“Operation” of Vehicle and the Per Quod Doctrine

By Micah Pirk O’Connell, Student-at-Law

In Faltas v. Macerollo, 2020 ONSC 1450, the defendants brought a summary judgment motion to dismiss the claims of the plaintiff, Mr. Faltas, and Royal Arts Pharmaceutical Inc., the company he worked for.

Facts

Mr. Faltas’ Lincoln was stopped in the outside lane of a four lane road when it was rear-ended by the defendant vehicle operated by Mr. Marcerollo. At the time of the accident, Mr. Faltas was an excluded driver under an OPCF 28A Excluded Driver endorsement.

It was not disputed that, prior to the accident, Mr. Faltas had been driving the Lincoln. However, at the time of the accident, the vehicle was stopped as it had broken down, and Mr. Faltas, along with his wife and son, were waiting for a tow truck.

Both Mr. and Ms. Faltas alleged injuries from the collision and sought damages. Royal Arts Pharmaceutical also claimed for general damages and, in the alternative, special damages for the loss of value of services from both Mr. and Ms. Faltas on the basis of “action per quod servitium amisit”. This legal doctrine dates back to medieval England and permits a person to recover damages from someone who injured their servant. Both Mr. and Ms. Faltas were officers, directors, and shareholders of the company in addition to being employees.

The defendants moved for summary judgment on the basis that Mr. Faltas was precluded from bringing an action as he was an excluded driver, and on the basis that a per quod action was no longer valid law.

Evidence

Affidavit evidence was provided by both parties. A lawyer from the defence counsel’s office was a deponent of an affidavit. The court expressed concern with lawyers providing affidavit evidence generally, but in particular on claims for substantial relief. Defence counsel’s evidence consisted of “inappropriate argument disguised as evidence”, and was at least partially incorrect.

There was a dispute regarding the Lincoln. Defence counsel asserted in his affidavit that the Lincoln had run out of gas and was stopped on the travelled portion of the roadway. The source of that information was not provided and the statement was inconsistent with evidence given by Mr. Faltas at discovery.

Mr. Faltas contended that the Lincoln broke down without warning, and that, after putting gas in the car, it still would not run, at which point the family called for roadside assistance. Mr. Faltas’ sworn affidavit stated that he was not operating the Lincoln at the time it was rear-ended.

These evidentiary disputes were significant as the case ultimately turned on the legislative language, namely the meaning of the term “operate” as applied to the facts.

Analysis

Because Mr. Faltas was an excluded driver under the policy, by virtue of the legislation, the vehicle would be deemed uninsured if he was operating it. The relevant legislation is section 267.6(1) of the Insurance Act and sections 1(3) and 2(1) of the Compulsory Automobile Insurance Act. The phrases “use or operation” and “operate” are not defined terms in either statute.

Absent a clear definition, the court looks to the common law and, in this case, to the criminal law to inform its decision. Section 253 of the Criminal Code of Canada, prior to an amendment in 2018, made reference to “…operates or has the care and control of a motor vehicle”. In order to determine what constitutes “care and control”, the court looked to the common law.

In R v. Ford [1982] S.C.R. 231 (S.C.C.), intention to drive was said not to be an essential element of the offence.

In R v. Decker, (2002) 162 C.C.C. (3d) 503 (Nfld. C.A.), the court found that mere custodial possession of a vehicle does not alone constitute care or control. There has to be a risk that the vehicle will be put in motion or that other danger is a possibility.

It is undisputed in this case that Mr. Faltas was driving the vehicle prior to the collision, and that he was not driving it at the time of the accident. Because the vehicle was not functioning, there was no risk of it being unintentionally put in motion by Mr. Faltas.

Courts have held that a towed vehicle is not “operational” while being towed to a parking lot, and that the act of towing does not constitute operation (see Ringer v. Cooper, [1995] O.J. No. 4886 (Sm. Cl. Ct.). Similarly, a vehicle parked on private property does not constitute “operation” (see Nuffield v. Bordieri, [1999] O.J. No. 3935 (S.C.J.).

The case most closely resembling the within facts is Williams v. Di-Carlo, [2006] O.J. 1415 (Div. Ct.). The panel was hearing an appeal from the dismissal of the defendant’s motion for summary judgment. The plaintiff had been driving an uninsured vehicle when it broke down. He got out of the vehicle to call for assistance when it was struck by the defendant’s vehicle.

The Divisional Court determined that there was a triable issue in this case because the vehicle was inoperable. Given the ambiguity of the law, the case required a full canvassing of the facts and law at trial.

In the case in issue, the court found that where the engine of the vehicle could not function, the vehicle is effectively disabled and incapable of being operated. Given the reference to “at the time of the incident” in section 267.6(1) of the Insurance Act, the relevant point in time is when the collision occurred.

Therefore, Mr. Faltas was not operating the vehicle at the time of the accident. This was found to be a triable issue, and the defendant’s plea for summary judgment was dismissed.

The Per Quod Argument

Defence counsel suggested in his affidavit that Royal Arts Pharmaceutical was a “shell company”, and led argument in the affidavit that per quod claims are an antiquated common law doctrine no longer constituting a valid cause of action.

Firstly, leading opinion in an affidavit is improper. Secondly, per quod claims do in fact constitute a valid cause of action. The decision of R. v. Buchinsky, [1983] 1 S.C.R. 481 (S.C.C.) provided the following:

The action per quod is born of the relationship of master and servant and though of very early origin, in my opinion still persists in the common law… the action recognizes the right in the master to recover damages as against a wrongdoer who has injured his servant and thus deprived the master of his services… the master’s right of action in such a case is dependent on the servant in turn having a valid cause of action against the wrongdoer.

In Fulcher v. Conklin, 2014 ONCA 710, the plaintiff suffered a spinal injury in a motor vehicle collision. He was a shareholder and employee of the corporate plaintiff; both sued. Damages were awarded to the corporate plaintiff on its per quod claim and the decision was upheld on appeal.

In this case, because Mr. and Ms. Faltas were shareholders and employees of the company, and the company hired replacement employees, it was held that there was an evidentiary basis to present the claim. With a triable issue before the court, summary judgment was again held to be inappropriate.

Conclusion

Whether or not a vehicle is being operated is a fact-driven analysis. It depends upon the individual circumstances in each case. Only the status of operation at the time of the accident is relevant. Use and operation are not the same thing, and courts will look to the common law to determine the appropriate analysis in each instance.

The doctrine of per quod servitium amisit¸ while antiquated, remains a valid cause of action in Canada. Damages will be measured based on the cost necessarily incurred by the master and includes the cost of medical and hospital expenses sustained on the servant’s behalf. The right of action of the master is dependent on the servant having a valid cause of action against the wrongdoer.