By overturning the Court of Appeal, the Supreme Court of Canada (SCC) in Rankin’s Garage & Sales v JJ, 2018 SCC 19 sent a strong reminder that the foreseeability of harm remains the critical limiting principle of the law of negligence. 

In this case, a minor plaintiff suffered catastrophic brain injuries following an accident in a stolen vehicle operated by an unlicensed, inexperienced, minor friend. The teens stole the vehicle from a local garage, Rankin’s Garage & Sales, after having consumed alcohol and marijuana. They intended to use the car to pick up a third friend in a nearby town. The garage serviced and sold cars and trucks. Its property was not secured. On arrival, the two teens found an unlocked vehicle with its keys inside. The accident later ensued.

At trial, the judge held that the garage owed a duty of care to the plaintiff. The jury apportioned 37% of responsibility for the plaintiff’s injuries to the garage. The Court of Appeal upheld the Trial Judge’s finding regarding the garage owing a duty of care to the plaintiff, explaining that it was reasonably foreseeable that minors might steal an unlocked car with keys in it from the unsecured garage. The Court of Appeal added that it was a “matter of common sense” that minors might then injure themselves while operating the vehicle. On this appeal to the SCC, the garage claimed that it owed no duty of care to the minors because it was not reasonably foreseeable that an individual would steal the car and use it in an unsafe manner, and illegal activity would negate the necessary proximity needed to establish a duty of care. The respondent argued the Anns/Cooper test for establishing a duty of care does not impose a high threshold, and common sense dictates that theft can occur by minors and may result in unsafe driving. The respondent also argued that the garage had a positive duty to guard against the risk of theft because of its storage of vehicles which are potentially harmful to minors, like alcohol or firearms.

The SCC disagreed. A seven-to-two majority overturned the Court of Appeal, finding that reasonable foreseeability was not established. The SCC strongly emphasized the importance of framing foreseeability inquiries with “sufficient analytical rigor”. It was not enough to simply determine whether the theft was foreseeable. What mattered was ensuring the analysis connected the garage’s failure to take care, by leaving vehicles unsecured, with the harm ultimately caused.  As reasonable foreseeability is an objective test, the SCC was clear that this test cannot be conducted with the benefit of hindsight. Courts must guard against allowing their analysis to be clouded by what in fact did happen.  The SCC explained evidence of a connection between the theft itself and the unsafe operation of the stolen vehicle was required, but here, it was not available. The majority also rejected the premise that foreseeable risk of injury automatically flows from a risk of theft.  While there was evidence relating to the practice of the garage leaving keys in the cars and a history of theft in the area which demonstrated a risk of theft, that same evidence did not suggest that a stolen vehicle would necessarily be operated in an unsafe manner. The SCC also found that the Court of Appeal erred in relying on assumption or speculation regarding the activities of minors, and instead should have required evidence that a stolen car might reasonably be expected to be stolen by minors and driven in a way that would cause personal injury. While the theft was foreseeable, the subsequent negligent operation of the stolen vehicle and the physical injury to a third party was not.

The majority also found there was no positive duty on the garage to act to prevent the theft. The duties existing between car storage and alcohol service providers or between vehicles and firearms were not analogous to the case at bar. The SCC explained that vehicles alone are not inherently dangerous the way guns and alcohol may be. Further, the fact that the plaintiff was a minor did not automatically create a positive duty.

Furthermore, the SCC explained Canadian law has been clear that without legislation modifying the common law, illegal or immoral conduct by a plaintiff does not preclude the existence of a duty of care outright. Thus, the fact that the plaintiff was involved in illegal activity did not automatically preclude a duty of care on the defendant if one could be found. 

The minority would have upheld the Trial Judge’s finding that the garage owed a duty of care to the plaintiff and would not have required further evidence connecting the risk of theft to the harm suffered. The minority would have held that reasonable foreseeability was a low threshold that would usually be satisfied where a plaintiff has suffered injury. Moreover, they premised their judgement on the lack of evidence that minors are less likely than other individuals to steal a car. They did not feel respondent should have been required to prove the likelihood of theft based on particular characteristics. To the minority, all that matters is whether the physical injury was reasonably foreseeable under any circumstance.

What the insurer should know

Rankin clarifies the previously murky law relating to whether a business owes a duty of care to someone who is injured following the theft of a vehicle from its premises. A business now clearly owes a duty of care to someone who is injured in a stolen vehicle from their premises, but only where the unsafe operation of the stolen vehicle was reasonably foreseeable in addition to the reasonable foreseeability of the theft. This means that to establish a duty of care, there must be some evidence to suggest that a person in the position of the defendant ought to have reasonably foreseen the risk of injury, not just the event from which it ultimately resulted. It may be prudent to require your insured business owners to take measures to mitigate the risk of theft, particularly if they are storing vehicles which are not roadworthy or require expertise to operate.

Shawn O’Connor, Kate Agyemang and Makena Korte Moore