Watson v. Southam Inc., 2000 CanLII 5758 (ON CA)

COURT OF APPEAL FOR ONTARIO

DATE: 20000707

DOCKET: C29196

ABELLA, GOUDGE and MacPHERSON JJ.A.

B E T W E E N : )

) Gary Kuzyk and

GEORGE WATSON and ) David A. Potts

JOHN GALLAGHER ) for the appellant Southam Inc.

)

Plaintiffs/ ) W. Graydon Sheppard

Respondents ) for the appellants

)

• and - ) John W. Findlay

) for the respondent Watson

SOUTHAM INC., carrying on business )

as the publisher and proprietor of ) Shane Watson

the HAMILTON SPECTATOR, KEN PETERS ) for the respondent Gallagher

ADRIAN HUMPHREYS, JIM POLING, )

JOHN G. DOHERTY, JAMES HALLIDAY, )

DAVID WILSON, REG WHYNOTT, )

LARRY WOLFE, DAVID DUNSTON, )

JENNIFER ROBERTS, ANNE MARIE )

BERRYMAN and DIANE KOZLOVIC- )

MROS and THE REGIONAL )

MUNICIPALITY OF HAMILTON- )

WENTWORTH ) Heard: April 3, 2000

)

Defendants/ )

Appellant )

)

)

On appeal from the judgment of Crane J. dated January 26, 1998.

ABELLA J.A.:

Overview

1In May, 1994, articles appeared in the Hamilton Spectator

about an incident which had taken place at the sewage treatment

plant owned and operated by the Regional Municipality of Hamilton-

Wentworth. The incident involved a verbal exchange between the

managers of the plant and three visitors: George Watson, John

Gallagher, and Geraldine Copps. The visitors were denied entry

to the plant but entered it eventually without permission. As a

result of the articles, the defendants, other than the Regional

Municipality of Hamilton-Wentworth, were given written notice by

George Watson and John Gallagher of an intended defamation action

on June 22 and June 23, 1994 in accordance with s. 5(1) of the

Libel and Slander Act. A statement of claim was issued on August

4, 1994. Geraldine Copps did not participate in the lawsuit.

2On June 10, 1995, the defendant Southam Inc., which owned

the Hamilton Spectator, published an apology about the 1994

articles. As a result, the action was discontinued against

Southam Inc. and the Hamilton Spectator.

3In May 1995, one year after the publication of the alleged

libel, Watson and Gallagher brought a motion to add the Regional

Municipality as a defendant. The Municipality was added as a

defendant after a hearing on June 20 and July 14, 1995. Leave to

appeal this decision was dismissed on July 25, 1995.

4The Municipality brought a motion for summary judgment on

June 2 and 3, 1997 requesting a dismissal of the libel action for

failure to comply with the notice provisions in s. 5(1) of the

Libel and Slander Act. The motion was abandoned on consent when

all parties agreed to have this issue dealt with at trial. At

the outset of the trial, the trial judge dismissed the

Municipality’s motion. He also struck the jury notice, despite a

motion by the defendants that there be a jury trial.

5The trial judge concluded that Watson and Gallagher had been

libelled by the defendants David Wilson, Jennifer Roberts, and

James Halliday. The Municipality was found to be vicariously

liable for Mr. Halliday, Ms. Roberts and Mr. Wilson, who were all

acting within the scope of their employment when they defamed the

respondents. Aggravated damages were also awarded against the

Municipality because of the conduct of its legal department.

6The damages awarded were the following:

To Mr. Gallagher:

Mr. Wilson and, through vicarious liability,

the Regional Municipality were jointly liable

for $20,000 in general damages.

Ms. Roberts and, through vicarious liability,

the Regional Municipality were jointly liable

for $10,000 in general damages.

Mr. Halliday and, through vicarious liability,

the Regional Municipality were jointly liable

for $10,000 in general damages.

The Regional Municipality was liable for $20,000

in general damages.

To Mr. Watson:

Mr. Wilson and, through vicarious liability,

the Regional Municipality were jointly liable

for $5,000 in general damages.

Ms. Roberts and, through vicarious liability,

the Regional Municipality were jointly liable

for $2,000 in general damages.

Mr. Halliday and, through vicarious liability,

the Regional Municipality were jointly liable

for $2,000 in general damages.

The Regional Municipality was liable for $10,000

in general damages.

Costs on a solicitor and client basis were

awarded against the Regional Municipality.

7The action was dismissed against the five remaining

defendants, but they were awarded no costs.

8The Municipality appealed the finding of liability, as did

Mr. Wilson, Ms. Roberts and Mr. Halliday. The defendants also

appealed the trial judge’s decision to strike their jury notice.

The five defendants against whom the action was dismissed sought

leave to appeal the order denying them costs. There was a cross-

appeal by Mr. Watson and Mr. Gallagher seeking substantially

higher damages.

BACKGROUND

Background

9On May 9, 1994, Geraldine Copps, a regional councillor and

member of the Environmental Services Committee of the Regional

Municipality of Hamilton-Wentworth, John Gallagher, a former

Hamilton alderman and regional councillor, and George Watson, a

former employee of the Woodward Avenue Treatment Facility and

former union representative to the plant’s health and safety

committee, visited the Municipality’s waste water treatment

plant. The purpose of the visit was to examine the plant to see

whether there was any truth to a report that a malfunction at the

plant had created a safety hazard. Ms. Copps and Mr. Gallagher,

in particular, were concerned that the plant was using unworkable

technology. They were, as a result, interested in seeing the

plant’s membrane filters.

10When the three visitors arrived at the administrative

building of the treatment facility, Ms. Copps introduced herself

to the receptionist, Anne Marie Berryman, who notified Larry

Wolfe, the plant manager, of their arrival. Mr. Wolfe in turn

telephoned his supervisor, James Halliday, who was the

environmental services senior director. He told Mr. Wolfe not to

permit the group to enter the plant.

11As a result, Mr. Wolfe told the visitors that they could not

tour the plant as neither he nor anyone else was available to

take them on a tour. The visitors were insistent, but Mr. Wolfe

claimed that there was a policy prohibiting unguided tours, a

claim whose veracity both Ms. Copps and Mr. Gallagher challenged.

Since there was in fact only a practice direction and no

definitive policy against unguided tours, Mr. Wolfe denied entry

to the visitors because they did not have the requisite hard hats

and ear plugs, safety equipment he refused to supply to them.

12Throughout these exchanges, Mr. Wolfe excused himself

several times to make telephone calls to Mr. Halliday, whose

consistent instructions were to deny access to the visitors. The

exchanges took place on the landing of the administrative

building. The conversations took place mainly between Mr.

Gallagher and Mr. Wolfe.

13After persistent refusals of entry, Ms. Copps led Mr.

Gallagher and Mr. Watson past the parking lot into the filter

building. Inside the building, she observed that filters were

disassembled and some plates were cracked. Mr. Wolfe entered the

building a few minutes later with David Dunston, a plant

supervisor. Mr. Wolfe called up to the visitors and told them

they would have to leave. Shortly thereafter, the visitors left.

14The receptionist, Ms. Berryman, and another staff member at

the plant, Diane Kozlovic-Mros, witnessed the original exchange

between the three visitors and Mr. Wolfe. Both described the

visitors as condescending and belligerent.

15Jennifer Roberts, a payroll clerk, was in the administrative

building during the exchanges. When she looked out the window,

she briefly saw the visitors with her manager, Mr. Wolfe. When

she walked into the reception area, she asked Ms. Berryman and

Ms. Kozlovic-Mros what was going on and who the man was who was

raising his cane as if to strike Mr. Wolfe. She repeated this

observation about the cane to her other supervisor, David

Dunston. She also wrote a letter setting out her response to the

incident, excerpts of which were later published in the Hamilton

Spectator.

16After the visit, Mr. Halliday told Mr. Wolfe to prepare a

fact sheet and a report outlining the events. Mr. Wolfe did so.

The essence of his memo was his unhappiness at being demeaned and

at having his authority ignored. He made no mention in his memo

of any form of assault or threat of physical violence.

17Ms. Berryman, Ms. Kozlovic-Mros, and Ms. Roberts

independently drafted letters that they sent to various people,

including regional councillors. All three letters contained the

same tone and complained of the anger at the “condescending

attitude” of the visitors, their belligerent attitude, and their

rudeness.

18On the day of the visit, Mr. Halliday called David Wilson, a

regional councillor, alderperson, and Chair of the Environmental

Services Committee to which Mr. Halliday reported. He told Mr.

Wilson that there had been an incident at the plant in the late

afternoon involving three visitors who had arrived unannounced

and demanded to see the presses. In the face of the manager’s

refusal to show them what they wanted to see, said Mr. Halliday,

the group became hostile, despite being told that they required

hard hats and ear plugs.

19At around 9:00 p.m. on the evening of the exchange at the

plant, Mr. Wilson went to the home of Ken Peters, a city reporter

for the Hamilton Spectator. He had never been to Mr. Peters’

home. He stated that his purpose in seeing Mr. Peters was to

relate a “serious incident and speak to him about covering the

Environmental Services Committee meeting scheduled for the

following day.”

20The next day, May 10, 1994, at its monthly meeting, this

committee carried a motion to establish a policy to regulate

access to all regional facilities by council members and

delegations. Mr. Wilson raised the May 9th incident, telling the

Committee that there were threats made to regional staff at the

plant by a councillor, a former councillor, and a former staff

person. The trial judge found that Mr. Wilson received

information from someone other than Mr. Halliday between the time

of the telephone conversation the previous evening and the time

of the meeting on May 10, 1994. Mr. Wilson made reference at the

meeting to possible criminal prosecution for assault or

threatened assault by Mr. Gallagher. Although the committee voted

for a factual investigation into the incident, the investigation

never took place.

21Mr. Gallagher and Mr. Watson brought defamation proceedings

against Mr. Wolfe, Mr. Dunston, Ms. Berryman, Ms. Kozlovic-Mros,

Ms. Roberts, Mr. Halliday, Mr. Wilson, Mr. Whynott, Southam Inc.,

and various individual journalists.

22The plaintiff Watson was a former employee of the regional

municipality and was retired. The plaintiff Gallagher was a

former elected member of the Municipality who was defeated in the

municipal election before the events in question. The defendants

Wilson and Whynott were elected members of the appellant’s

municipal council and Halliday, Wolfe, Dunston, Roberts, Berryman

and Kozlovic-Mros were employees of the Municipality.

23Mr. Wilson’s statements at the May 10th committee meeting

were recorded in two newspaper articles. They suggested that Mr.

Gallagher and, by association, Mr. Watson, were guilty of

criminal conduct. Since these statements were untrue, they were

found to be defamatory.

24Mr. Wilson and Ms. Copps were political rivals in the same

ward. The trial judge held that Mr. Wilson saw the incident as

an opportunity to discredit a political rival on a very

vulnerable political issue, namely, the safety hazards at the

plant. Mr. Wilson was also found to have a “deep antipathy” for

Mr. Gallagher.

25The trial judge concluded that the only purpose Mr. Wilson

had in visiting the journalist’s home on the night of May 9th was

to promote sensationalism, expose his political rivals, and

attempt to capitalize on a sensitive political issue. This

malicious motive removed the defence of qualified privilege and

Mr. Wilson was found liable for aggravated damages.

26Reginald Whynott, the regional chairperson and chief

executive officer met with Mr. Wilson and the Chief Financial

Officer of the Region before the May 10th committee meeting.

They informed him that an incident had taken place at the plant

on the previous day that included threats to and intimidation of

the municipal staff. Mr. Whynott commented about possible

criminal charges at the May 10th meeting. After the meeting, he

spoke with a reporter from the Spectator.

27On May 12th , 13th and 14th, 1994, the Hamilton Spectator

printed, respectively, an article, an editorial and then another

article about the May 9th incident. The May 12th article was

entitled “Sewage Plant Visit Raises Political Stink”. The

articles contained what the trial judge found to be untruths,

including that Mr. Gallagher assaulted or threatened to assault

Mr. Wolfe outside the administrative building of the plant and

that the Region’s legal department was looking into possible

criminal charges. As well, portions of the letter written by Ms.

Roberts appeared in the articles.

28In the May 14, 1994 article in the Hamilton Spectator, the

following statements appeared and were attributable to Ms.

Roberts:

Former Hamilton Councillor John Gallagher appeared

ready to strike a regional employee with his walking

cane during a visit to Hamilton-Wentworth’s main

wastewater treatment plant, another employee says.

Plant worker Jennifer Roberts said in a letter to

city council members she witnessed a Monday afternoon

confrontation at the Woodward Avenue plant between

plant manager Larry Wolfe and Hamilton Councillor

Geraldine Copps, Mr. Gallagher and plant retiree

George Watson.

‘I stopped for a moment in disbelief as I watched

one of the men raise his hand at my manager, Mr.

Larry Wolfe. In his hand was a walking cane;

naturally I was concerned.

‘These men were accompanied by a female who at this

time grasped the one male’s arm in a manner which

calmed him,’ Mrs. Roberts said in her letter, a

copy of which was obtained by the Spectator.

…

In a subsequent interview, Mrs. Roberts…said at the

time she had no idea who the visitors were.

‘I went to my supervisor, Dave Dunston, and said,

Who is that guy hitting Larry?’ she recalled.

Mrs. Roberts, who said she was about 31/2 metres

(12 feet) away from the foursome, said she had

“no doubt at all” that the man who raised his cane

in a threatening manner was Mr. Gallagher.

29These statements, particularly those made about Mr.

Gallagher, were found by the trial judge to be untrue and without

justification. Mr. Gallagher was the only person holding a cane.

The trial judge found that the cane never came off the ground,

that there was no screaming, no assaults, and no actual threats

of assault by any of the visitors towards Mr. Wolfe or any other

staff member.

30Although Ms. Roberts claimed that she was misquoted, she

made no public disclaimer because the Municipality’s Legal

Department’s advised all defendants not to make any statements.

However, by sending a letter to, among others, city councillors

without any indication of confidentiality, Ms. Roberts was found

to have intended to make a public statement. Moreover, in giving

an interview to the Spectator, Ms. Roberts was found to have

intended that her remarks would become public.

31In the May 12th article, the Spectator included this

reference to Mr. Halliday:

Mr. Halliday said both Mr. Gallagher and Mr. Watson

had walking canes with them and, while the canes

were not brandished in a threatening manner, both

employees felt ‘intimidated’ when the two male

visitors became agitated.

32In a subsequent article on May 14th, was the following

statement:

Jim Halliday, senior environmental services director,

said Mr. Wolfe and Mr. Dunston, have indicated they

want to pursue the possibility of laying criminal

charges in connection with the incident.

33These statements were not true in substance or in fact and

were found to be defamatory. Although Mr. Halliday, as

spokesperson for the plant, had qualified privilege, he was found

by the trial judge to have exceeded that privilege by making

these statements, knowing there was no evidence that either Mr.

Wolfe or Mr. Dunston had ever said anything about criminal

charges. The trial judge found that Mr. Halliday’s motive was to

embarrass and discredit the visitors and to “strike a blow for

management and staff at the waste water plant against interfering

local politicians.”

34Mr. Whynott was quoted in the May 12th article as saying the

following:

Mr. Whynott said that he will not tolerate any threats

being made to regional employees and called on senior

bureaucrats to advise the affected employees that ‘if

they want to take legal action, we will provide legal

assistance’.

35Because he gave an interview to the Spectator, the trial

judge found that he intended that his remarks be public. The

language was defamatory because it implied that there were

threats to regional employees sufficient to involve the police.

Nonetheless, the trial judge found that Mr. Whynott acted in good

faith. As Chair and CEO, he had a duty to give the interview and

he related what the trial judge found to be “a reasonable

repetition of the information which he received from Messrs.

Wilson and Halliday.”

36On October 18, 1994, municipal council approved funding for

legal counsel for its elected and employee defendants. On

December 20, 1994, the council passed an indemnification by-law

for those defendants. The indemnification was for acts or

omissions arising out the scope of their authority or employment

provided they “acted honestly and in good faith with a view to

the best interests of the Municipality”.

ANALYSIS

Analysis

37The statement of defence and jury notice were delivered on

October 11, 1994 on behalf of the elected and employee

defendants. In accordance with s. 108(2) of the Courts of

Justice Act and Rule 47.01 of the Rules of Civil Procedure,

issues of fact and the assessment of damages are to be tried

without a jury in respect of a claim against a municipality.

38Notwithstanding these provisions, the defendants sought a

jury trial. Their counsel argued that the trial could proceed

either with the jury being present for all of the evidence, or in

two stages, with the jury being absent for the evidence against

the municipal defendant but present for the evidence against the

remaining defendants. The proposal was that the jury determine

the questions of fact against other defendants, and that the

trial judge determine the questions of facts against the

municipal defendant.

39Following these submissions, in response to the trial

judge’s question, plaintiffs’ counsel moved to strike the jury

notice. Counsel for the defendants, other than the Municipality,

then asked that the trial against his clients be severed from the

trial from the municipal defendant. In response, the trial judge

struck the jury notice before any evidence was heard, on the

basis of the complexity and the proper conduct of the trial.

40I see no reason to interfere with the exercise of the trial

judge’s discretion in striking the jury notice. The Courts of

Justice Act prohibits a jury trial when a municipality is a

respondent. The issues raised against the Municipality and the

remaining defendants were so complex and inextricable, that it is

not difficult to understand why the trial judge was of the view

that a truncated trial would be inappropriate. The exercise of

his discretion reflects no error in principle.

Liability and Damages

41As for the appeals from the findings of liability, there

was, in my view, a sound evidentiary foundation to support the

findings of defamation the trial judge made against Ms. Roberts,

Mr. Halliday and Mr. Wilson. He gave careful reasons to justify

these findings and I see no basis for interfering with his

conclusions. Their appeal against the finding of liability is

therefore dismissed.

42I see no error in the trial judge’s assessment of damages

against these three defendants. There is no evidence or argument

before us to justify the submission that the quantum was too low.

The cross-appeal by Mr. Gallagher and Mr. Watson is therefore

also dismissed.

Notice under the Libel and Slander Act

43The remaining issue in this appeal is whether the plaintiffs

Mr. Gallagher and Mr. Watson complied with s. 5(1) of the Libel

and Slander Act in their action against the Municipality and, if

they did not, whether their failure to do so barred any claims

against it.

44The relevant sections of the Libel and Slander Act are ss.

5(1) and 6:

5(1) No action for libel in a newspaper or in a

broadcast lies unless the plaintiff has, within

six weeks after the alleged libel has come to

the plaintiff’s knowledge, given to the defendant

notice in writing, specifying the matter complained

of, which shall be served in the same manner as a

statement of claim or by delivering it to a grown-

up person at the chief office of the defendant.

(6) An action for libel in a newspaper or in a

broadcast shall be commenced within three months

after the libel has come to the knowledge of the

person defamed, but, where such an action is

brought within that period, the action may include

a claim for any other libel against the plaintiff

by the defendant in the same newspaper or the same

broadcasting station within a period of one year

before the commencement of the action.

45The trial judge’s reasons on the issue of any entitlement to

notice by the Municipality were the following:

I had, prior to trial, reserved a motion brought by

the Regional Municipality pursuant to section 5(1)

of the Libel and Slander Act, for an order dismissing

the plaintiffs’ action against the municipality. I

now dismiss this motion. Reasons for so doing are

essentially the adoption of the WRITTEN SUBMISSIONS

RE: APPLICATION OF LIBEL AND SLANDER ACT, filed by

plaintiffs’ counsel.

46The Municipality argued that the plaintiffs did not give the

requisite notice under s. 5(1) of the Libel and Slander Act and

that this failure resulted in prejudice, depriving the

Municipality of the opportunity to issue an apology or

retraction.

47The plaintiffs, on the other hand, argued that the

Municipality had sufficient notice “from the evidence proving or

establishing certain facts” and suffered no prejudice because it

clearly had knowledge of the action.

48They argued that there was no requirement of formal or

independent notice since notice to the employees was notice to

the employer, particularly the notice to Mr. Whynott, the

Regional Chairperson.

49The Municipality responded that the evidence disclosed that

Mr. Whynott was sued in his personal, not his representative

capacity. Moreover, although it had knowledge of the defamation

action, the Municipality had no notice that a claim was going to

be made against it in a separate capacity.

50The failure to provide notice has been held to constitute an

absolute bar to a defamation action. See Stuarts Furniture &

Appliances v. No Frills Appliances & T.V. Ltd. (1982), 40 O.R.

(2d) 52; Elliott v. Freisen (1982), 1982 2179 (ON SC), 37 O.R. (2d) 409; aff’d

(1984), 1984 1922 (ON CA), 45 O.R. (2d) 285 (C.A.); Greenpeace Foundation of Canada

v. Toronto Sun Publishing Corp. (1989), 1989 4061 (ON SC), 69 O.R. (2d) 427;

Merling v. Southam (2000), 2000 5621 (ON CA), 128 O.A.C. 261; Misir v. Toronto

Start Newspapers Ltd. (1997), 1997 717 (ON CA), 105 O.A.C. 270; Grossman v. CFTO-

TV Ltd. (1982), 1982 1768 (ON CA), 39 O.R. (2d) 498 (C.A.), leave to appeal to

Supreme Court of Canada refused January 25, 1983; Frisina v.

Southam Press (1980), 1980 1749 (ON SC), 30 O.R. (2d) 65; aff’d (1981), 33 O.R.

(2d) 287 (C.A.).

51The respondents argue, however, that there appears to be

some dispute whether the requirement to give notice in s. 5(1)

applies to non-publisher or non-media defendants. In Knowles v.

20th Century Publishing Co. Ltd., 1939 651 (ON SC), [1939] O.W.N. 403 (H.C.J.), for

example, Godfrey J. held at p. 404 that: “all defendants are

entitled to notice when the libel is contained in a newspaper”.

52Cory J.A. in Grossman, at p. 501, seemed to suggest that the

notice requirement is meant only for publishers, when he said:

The purpose of the notice is to call the attention

of the publishers to the alleged libellous matter.

When it is received an investigation can be made,

and if the publisher deems it appropriate, a

correction, retraction or apology can be published.

In this way the publisher can avoid or reduce the

damages payable for the publication of a libellous

statement.

But in Grossman there were only media defendants, leaving this

case as a doubtful precedent for the conclusion that only media

defendants are entitled to notice.

53I see no principled basis for excluding any defendant from

the benefit of the notice provision in s. 5(1) of the Libel and

Slander Act. The purpose of the notice requirement is to give a

defendant an independent opportunity to issue a retraction,

correction, withdrawal or apology for allegedly defamatory

statements, thereby mitigating potential damages. Whether the

defendant is a media defendant appears to me to be irrelevant.

The opportunity to mitigate damages should be available to all

defendants.

54Even as a potentially vicariously liable defendant, the

Municipality was entitled to the same statutory protection as any

other defendant, and was entitled to notice on its own behalf.

No such notice was given. Since the failure to provide notice in

a timely manner is an absolute bar, the claim against the

Municipality should be dismissed.

55The respondents argue, in the alternative, that notice was

in fact given in a timely manner, based on when they learned the

information that induced them to add the Municipality as a

defendant. There is no doubt that the discoverability rule

applies to s. 5(1). See, for example, Misir. The six-week

period for giving notice does not commence until the alleged

libel has come to the plaintiff’s attention.

56That information was only learned, the respondents

submitted, during Ms. Roberts’ discoveries in December 1994, when

Ms. Roberts denied having made a number of statements attributed

to her in the Hamilton Spectator articles and the plaintiffs

realized that the Municipality suppressed the fact that Ms.

Roberts was misquoted.

57Yet it was almost six months after these discoveries, in May

1995, that Mr. Watson and Mr. Gallagher filed motion materials

seeking to join the Regional Municipality of Hamilton-Wentworth

as a defendant, well beyond the time limits in ss.5(1) and (6).

58Mr. Gallagher acknowledged that he knew in December 1994

that the Municipality might be liable, yet no action was brought

against it until May 1995.

59And, on his own discovery, Mr. Gallagher admitted that at

the time the notice letters were delivered and the statement of

claim was issued in August 1994, he knew that:

(a) the Appellant was a distinct entity from

the elected and employee Defendants;

(b) he was at liberty to put the Appellant on

notice of the alleged libels;

(c) he was at liberty to sue the Appellant in

the Statement of Claim;

(d) he had reason to include a claim against

the Appellant, but chose not to do so; and

(e) the Municipality had failed to do a number

of things he considered important in vindicating

him.

60In addition, Mr. Gallagher’s affidavit in support of the

motion to add the Municipality as a defendant conceded that he

had not previously named the Municipality, not because he had no

relevant knowledge, but because he intended to run for municipal

office in the November 1994 election.

61He admitted at trial that he made statements attributed to

him in a newspaper article dated July 7, 1994, confirming that

the action was not against the appellant but against some of its

employees.

62In either case, however, whether the defining date is May

1994 or December 1994, the limitation period had long expired by

the time the Municipality was added as a defendant. And while

the limitation period does not start to run until the relevant

information is known by a plaintiff, there is no authority to

extend the limitation period itself.

Disposition

63The appeal by the Municipality is therefore allowed, and the

order against it set aside.

Costs

64As to costs, two factors are determinative: a) the

respondents have emerged from this appeal with a large part of

their judgment intact; and (b) there is an indemnity agreement

between the Municipality and the appellants.

65The trial judge ordered that costs of the trial be paid by

the Municipality to the respondents, Mr. Gallagher and Mr.

Watson, on a solicitor and client basis. Because the appeal by

the Municipality has been allowed, the respondents can no longer

recover their costs directly from it. However, the respondents

should not lose the costs benefit of their success. I would

therefore award no costs of the trial or of the appeal to the

Municipality.

66Similarly, since the respondents succeeded against the

appellants Mr. Wilson, Mr. Halliday and Ms. Roberts, they are

entitled to their trial costs from them in addition to their

costs of the appeal, particularly given that those appellants are

being indemnified by the Municipality. In my view, however,

these costs should be on a party and party basis.

67The five defendants against whom the action was dismissed

are being indemnified by the Municipality. In these

circumstances, the order denying them costs should not be

disturbed. Leave to appeal costs is accordingly granted, but the

appeal is dismissed.

68The cross-appeal by Mr. Watson and Mr. Gallagher is

dismissed without costs.