Employer not vicariously liable for wrongdoing of employee

By Stuart Rudner and Anique Dublin

In Ivic v. Lakovic, 2017 ONCA 44, the Ontario Court of Appeal unanimously ruled that the employer was not vicariously liable for an alleged sexual assault committed by one of its employees. The court held that the connection between the business of the employer, the duties of the employee and the alleged sexual assault was not sufficiently strong to justify imposing vicarious liability.

The evidence was that the appellant was intoxicated and feeling unwell at a late-night party, and her friend ordered her a taxi from United Taxi Transportation Service (United). A taxi was dispatched and arrived at the party to transport the appellant.

United had obtained the approval of the municipality before clearing the driver to operate its taxis. Clearance from the municipality normally required them to be satisfied that the driver had no criminal record, and there was no evidence that United had any reason to think the driver may have a propensity to commit sexual assault.    

The appellant alleged that she was sexually assaulted by the driver during the taxi ride. She subsequently brought a claim for damages against the driver, the owner and primary operator of the taxicab and United, arguing that United was vicariously liable for the acts of the driver.

Her claim against United was dismissed on summary judgment. The appellant appealed the decision to the Ontario Court of Appeal. The primary issue on appeal was whether United could be held liable for the sexual assault allegedly committed by one of its drivers, absent any fault on its part.

Court of Appeal

In dismissing the appeal, the Court relied on the principles set out in the Supreme Court of Canada decision in Bazley v. Curry [1999] 2 S.C.R. 534. This case established a set of principles to guide the courts in determining whether vicarious liability should be imposed.

The non-exhaustive list of factors are:

• The opportunity that the enterprise afforded the employee to abuse his or her power
• The extent to which the wrongful act may have furthered the employer’s aims (and hence be more likely to have been committed by the employee).
• The extent to which the wrongful act was related to friction, confrontation or intimacy inherent in the employer’s enterprise.
• The extent of power conferred on the employee in relation to the victim.
• The vulnerability of potential victims to the wrongful exercise of the employee’s power.

With regards to the first factor, the court agreed that the taxi driver had a form of power over the appellant. As a lone, intoxicated woman, she was in a very vulnerable position. The taxi driver also had full control to determine where the taxi would go and, in so doing, could create an opportunity for predatory behaviour.

However, the court concluded that the degree of opportunity, although “not negligible,” was not as great as that of the child caregiver in Bazley. The driver’s opportunity for misconduct in this case was not sufficiently connected to the function of being a taxi driver.

With regard to the second and third factors, the court held that the alleged sexual assault did not further United’s aims in any respect and there was no evidence the alleged sexual assault was related to any friction, confrontation or intimacy inherent to United’s aims. In fact, United’s Rules and Regulations provided that drivers were “not to touch any customer if possible” and should not ask any customer out for a date.

As to the fourth factor, the court held that United did not confer any power to the taxi driver in relation to the appellant. There was no evidence that United knew the passenger was a lone, intoxicated woman. United simply dispatched a driver to collect a passenger. The relationship between the driver and the appellant was supposed to be that of an adult driver and an adult fee-paying passenger. The court concluded that “Arguably, what power the driver had, he arrogated to himself through his conduct.”

The final factor is the vulnerability of the potential victims. This was an important factor in this case. As previously stated, it was late at night, the appellant was by herself, she was intoxicated and feeling unwell. The court agreed that she was clearly in a vulnerable position. However, the court concluded that the appellant was not just “prey” to taxi drivers and, in any event, the power that the taxi driver allegedly wrongfully exercised was not predicated on his employment.     

Consequently, the court dismissed the appeal. The court held that United did not “significantly” or “materially” increase the risk of the appellant being sexually assaulted by permitting the taxi driver to perform his duties. The court concluded that the alleged sexual assault was “only coincidentally linked to the business of the taxi company.”

The court also concluded that “fair compensation is not about ability to pay: It is not a “deep-pockets” rule.” Imposing vicarious liability on an employer that could not have done anything differently to prevent an assault by its employee would not serve the purpose of deterring sexual assaults, especially for those offenders who are not deterred by the possibility of a jail sentence.

Takeaways

The outcome of this case is bittersweet. On the one hand, it provides protection for employers against plaintiffs who include them in a lawsuit simply because of their ability to pay, regardless of blameworthiness.

Sadly, on the other hand, the outcome can be seen as another frustrating deficiency in remedies for victims of sexual assault, many of whom will continue to suffer the physical, emotional and psychological effects without a realistic ability to receive any damages for their suffering.   

Anique Dublin is a law clerk and office administrator at Rudner Law in Toronto.