DIVISIONAL COURT FILE NO.: 388/02

DATE: 20030423

ONTARIO

DIVISIONAL COURT

SUPERIOR COURT OF JUSTICE

B E T W E E N:

LOUISE JACKSON

Alfred M. Kwinter, for the Plaintiff (Appellant)

Plaintiff (Appellant)

• and -

GREAT PINE RIDGE SNOWMOBILE ASSOCIATION INC. and JIM TAPSCOTT

No one appearing for the Defendants

Defendants

• and -

GORD HUNTER and DAVID VOUT

Third Parties (Respondent)

Robert L. Love, for the Third Party Respondent, Gord Hunter

HEARD: November 22, 2002

Ellen Macdonald J.

REASONS FOR DECISION

1This is an appeal from the order of Master Polika made on March 18, 2002 dismissing the plaintiff, Lousie Jackson's (“Jackson”) motion to add the third party, Gord Hunter (“Hunter”), as a defendant to the main action.¹ In this appeal, Jackson asks that the learned Master's order be set aside and that she be granted leave to add Hunter as a Defendant and to amend the Statement of Claim accordingly. Jackson asks for leave to make allegations of negligence against Hunter as Defendant which are identical to those set out in the Third Party Claim. Jackson also asks that the costs order of $2,750 made by the Master be decreased to an amount considered appropriate by this court.

2Jackson's action arises from a snowmobiling accident that occurred on January 19, 1997. Jackson, Hunter and the Third Party, David Vout (“Vout”) were operating snowmobiles in the Cobourg area. Hunter was leading the group. Jackson followed Hunter and Vout followed Hunter. Unable to negotiate a sharp turn on the snowmobile trail, Jackson drove over the edge of a plateau and down an embankment. She sustained injuries that result in this action.

3The Statement of Claim was issued on June 12, 2000. It named as defendants, Great Pine Ridge Snowmobile Association Inc. and the groomer of the trail, Jim Tapscott. After discoveries, Jackson instructed her solicitors to add Hunter as a defendant to the main action. The matter is case managed by Master Polika. The record discloses that the matter first came before him on March 28, 2001 at which time he ordered that a motion to amend the Statement of Claim was to brought and argued by May 1, 2001. On May 9, 2001, the Master convened a case conference by telephone and dealt with a number of scheduling matters. He noted that Jackson chose not to amend the Statement of Claim. There was a further case conference by telephone on September 5, 2001 at which time the Master extended the time for completion of discovery to November 1,2001. October 31, 2001 and November 1, 2001 were set aside for that purpose.

4On December 6, 2001, the Master ordered that any motion to add Hunter as a defendant be brought by February 5, 2002 failing which Jackson is deemed to have waived the right to pursue such relief. For purposes of this appeal, this disposition is significant. It altered the May 1, 2001 deadline referred to above and set in motion a series of events that derailed original expectations about the timing of the motion, which was subsequently adjourned twice at the request of Hunter's counsel. On February 26, 2002 (the date of the second adjournment) the Master made the following endorsement:

Counsel for third party appeared indicating counsel had agreed to adjourn the motion. The Trial Scheduling Court appearance is fixed for March 27, 2002. The issue in the motion may have been addressed in a prior case conference. The issue must be addressed ASAP given the age of the action (approximately 623 days old). Motion adjourned to 10:00 a.m. March 18, 2002 marked peremptory to proceed on all parties with ¾ hour set aside for it. Third party’s counsel to forthwith serve a copy of this order on all other parties.

5The motion was ultimately heard on March 18, 2002. It is from the disposition of this motion that Jackson appeals. The Master's endorsement reads as follows:

For reasons to follow motion is dismissed. Counsel addressed me on costs. The respondent Hunter was wholly successful. Costs are fixed on a partial indemnity scale at $2,750.00 payable by plaintiff to defendant Hunter within 30 days. In fixing the costs I have taken into account the submissions of counsel, the matters in issue, the material filed, the time spent by counsel and the success obtained.

6The Master's reasons followed on April 17, 2002. In summary, he dismissed Jackson's motion on four grounds:

(a) She failed to comply with the time requirements set out in the timetable established on March 28, 2001;

(b) She failed to comply with the requirements of Rule 5.04(2) of the Rules of Civil Procedure and the Master exercised his discretion to dismiss her motion;

(c) the prejudice to Gord Hunter caused by the proposed addition of him as a defendant could not be compensated by way of costs or an adjournment; and

(d) Jackson's Amended Statement of Claim did not disclose a claim “tenable in law”.

Disposition of this Appeal

7For the reasons that follow, I allow this appeal. I do so with deep respect to the Master. Aside from the issues of law, I will make one observation that is not unique to case managed matters under Rule 77.

8This record discloses that there were many orders made by the Master as the matter proceeded. From my review of the content of these orders, it is apparent that the Master convened case conferences by telephone on a regular basis to establish and maintain a timetable that would comply with Rule 77. (10). As early as May 9, 2001, the Master was cognizant that Jackson had not, by that time, amended her Statement of Claim. The third party action was commenced on April 24, 2001.²

9The rationale underlining the Master’s reasoning is summarized in paragraphs 11 & 12 of his reasons which I reproduce as follows:

[11] If leave had been sought by the plaintiff to bring this motion, I would not have [granted] it on the material before me. There is no acceptable explanation, in fact no explanation at all, tendered as to why the motion was not brought within the time frame ordered on March 28, 2001. To simply allow the motion to be brought without an acceptable explanation is to throw orders of the court into disrepute and to undermine the system of case management which is dependant on scheduling orders. Webber L.J.S.C. in Deslauriers v. Bowen [1990] O.J. No. 1148 (June 26, 1990) dealt with a similar situation. The plaintiff failed to explain the delay in bringing the motion to add the third parties as party defendants and he concluded on that basis the motion should be denied. The situation before me is no different in principle and on that basis the motion is refused.

[12] Further, I find that the plaintiff failed to comply with the time requirements set out in the timetable established on March 28, 2001 respecting this motion. Rule 77.10(7) provides that when a party fails to comply with a time requirement a case management master may amongst other relief make any other order that is just. In the circumstances before me my order refusing the motion was also made on the basis that it is just pursuant to Rule 77.10(7).

10There are a number of things that emerge from these paragraphs. First, while it is correct that the Master imposed a time frame on March 28, 2001, the reality is that this time frame was amended or changed by several events following March 28, 2001. For purposes of this appeal, the most important change comes from the disposition by the Master on December 6, 2001 which clearly gave Jackson additional time to add Hunter as a party defendant. The time then prescribed was February 5, 2002.

11Jackson did bring her motion and returned it on February 5, 2002. It was then adjourned at the request of the third party to February 26, 2002.

12The February 26, 2002 order of the Master, adjourning Jackson’s motion to March 18, 2002, is set out in paragraph 4 of these reasons. I agree with the submission of Mr. Kwinter that in view of the history of the adjournments it was wrong in law for the Master to dismiss the motion on the grounds that Jackson had violated the time requirements initially set out in his order of March 28, 2001. By so doing, the Master overlooked the fact that Jackson moved to add Hunter as a defendant within the time specified in his order of December 6, 2001. Indeed, the February 5, 2002 endorsement refers to the fact that the motion was “brought in time pursuant to my order of December 6, 2001”. To my mind, it was clearly wrong in law for the Master to resort to Rule 77.10 (7) of the Rules of Civil Procedure as a rationale for the dismissal of Jackson's motion. This error in law is understandable in a case such as this, with a history that demonstrates disregard by the parties for the purposes and objectives of Case Management. The Master's disapproval of and frustration with the delays is apparent in his reasons.

13In this appeal, the commitment to the purposes of Case Management must yield to the injustice that would occur to Jackson who brought her motion in compliance with the Master's December 6, 2001 order. I do not accept the submission of Hunter that the failure by Jackson to explain the lengthy delay or to seek leave for an extension of time is fatal to this appeal or to the motion. It was reasonable for Jackson to conclude that the time requirements initially imposed by the Master's order of March 28, 2001 and as changed by subsequent events including the Master's own order of February 26 2002 obviated the necessity to explain the delay. To my mind, the rigid application of the case management rules in the face of the history of events in this case produces a result that cannot stand. On this basis alone, I would allow the appeal.

14I agree with Mr. Kwinter that that pursuant to the doctrine of res judicata, if there are two conflicting orders pertaining to the same issue, the later order prevails it being presumed that it is the most informed expression of the court’s opinion. See Blueberry River Indian Band v. Canada, [1999] F.C.J. No. 452 at p. 3 (F.C.C.) (QL). While Blueberry involved subsequent judgments in different actions, this distinction does not persuade me in this matter. To my mind, the history of scheduling events severely undermines the prejudice argument advanced by Hunter. Similarly, I am not persuaded that Hunter is prejudiced by Jackson's failure to bring a motion for leave to extend the May 1, 2001 deadline. It cannot be that one can complain of prejudice when, at its highest, the reality is one of inconvenience compensable by costs.

15I now turn to the other grounds that are referred to the Master's reasons. The motion to add parties is governed by Rule 5.04(2). The rule is discretionary in that it provides that the court may add a party on such terms as are just unless prejudice would result that cannot be compensated for by costs or an adjournment. The Master's reasons in paragraph [20] contain his rationale for refusing Jackson’s motion on these grounds. He stated:

[20] In short, the proposed addition of Mr. Horton³ as a party defendant at this time would fly in the face of the purpose and object of Rule 77 by increasing the [parties] costs and causing delay. Taking all the factors into account, in the circumstances set out herein, I am not prepared to exercise my discretion under Rule 5.04(2) in favour of the plaintiff.

16The Master undertook an analysis of the procedural unfairness and dismissed Jackson’s motion before considering the issue of non-compensable prejudice. The authorities are clear that the court, when exercising its discretion under Rule 5.04(2), should make a determination of whether non-compensable prejudice results from the proposed addition of parties before it undertakes an analysis of procedural unfairness. See Jacobson v. Trace Sciences International, [2000] O.J. 2953 at paragraphs. 21-23 wherein Master Albert observed in reference to Rules 26.01 and 5.04:

[21] The discretion given by Rule 5.04 is to ensure procedural fairness. Considerations include the state of the action, whether trial is imminent, whether examinations for discovery have been completed, whether the purpose of adding the party is improper (such as to obtain discovery of the added party), and whether the added party is a necessary or proper party.

[22] Both rules apply the same threshold test: The moving party must demonstrate that no prejudice would result from the amendment that could not be compensated for by costs or an adjournment (Seaway Trust v. Markle).

[23] Once the threshold test has been met, then amendments to allegations against existing parties are governed by Rule 26.01 and whether or not a party should be added, together with allegations made against the proposed added party, are governed by rule 5.04 (Seaway Trust v. Markle).

17The cause of action in this matter arises from relatively simple facts. In these circumstances, I am not persuaded by the strenuous argument advanced by Mr. Love on behalf of Hunter to the effect that the prejudice suffered by Hunter is non-compensable by way of costs of by an adjournment.

Jackson’s Proposed Amended Statement of Claim

18Citing CC&L Dedicated Enterprise Fund (Trustees of) v. Fisherman, [2001] O.J. No. 4622, a decision of Cumming, J., the Master concluded that Jackson’s proposed amended statement of claim did not disclose a claim “tenable in law”. His reasoning on this point is expressed at paragraph [27] of his reasons:

[27] I have reviewed the proposed amended statement of claim. I find the submissions made on behalf of Mr. Hunter to be made out such that the proposed amendment does not amount to a claim tenable at law.

19I depart from the Master's reasoning on this issue.⁴ Cumming J., referring to whether or not a claim is tenable at law, also stated “That is, the motion is to dismissed if the claim is one that “ is clearly impossible of success”. To my mind, this statement of the law is in keeping with the principles set out in Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959. Without quoting explicit passages from the judgment of Wilson J., I take from her analysis the following:

(1) the test to be applied is whether it is “plain and obvious” that the statement of claim discloses no reasonable claim;

(2) the action should be struck only if it is certain to fail because it contains a radical defect;

(3) a plaintiff should not be driven from the judgment seat except n cases where it is quite plain that the alleged cause of action has no chance of success; and

(4) the fact that the claim may involve complex issues of fact or law or may give rise to a novel legal proposition should not prevent a plaintiff from proceeding with the action.

20The threshold to sustain a pleading is not a high one. While Jackson did not explicitly plead the existence of a duty of care between her and Hunter or proximity in their relationship, the proposed Amended Statement of Claim pleads that Hunter, familiar with the snowmobile trail, was leading Jackson and “yet he failed to advise her regarding the dangers presented by the route they were taking”. See paragraphs 7 to 10 of the proposed amended pleading. No matter what may be said about the imperfections in the proposed pleading, it meets the description of proximity by La Forest J. in Hercules Management Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165 where he observed at paragraph 28:

As I have already tried to explain, determining whether “proximity” exists on a given set of facts consists in an attempt to discern whether, as a matter of simple justice, the defendant may be said to have had an obligation to be mindful of the plaintiff's interest in going about his or her business.

21There can be no great mystery, especially to Jackson and Hunter who live with each other, about the basis for the proposed cause of action. At this stage, the proposed pleading must be taken as true without consideration of the factual or evidentiary merits of the proposed action. On this basis, it was an error in law for the Master to refer to the admissions of Jackson at her examination for discovery. I am mindful, in making this observation, that the Master qualified his use of the admissions. It remains, however, that he stated that these admissions were “one more factor” which went into the exercise of his discretion under Rule 5.04(2).

22Finally, I will address one other contentious point in this appeal. It involves a difference in recollections of counsel who appeared before the Master. Monika Liberek, an associate in Mr. Kwinter's firm appeared for Jackson. Her affidavit is contained in the Appeal Book. She deposes that she advised the Master that she had with her a new Amended Statement of Claim containing more particulars than the one contained in the Motion Record. She swears that she also advised the Master that she had a “corrected” affidavit of a legal secretary in Mr. Kwinter's office. This affidavit disclosed sources of information and belief that were omitted in an earlier version. She swears that the Master refused to grant her leave to file the new pleading. In a responding affidavit, Christine Fotopoulos, a partner at Borden Ladner Gervais, the firm having carriage of this matter for Hunter, denies any attempt on the part of Ms. Liberek to seek leave to file any further affidavit material or a further amended pleading. Ms. Fotopoulos does admit that Ms. Liberek advised the Master in reply argument that she had with her an Amended Statement of Claim and a corrected affidavit but states that she (Ms. Liberek) did not seek the court's permission to file same.

23I mention this issue for one reason. I wish to record that my disposition of this appeal is made without any legal or other consideration of anything that might flow from the opposing recollections of Ms. Liberek and Ms. Fotopoulos.

24I urge the parties and their counsel to cooperate in getting this matter resolved or tried as soon as possible.

Costs Before The Master

25The costs order of the Master is set aside. In its place, I arbitrarily fix costs at $1000 payable by Jackson to Hunter for the motion before the Master. Her role in the delay has increased Hunter's costs. It is impossible for me to calculate such increased costs with precision. There is suggestion of further discovery. If this is necessary, such discovery will be short even if Ms. Foutopoulos choses to travel to Cobourg.

Disposition of this Appeal

26For all of the above reasons, this appeal is allowed. Leave is granted to Jackson to add Hunter as a named defendant and to amend the Statement of Claim accordingly. Leave is granted to Jackson to make allegations of negligence against Hunter that mirror those contained in the Third Party Claim. Costs of this Appeal are awarded to Jackson and are fixed at $2500 to be set off against the disposition of costs in the motion. The Appeal Book is endorsed “For reasons released today, this appeal is allowed.

Ellen Macdonald J.

Footnotes

1. 1Jackson and Hunter are common law spouses.
2. 2The case management orders are dated March 28, 2001, May 9, 2001, September 5, 2001, December 6, 2001, February 5, 2002, February 26, 2002 and March 18, 2002. There is confusion about the about dates in the reasons of Master in that references to 2001 and 2002 are sometimes used interchangeably.
3. 3Although the Master refers to "Mr. Horton", the only logical conclusion is that he meant Mr. Hunter. There is no Mr. Horton in the action.
4. 4By choosing the words " I depart from the Master's reasoning", I do not want to be taken as infusing into the well established jurisprudence on the standard of appellate review from the decision of the Master, a standard other than correctness. I simply mean that this is another basis on which I have come to the overall conclusion that the Master was clearly wrong in law.