigore, nonetheless the Crown may not take the benefit of the provisions entitling the dependents to compensation without reference to the terms upon which compensation is awarded, namely, the statutory subrogation of the Board to the rights of the dependents as against the wrong-doer.

I do not find it necessary to pass upon the soundness of this contention, as I think the respondents are entitled to succeed upon the basis of their further contention, namely, that the relevant sections of the Workmen's Compensation Act are to be construed as affecting inter se the rights of the dependents and the Board only; Toronto Railway Company v. Hutton (4); and has no effect upon the liability of the Crown under section 19(c) to the person injured or his dependents.

In Workmen's Compensation Board v. Canadian Pacific Railway Co. (5), it was held that the rights given by section 8 of the then Act, 6 Geo. V, Cap. 77, constituted a statutory contract made with the workman for his benefit and for the benefit of members of his family dependent upon him. I think the principle of this decision is not limited to a case within section 8 where the accident happens outside the province, but applies equally to cases in which the accident takes place within the province. The relevant provisions of the statute here in question, R.S.B.C., cap. 312, are not materially different from the Act of 1916. Hutton's case (6) was decided under the Ontario statute of which the corresponding provisions are not in essence dissimilar from those of the British Columbia statute. It was held in that case that an election to claim compensation under the Act did not bar the claim of the injured workman against the tort-feasor. In the language of Mignault J., with whom the Chief Justice and Brodeur J. agreed, at p. 426, the subrogation effected by the statute "gives the

Board the control of the action", but does not divest the right of action from the workman or his dependents. The main contention of the appellant, therefore, in my opinion, fails.

The formal judgment directs recovery by both the Board and Bessie May Snell, payment to be made to the Board. It is objected that:

(a) the. provincial legislation is incompetent to give the Board any right of action in its own name against appellant, and that,

(b) the assignment by Bessie May Snell to the Board is equally ineffective, as the right of action is ex delicto and therefore not the subject of assignment.

Mignault J., in dealing with a similar contention in Hutton's case (1), said at pp. 427-428:

In the present case, as in Hutton's case (1), the essential ground of the appeal and of the defence to the action was that the election of the respondent Snell to claim compensation barred the action. In my opinion, what happens with respect to the proceeds of the judgment as between the respondents in view of the discharge involved in payment, is a matter which, at this stage of the action, does not concern the appellant.

I would dismiss the appeal with costs.

Appeal dismissed with costs.