Donleavy v. Ultramar Ltd., 2019 ONCA 687

The respondents rented their home to another couple in January 2008. Six months later, a fuel tank located outside of the home failed and spilled its contents. The tank was manufactured for indoor use only and had been on the property since before the respondents purchased it. The appellant Ultramar supplied fuel to the tank pursuant to a supply contract. Prior to entering into the contract, Ultramar was required to inspect the tank to determine if it complied with the applicable regulatory regime. The inspection was subcontracted to the appellant Kilpatrick Fuels, as were follow up inspections. Ultramar received the inspection reports and noted no issues. The spill was ultimately caused by corrosion from the inside of the tank due to water that had accumulated in the bottom. The respondents commenced an action in tort and for breach of contract against the fuel providers and inspectors. The trial judge dismissed the breach of contract allegation and apportioned tort liability 60% against Ultramar and 40% against the respondents for their contributory negligence. Ultramar was granted judgment in its crossclaim against Kilpatrick for one half of the amount it owed to the respondents. In her reasons, the trial judge stated that she applied the material contribution test for causation. The Court of Appeal upheld the lower court’s result but found that the trial judge misinterpreted the leading case on causation (Clements) and what is meant by the “but for” and “material contribution” tests for causation. The “but for” test is generally applied in establishing causation in tort negligent and applies even where a defendant’s negligence is not the sole cause of the plaintiff’s injury. The “material contribution” test is an alternative and exceptional basis on which legal causation can be established. It eliminates the need to establish factual causation, and is only appropriate where the plaintiff is unable to show that any one of multiple tortfeasors was a “but for” cause of injury, but can show that the defendant’s conduct materially contributed to the risk of injury. The appropriate test in the circumstances was “but for”. While the trial judge decided to apply the material contribution test, her findings of fact evidence that she actually applied the but for test.