COURT OF APPEAL FOR ONTARIO
CITATION: Laughlin v. Esmaeili, 2016 ONCA 826
DATE: 20161107
DOCKET: C61111
Hoy A.C.J.O., Benotto and Huscroft JJ.A.
BETWEEN
Julia Laughlin and Edward Kennis
Plaintiffs
and
Manouchehr Esmaeili also known as Manouchehr Esmaeiliaghabagher and Soheila Babaei, The Corporation of the Town of Markham, The Corporation of the City of Toronto, John Doe and Aviva Canada Inc.
Defendants (Respondent/Appellant)
Danette C. Cashman, for the Defendant (Respondent in Motion/Appellant), the Corporation of the City of Toronto
David Boghosian, for the Defendant (Applicant in Motion/Respondent in Appeal), the Corporation of the Town of Markham
Heard: October 3, 2016
On appeal from the judgment of Justice Mark L. Edwards of the Superior Court of Justice, dated September 3, 2015, with reasons reported at 2015 ONSC 5490, and from his costs order, dated January 29, 2016, with reasons reported at 2016 ONSC 750.
BY THE COURT:
[1] The plaintiff’s vehicle struck a concrete curbstone that had somehow made its way into the curb lane of Steeles Avenue East.
[2] Under s. 44(1) of the Municipal Act, 2001, S.O. 2001, c. 25, the municipality that has jurisdiction over a highway is required to keep it in “a state of repair that is reasonable in the circumstances, including the character and location of the highway”. Steeles Avenue is the border between the appellant, the City of Toronto, and the respondent, the Town of Markham, and the plaintiff sued both Toronto and Markham. Toronto then cross-claimed against Markham, alleging that Markham caused or contributed to the plaintiff’s injuries.
[3] The motion judge granted summary judgment in favour of Markham, dismissing both the plaintiff’s claim and Toronto’s cross-claim against it. He found that the curbstone that the plaintiff struck emanated from a portion of the grassy boulevard beside the north side of Steeles Avenue over which Toronto had exclusive jurisdiction and that Markham therefore was not liable to the plaintiff. He further concluded that Markham – which had responsibility for the nearby sidewalk and conducted periodic inspections of it and sometimes of the adjacent boulevard – did not owe a duty of care to Toronto to notify it of any and all potential problem areas.
[4] The motion judge fixed Markham’s costs of the action and the summary judgment motion in the amount of $51,903.97, inclusive of HST and disbursements. While the motion judge dismissed the plaintiff’s claim against Markham and acknowledged that there had been no finding of liability against Toronto, he noted that it was beyond dispute that the plaintiff was the unfortunate victim of striking a concrete curbstone in the middle of a roadway. He concluded that it was “just and fair in all of the circumstances of this case” that Toronto alone be responsible for Markham’s costs and characterized that order as a “Sanderson order”.
[5] Toronto appeals the motion judge’s dismissal of its cross-claim against Markham. It also seeks leave to appeal the motion judge’s costs disposition.
The issues on appeal
[6] Toronto advances four arguments:
The motion judge should not have granted summary judgment because the plaintiff’s claim against it is proceeding to trial. It says there will necessarily be a duplication of proceedings and there is a possibility of inconsistent findings.
The motion judge made a finding of fact – namely, that the curbstone was a hazard that Toronto had an obligation to remove – that should have been left to the trial judge.
The motion judge erred in concluding that Toronto had exclusive jurisdiction over the portion of the grassy boulevard from which the curbstone emanated; that Markham accordingly was not liable to the plaintiff; and that Markham did not owe the plaintiff or Toronto a duty of care or, at a minimum, he should have concluded that these were genuine issues requiring a trial.
The motion judge erred in making a Sanderson order, requiring it to pay all of Markham’s costs, when there had been no finding of liability against it.
[7] We address these arguments in turn.
Analysis
Issues 1 and 2
[8] We are not persuaded that there will be a duplication of proceedings or that there is a risk of inconsistent findings, such that it was not in the interest of justice that summary judgment be granted.
[9] With the release of Markham from the litigation, the trial will be focussed on whether Toronto breached s. 44(1) of the Municipal Act and, if so, on the quantum of damages suffered by the plaintiff. The trial judge will not need to consider whether Markham caused or contributed to the plaintiff’s injuries.
[10] The motion judge was clear that “no one knows how the curb stone [sic] found its way from the grassy boulevard to the travelled roadway on Steeles Avenue”. Toronto does not appear to take issue with the motion judge’s finding that the curbstone emanated from the grassy boulevard beside Steeles Avenue. Toronto’s arguments that there is a risk of inconsistent findings and that the motion judge made a finding that he should have left to the trial judge arise out of what the motion judge wrote at para. 23:
The hazard in question, i.e. the curbstone, was located on property over which Toronto had exclusive jurisdiction and, as such, in my view Toronto had the obligation to remove the curbstone or at least deal with it in such a way that it could not become a hazard. Toronto had the obligation under section 44 of the Municipal Act to keep the roadway in a state of repair that was reasonable in the circumstances.
[11] However, the motion judge added this, at para. 24:
Whether the City of Toronto on the facts of this case met its duty of care is not for this court to ultimately determine. The only issue that this court has to determine is whether Markham had any responsibility with respect to the curbstone...
[12] There is no dispute that at the time of the accident the curbstone was in the curb lane of Steeles Avenue East and that Toronto had an obligation under s. 44 of the Municipal Act to keep the roadway in a state of repair that was reasonable in the circumstances. To the extent that the motion judge might be argued to have said more than this at para. 23, the issue is not res judicata. The motion judge was clear that he made no binding determination of whether or not Toronto breached its obligation under s. 44. Therefore, there is no risk of an inconsistent finding at trial.
Issue 3
[13] We are not persuaded that there is any basis for this court to interfere with the motion judge’s conclusion that Toronto had exclusive jurisdiction over the portion of the grassy boulevard beside Steeles Avenue from which he found that the curbstone emanated and that Markham accordingly was not liable to the plaintiff. Further, we agree with the motion judge that Markham did not owe Toronto a duty of care in relation to the boulevard arising out of its periodic inspections of the sidewalks and the boulevard. And we are not persuaded that the motion judge erred by failing to conclude that these were genuine issues requiring a trial.
Exclusive jurisdiction
[14] In its statement of defence and cross-claim, Toronto admitted that it has jurisdiction over the Steeles Avenue East roadway.
[15] We agree with the motion judge that, pursuant to an agreement dated April 8, 1974 (the “1974 agreement”) Toronto assumed jurisdiction over the portion of Steeles Avenue where the accident occurred. We reject Toronto’s argument that the 1974 agreement created shared jurisdiction over Steeles Avenue, and that Markham also has jurisdiction over Steeles Avenue. The 1974 agreement is clear. Its recitals provide that the parties “have agreed that Steeles Avenue comprising the boundary between The Municipality of Metropolitan Toronto and The Regional Municipality of York shall be assumed by [Toronto] as a metropolitan road…” And section 2 provides:
... [Toronto] shall have and may exercise all of the rights and powers and shall be subject to all of the duties and obligations with respect to the portions of Steeles Avenue assumed pursuant to this agreement as is the case under the [Municipality of Metropolitan Toronto Act, R.S.O. 1970, c. 295 (the “MMTA”)] with respect to roads forming part of the Metropolitan Road System and with respect to the assumption of roads.
[16] One provision in the 1974 agreement pointed to by Toronto requires that Toronto give notice of the proposed exercise of the powers provided by ss. 90, 91 and 92 of the MMTA affecting lands in York and that Toronto not exercise these powers without the York Regional Council’s agreement. The contractual limitations on Toronto’s exercise of those powers to regulate land in York do not negate Toronto’s exclusive jurisdiction to maintain Steeles Avenue. Toronto also relies on a provision that requires Toronto to refer proposed official plans, zoning by-laws, and plans of subdivision and amendments thereto to York for study and comment. However, this provision similarly does not diminish Toronto’s assumption of jurisdiction.
[17] The motion judge also noted that the plaintiff’s survey and the photographic evidence established that the curbstone emanated from an area over which Toronto had assumed jurisdiction. Indeed, Toronto does not dispute that the boulevard from which the motion judge found the curbstone had emanated is within the road allowance for Steeles Avenue (and therefore part of the “highway” for the purposes of s. 44(1) of the Municipal Act).
[18] As we have indicated, s. 44(1) of the Municipal Act provides that the municipality that has jurisdiction over a highway is required to keep it in a state of repair that is reasonable in the circumstances, including the character and location of the highway. Therefore, having concluded that Toronto had exclusive jurisdiction over the boulevard, the motion judge correctly dismissed the plaintiff’s action against Markham.
[19] There were no material facts in dispute on this narrow issue before the motion judge. The motion judge properly concluded that whether Toronto had exclusive jurisdiction over the boulevard was not a genuine issue requiring a trial.
Markham did not owe Toronto a duty of care
[20] Toronto’s assertion that Markham owed it a duty of care to inspect and maintain the boulevard and to notify it of hazards on the boulevard that Toronto should deal with rested solely on the evidence of one of its Roads Operations Managers, Hector Moreno.
[21] His evidence was that, based on information provided to him by other Toronto staff and documents “still somewhat in draft”, he understood that (1) Markham did periodic inspections of the sidewalks that entailed at least some rudimentary examination of the boulevard; and (2) Toronto relies on the inspection and maintenance procedures undertaken by Markham and relies on Markham to notify it of hazards that should be dealt with by Toronto. Toronto was unable to find and produce any of the documents referred to by Mr. Moreno.
[22] The motion judge concluded as follows, at para. 22:
The fact that Markham had responsibility for the sidewalk[^1] and would conduct annual inspections of the sidewalk, which would include the grassy boulevard, does not attract legal liability to Markham establishing a duty of care to notify Toronto of any and all potential problem areas. In that regard, Markham’s representative in its examination for discovery, was asked what Markham would do if a problem on either the sidewalk or right-of-way was discovered. Mr. Robert Walker stated that if there was a serious problem it would be repaired right away. Further in his examination for discovery, Mr. Walker indicated that it was not all hazards that would be reported or repaired, as the City of Toronto would have been doing its own patrolling and, therefore, there was an expectancy that the City of Toronto would also see the hazard.
[23] The Supreme Court of Canada has articulated a two-stage test for the determination of a duty of care in a case that does not fit an established category. First, the court must determine whether the facts disclose “a relationship of proximity in which failure to take reasonable care might foreseeably cause harm to the plaintiff”. If yes, there is a prima facie duty of care: Knight v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at para. 39; see also Reference re Broome v. Prince Edward Island, 2010 SCC 11, [2010] 1 S.C.R. 360, at para. 14. If the plaintiff establishes a prima facie duty, the court must consider whether any “residual policy considerations” relating to “the effect of recognizing a duty of care on other legal obligations, the legal system and society more generally” should negate or narrow the prima facie duty: Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, at para. 37.
[24] Proximity is a broad concept, concerning the relations between the parties, that one cannot reduce to a single characteristic, but the Supreme Court has identified “expectations, representations, reliance, and the property or other interests involved” as factors relevant to proximity analysis: Hobart, at paras. 34-35. In essence, a finding of proximity reflects a conclusion that a duty ought to be imposed in particular circumstances because it is fair and just to do so having regard to the connection between the parties. Here, Toronto had specifically assumed responsibility from Markham under the 1974 agreement. As a result, Toronto owed a statutory duty of care to the plaintiff under s. 44(2) of the Municipal Act. The motion judge considered the evidence of Mr. Moreno and Mr. Walker regarding Toronto’s and Markham’s expectations after the 1974 agreement had been concluded. In substance, he found that there was not a relationship of sufficient proximity between Toronto and Markham because – on the evidence of the interactions between them and in this context of an assumed statutory duty of care – Toronto did not reasonably rely on Markham to notify it of “any and all potential problem areas”. In our view, the facts did not disclose “a relationship of proximity in which failure to take reasonable care might foreseeably cause harm to the plaintiff” and the motion judge correctly found that Markham did not owe Toronto a duty of care.
[25] Again, there were no material facts in dispute on the issue of whether Markham owed Toronto a duty of care, as alleged by Toronto. The motion judge properly concluded that whether Markham owed Toronto the alleged duty of care was not a genuine issue requiring a trial.
Issue 4
[26] This brings us to Toronto’s argument regarding the motion judge’s costs disposition. A motion judge’s costs decision is accorded deference. Unless “plainly wrong”, a motion judge’s costs order, Sanderson or otherwise, should not be set aside: see Moore (Litigation Guardian of) v. Wienecke, 2008 ONCA 162, 90 O.R. (3d) 463, at para. 40.
[27] Toronto argues that the motion judge’s costs order is plainly wrong because he ordered it to pay all of Markham’s costs of the motion absent a determination that Toronto is liable to the plaintiff.
[28] We agree.
[29] In a multiple-defendant case in which the plaintiff succeeds against some defendants but not against others, the general rule is that the plaintiff is entitled to costs against the unsuccessful defendant, and the successful defendant is entitled to costs against the plaintiff. However, the courts have recognized that in some circumstances this general rule can lead to an unjust result. A “Sanderson order” departs from the general rule and requires the unsuccessful defendant to pay the successful defendant’s costs.
[30] The usual test for determining whether a Sanderson order is appropriate has two steps. First, the court asks whether it was reasonable to join the defendants together in one action. If the answer to that question is “yes”, then the court proceeds to the second step and uses its discretion to consider whether it would be just and fair in the circumstances to require the unsuccessful defendant to pay the successful defendant’s costs: Moore, at para. 41.
[31] The motion judge first determined that it was “entirely reasonable” for the plaintiff to join Toronto and Markham as defendants in the action until such time as the evidence could establish whether one or other of them was responsible for the roadway.
[32] Exercising his discretion, he then concluded that it was just and fair in all of the circumstances to issue a Sanderson order. He acknowledged that there had been no finding of liability as against Toronto. As we have said above, the motion judge noted that it was beyond dispute that the plaintiff was the unfortunate victim of striking a concrete curbstone in the middle of a roadway. Although the issue of whether the plaintiff is contributorily negligent is an issue for trial, the motion judge commented that it was difficult to imagine a situation where one could fault the plaintiff for what happened.
[33] The fact that the plaintiff’s vehicle struck a concrete curbstone is not a basis for a Sanderson order. There was no suggestion that Toronto’s conduct on the summary judgment motion, or in the proceeding, was the basis for the motion judge’s order. Assuming no such issue arises if Toronto is successful in the action, there will be no basis to order it to pay the costs of the action incurred by the other successful defendant. The motion judge specifically acknowledged that there had been no finding of liability against Toronto. This is a question for trial. At this juncture it was premature, and therefore inappropriate, to order Toronto to pay Markham’s costs of the action.
[34] Markham is entitled to costs against Toronto on the summary judgment motion and the cross-claim and costs against the plaintiff of the summary judgment motion and the action against the plaintiff. Each shall be liable to pay Markham $25,951.50, which is one half of the total of $51,903.97 fixed by the motion judge. If the plaintiff succeeds against Toronto at trial, it shall be open to the trial judge in his or her discretion to direct that Toronto reimburse the plaintiff for any portion of the $25,951.50 amount that the plaintiff has paid to Markham. Alternatively, if the plaintiff succeeds at trial, it will be open to the trial judge to direct Toronto to pay any costs that Toronto owes to the plaintiff to Markham instead, on account of the $25,951.50 in costs that the plaintiff has been ordered to pay to Markham.
[35] Although the plaintiff did not appear at the hearing of this appeal, and did not file any material in relation to the costs issue, there was evidence that she was served with all of Toronto’s materials on the appeal and therefore did so with knowledge of the position asserted by Toronto in relation to the motion judge’s costs disposition.
Disposition
[36] We dismiss the appeal of the motion judge’s order granting summary judgment in favour of Markham, grant leave to appeal the motion judge’s costs disposition, and allow the appeal of the motion judge’s costs disposition. Costs of the summary judgment motion shall be payable as indicated above. Markham shall be entitled to costs of the appeal, fixed in the amount of $14,500, inclusive of HST and disbursements.
Released: “AH” “NOV 07 2016”
“Alexandra Hoy A.C.J.O.”
“M.L. Benotto J.A.”
“Grant Huscroft J.A.”
[^1]: It was not in dispute that through the operation of s. 55(1) of the Municipal Act and the 1974 agreement that Markham was responsible for the maintenance of the sidewalk on the portion of the north side of Steeles Avenue East where the accident occurred.