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WORKERS’ COMPENSATION - Legislation - Interpretation

Monday, July 26, 2021 @ 9:23 AM  

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Action by Ivanovic for damages for breach of statutory, contractual, fiduciary and other duties owed to him. Ivanovic suffered serious injuries when he was assaulted during his part-time employment delivering pizza on September 4, 2005. He was delivering a pizza to a residence in an area known as Black Bear Crossing. That area housed a collection of former Army Barrick residences which now formed part of the Tsuu T'ina Nation Reserve. Ivanovic’s “accident” was reported to the Workers’ Compensation Board (the Board) by his employer, and Ivanovic received workers’ compensation benefits totalling $16,898. The Board subsequently opted to bring an action in Ivanovic’s name against the persons liable for his losses. The Board sought to recover the cost of the compensation it had paid. The Board represented to Ivanovic that the action would be conducted by its in-house lawyers in the mutual interest of the Board and Ivanovic. The defendant Howell was a senior lawyer employed by the Board. The defendant Kay was an articling student. They were responsible for the action and for drafting the statement of claim (the original action). Howell and Kay decided to name three individuals involved in the incident as defendants. They refused Ivanovic’s request to include the Tsuu T'ina Nation (the Nation) and Her Majesty the Queen in Right of Canada, whom Ivanovic believed might bear liability for his injuries and damages suffered under the Occupiers’ Liability Act (OLA). Howell and Kay did not consider or offer Ivanovic the option to pursue the original action at his own risk and expense. Judgment for compensatory damages of $898,465 was ultimately obtained against two of the individual defendants named in the original action. They had been noted in default and were impecunious. As a result, no money had been recovered. Ivanovic claimed that but for the alleged breaches of duty, he would have pursued claims against, and recovered compensation from, the Nation or Canada. He therefore asked that the defendants in this action be held liable for his losses. The defendants denied that they owed duties to Ivanovic as he alleged. They also submitted that even if a breach of duty was established, Ivanovic had not proved that he suffered any loss.

HELD: Action allowed in part. While s. 22 of the Workers’ Compensation Act gave the Board considerable control over any action taken against a third party, it did not eliminate the worker’s right of, or interest in, an action taken. The Board did not own the action and when, through Howell and Kay, it represented that it did, the Board overstated its jurisdiction. The Board’s position had the effect of excluding entirely one of the statutory options then available to reasonably protect both the worker and the Board. It essentially eliminated Ivanovic’s right of action, at least against the Nation and Canada, something it was not entitled to do. The Board’s conduct was markedly inconsistent with the relevant legislative context. The Board breached the legislative and contractual duty it owed to Ivanovic. A solicitor-client relationship existed, and duties were owed by Howell and Kay to both the Board and Ivanovic. Howell and Kay negligently breached the contractual duties and the concurrent common law duty of care they owed to Ivanovic. Ivanovic lost the opportunity to pursue his claim against the Nation and Canada, which he otherwise would have pursued. Canada would not have been an occupier as defined by the OLA at the material time. Therefore, Ivanovic could not have proved that Canada owed him the duty of care alleged either under the OLA or the common law. However, at the relevant time, the Nation was an occupier as defined in the OLA. That said, Ivanovic failed to demonstrate any likelihood that better lighting could have prevented the assault. The evidence therefore failed to establish that Ivanovic had a real chance of success in the original action. The damages caused by the defendants’ breaches of duty were nominal. The defendants agreed that a nominal damage award of $1,000 was consistent with recent authority.

Ivanovic v. Howell, [2021] A.J. No. 815, Alberta Court of Queen's Bench, A. Kirker J., June 4, 2021. Digest No. TLD-July262021001