Ralph Hanke made a terrible mistake on Jan. 8, 1995, while resurfacing an ice rink in Edmonton, Alberta. On that day he filled the gas tank of his Zamboni-like machine with hot water. The gas tank on the machine, which was made by Resurfice Corp., is next to the water tank. The hot water caused the gas in the tank to evaporate and drift toward an overhead heater. The vapor ignited in a massive explosion, scorching 90 percent of Hanke's body.

Soon after Hanke filed a negligence claim against Resurfice. Relying on the “but for” test to determine causation, the trial court denied his claim. Under the “but for” test a plaintiff must prove the injury wouldn't have occurred but for the negligent conduct of the defendant.

The appeals court, however, decided to use the “material contribution” test to determine causation. Under this test, a plaintiff need only show the conduct of the defendant “materially increased the risk of the injury occurring.” In late 2005 the court determined Resurfice materially contributed to the cause of Hanke's injuries and sent the case back for a retrial.

Finally in February 2007, the case came before Canada's Supreme Court. In an unusually brief decision, the Court supported the trial court's use of the “but for” test.

In doing so, it cleared up a legal quagmire that had plagued Canadian courts for more than a decade–which test to apply to determine causation in a negligence claim. The ruling came as a relief to corporate defendants, who had struggled to clear themselves under the material contribution test.

“It's not intended to be a pro-defendant judgment, but it will certainly come as some comfort to companies facing tort actions,” says Jamal Mahmud, partner with Osler, Hoskin & Harcourt in Toronto.

Judicial Confusion

The Supreme Court's decision in Resurfice Corp. v. Hanke was a long-time coming for those in the defense bar. Since 1996 courts throughout Canada have been confused about which test to use to determine causation. Many experts blame that confusion on the Supreme Court's 1996 decision in Athey v. Leonati, which muddied the waters of causation.

The plaintiff in that case had been involved in multiple car accidents and suffered back pain as a result. The question before the court was which of the accidents caused the injury. The case ended up before the Supreme Court, which modified the “but for” test to take into account the fact that multiple car accidents potentially caused the injury. The justices applied the material contribution test to determine the degree to which each defendant contributed to the plaintiff's injuries.

“After this case there were suddenly all these judgments that said, 'We don't know if this was the only cause, but it materially contributed,'” says Susan Wortzman, partner at Lerners in Toronto. “So there were all kinds of courts finding liability where they previously had not found that before.”

In fact from 1996 to 2007, Canadian courts relied on the decision in Athey 149 times, including some at the appellate level. Oftentimes these cases misapplied the material contribution test, forcing defendants to appeal in hopes an appellate court would apply the “but for” test.

That's what happened in 2004 when the Ontario Court of Appeal used the “but for” test to correct a trial court decision. In this case, Cottrelle v. Gerrard, the plaintiff was a diabetic who sued her physician. The plaintiff had gone to see her doctor after developing a sore on her foot. The physician did not examine her, but instead referred her to a skin specialist. Soon after, the sore became infected and doctors amputated her leg.

Despite evidence the amputation was inevitable, the trial court, which used the material contribution test, found in favor of the plaintiff. It deemed that because the physician didn't examine the foot, he significantly contributed to its infection. However, on appeal, the court applied the “but for” test and corrected the lower court's mistake.

Supreme Guidance

The Supreme Court was well aware of the lower courts' confusion. That's why Chief Justice Beverley McLachlin decided to use Resurfice to set the record straight. In her decision, she wrote, “Much judicial and academic ink has been spilled over the proper test for causation in cases of negligence. ?? 1/2 [T]he basic test for determining causation remains the 'but for' test.”

Such unequivocal clarity does not set a new precedent in Canadian law. But it does provide guidance to all the courts throughout the country, ensuring that cases such as Cottrelle and others like it will be anomalies of the past.

“Athey was really creating some considerable difficulty, and that's why the Supreme Court decided to step in and say something,” says Daniel Hagg, partner at Bryan & Company and counsel for Resurfice. “Now with the court's decision, the 'but for' test will almost invariably be the test to prove causation except in very isolated circumstances.”

The Court laid out two rare exceptions in which the material contribution test may still apply. One is when multiple parties may have caused an injury and it is impossible to determine which source caused it. The Supreme Court cited a scenario in which two people carelessly fire guns at a person who is hit by one of the shots, and it is impossible to determine which attacker's bullet struck the victim.

The other situation in which the material contribution test applies is when it is impossible to prove what another person in the causal chain would have done had the defendant not committed the negligent act.

“Both exceptions are quite limited,” Wortzman says. “They only apply when there's no way for the plaintiffs to prove their claims because they just don't know which of the defendant's actions caused the injury, but it's clear that one of them was the cause.”

Defendant Friendly

Because the “but for” test often makes it more difficult for plaintiffs to prove causation, many experts see the ruling in Resurfice as a win for corporate defendants.

“This ruling marks a return to a principled approach to tort analysis,” Hagg says. “For any kind of company, the outcome of this decision means tort liability is less likely to be imposed post-Resurfice than it was prior.”

But others see some remaining ambiguities in Canada's tort law that lower courts will have to sort out in the future.

“This case doesn't really clarify the law,” says Gordon McKee, partner at Blake, Cassels & Graydon. “It affirms that the 'but for' test is the basic test in Canadian law and that the material contribution test is only available in exceptional circumstances, but beyond that, what material contribution means is still a matter of confusion.”

Sorting that out will have to wait for another day. For now, in-house counsel can rest a little easier knowing that plaintiffs face a higher burden to prove causation than in the past.

“By clarifying the law, this ruling raises the bar,” Mahmud says. “As plaintiffs' counsel, you aren't going to be able to slip in material contribution.”