Sutherland v. Via Rail Canada Inc., 2012 ONSC 6014

CITATION: Sutherland v. Via Rail Canada Inc., 2012 ONSC 6014

DIVISIONAL COURT FILE NO.: 481/12

DATE: 20121024

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

TERRY DALE SUTHERLAND and MELISSA SUTHERLAND

Respondents (plaintiffs)

–and–

VIA RAIL CANADA INC.

Moving Party (defendant)

• and-

GODERICH-EXETER RAILWAY COMPANY LIMITED

Moving Party (defendant)

W.G. Scott, for the respondents (plaintiffs)

H. Kohn, for the moving party (defendant)

K.R. Peel, for the moving party (defendant)

HEARD: October 22, 2012

DUCHARME J.

RULING ON LEAVE APPLICATION

I. Introduction

1The defendant, Via Rail Canada Inc. (Via Rail) and the added defendant, Goderich Exeter Railway Company (GEXR) move for the leave to appeal the Order of Tausendfreund J dated March 7, 2012 permitting (i) the plaintiff to add GEXR as a defendant to the action; (ii) permitting the plaintiff to amend their Statement of Claim to add allegations against GEXR; and (iii) granting leave to GEXR to plead a limitation defence. GEXR also seeks leave to appeal the costs order of Tausendfreund J.

2With respect to the motion of Via Rail, the plaintiff submits that it is not affected by the Order of Tausendfreund J and does not have status to appeal it. I reject this submission as the addition of GEXR as a defendant will clearly complicate the conduct of this case. So I heard submissions from both Via Rail and GEXR on the main question. As no order with respect to costs was made with respect to Via Rail, they did not make submissions in that regard.

II. The Test for Leave to Appeal under Rule 62.02(4)

3Pursuant to Rule 62.02(4) of the Rules of Civil Procedure leave to appeal should be granted where either:

a. There is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

b. There appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

4It is not necessary for the moving party to show that the decision is wrong or probably wrong, only that there is good reason to doubt the correctness of the decision. Nonetheless the test for leave is an onerous one. The question is whether the decision is open to serious debate and, if so, that the decision warrants resolution by a higher level of judicial authority. Leave then should be granted if the maters involved are of general importance that relate to matters of public importance and matters relevant to the development of the law and the administration of justice.

III. The Motion for Leave to Appeal Decision to Add GEXR as a Party Defendant

5The submissions of the moving parties can be analyzed under the following four headings:

A. The Question of Due Diligence and Discoverability

6The moving parties submit that there is good reason to doubt the correctness of the order of Justice Tausendfreund as he erred in the following respects in adding GEXR as he did. He failed to properly apply sections 4, 5 and 21 of the Limitations Act, 2002 (S.O. 2002, c.24, Sched. B, as amended). Specifically he erred in failing to apply the proper onus which lay upon the plaintiffs throughout to show whether the plaintiffs had means to have reasonably known of the matters referred to in clause 5(1)(a) of the Limitations Act, 2002, and whether they had shown due diligence as required under section 5. In this regard, the moving parties submit that the motions Judge failed to appreciate the ample body of evidence of discoverability which ought to have determined the matter against the plaintiffs’ motion.

B. Prejudice to GEXR

7GEXR claim that their late addition as a party will prejudice their ability to defend as certain employees are no longer in their employ and other original records are no longer in their possession. Consequently they claim to be prejudiced by an inability to identify prospective witnesses or to provide records of due diligence on a large number of matters.

C. Other Conflicting Judicial Decisions

8The moving parties further submit that there are conflicting decisions by other judges and courts in Ontario or elsewhere on the matter involved in the proposed appeal and it is desirable that leave to appeal be granted, within the meaning of sub-rule 62.02(4)(a).

D. Importance of the Appeal

9Finally, the moving parties submit that the proposed appeal involves matters of such importance that leave to appeal should be granted, particularly as to issues of justice, limitation periods, and the due diligence of counsel in relation to discoverability.

10I will deal with each of these in turn.

IV. ANALYSIS

A. The Question of Due Diligence and Discoverability

11The submission of the moving parties is the motions Judge wrongly found that the plaintiffs had discharged the onus of showing that they could not have discovered the possible involvement of GEXR until March 17, 2010. The moving parties point to a variety of sources of information that would have pointed to GEXR’s involvement if the plaintiff had exercised due diligence. The motions judge considered these and concluded that plaintiff’s counsel had treated the file reasonably and with due diligence.

12In my view the motions judge did not err in reaching this conclusion. The accident occurred on December 4, 2006. Plaintiff’s counsel, Ms. Bent, was retained in January, 2007. In April, 2007, Ms. Bent sent a notice of claim letter to Via Rail. By email dated April 9, 2007, Via Rail notified GEXR that it had been put on notice of a claim arising out of this collision. The statement of claim was issued May 16, 2008. VIA sent its statement of defence June 18, 2008. Importantly, there was no reference in this statement of defence that GEXR might be responsible for the tracks and the signals for the crossing. VIA’s affidavit of documents was not provided until February 26, 2009 and this contained the first document in this action that made an oblique reference to GEXR. Plaintiff’s counsel did not appreciate the significance of the document. Thus, it was not until the discovery of VIA was held March 17, 2010 the plaintiff’s counsel became aware of GEXR’s possible involvement. The motion to add GEXR as a party defendant was brought a little over seven months later on October 27, 2010.

13While the applicants claim that the motions judge failed to apply the correct principles of law and proceeded in a manner inconsistent with various Court of Appeal authorities, this is not so. The real complaint of the moving parties is not that the motions judge applied the wrong principles. Rather their complaint is the result he reached having done so. This is no basis to grant leave for them to appeal.

14While the moving parties are right to point to the concern about delay in our civil justice system this concern must be balanced with the strong public interest in having legal disputes resolved on their merits. Both of these concerns are reflected in rule 1.04(1) which provides that the Rules of Civil Procedure are to be "liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.” In the circumstances of this case, it is appropriate that any claim against GEXR be determined on its merits.

B. Prejudice to GEXR

15The motions judge considered GEXR’s submissions with respect to prejudice carefully as he was required to under rules 5.04(2) and 26.01. He noted that, “GEXR has not advanced the position that it cannot produce necessary witnesses nor does it refer to relevant important documents on which it would otherwise rely, but that these are no longer available due to the passage of time.”

16In any event, I agree with Justice Tausendfreund’s approach to this issue. He noted at para 19 that GEXR was aware of the accident within hours of its occurrence and had a report prepared with respect to the state of the crossing and the operational function of the various signs. I agree with his statement that it should have been obvious to GEXR that an action for damages would likely be brought against them. In particular, I agree with his comments that “If GEXR did not do its own due diligence in assessing the state of the tracks and the crossing and signal lights, take statements from possible witnesses and maintain all relevant records, it did so at its peril. Under those circumstances, I am not prepared to find that GEXR might be prejudiced.”

17Moreover, there is no prejudice to GEXR with respect to the availability of a limitations defence for GEXR as the motions judge ruled they may still plead the defence and that issue remains open for resolution on a motion for summary judgment or at trial.

C. Other Conflicting Judicial Decisions

18As for the requirements of rule 6.02(4)(a) it is important to reiterate what was said by Justice Montgomery said in ComTrade Petroleum Inc. v. 490300 Ontario Limited, 1992 7.0.R. (3d) 542 (Div. Ct):

The exercise of discretion which has led to a different result because of different circumstances does not meet the requirement for a "conflicting decision". It is necessary to demonstrate a difference in the principles chosen as a guide to the exercise of such a discretion.

19In this regard, GEXR submits that the decision of the motions judge is inconsistent with Joseph v Paramount Canada’s Wonderland, 2008 ONCA 469 which made it clear that under the new Limitations Act, 2002, [S.O. 2002, c.24, Sched. B] a plaintiff can no longer rely on the “special circumstances” doctrine to amend a claim by adding parties or causes of action following the expiry of a limitation period. The respondents assert that the motions judge’s reference to prejudice was an indication that he was applying the “special circumstances” doctrine. This is incorrect. As mentioned already, the motions judge considered prejudice as required to by rules under rules 5.04(2) and 26.01, it had nothing to do with the “special circumstances” doctrine. Thus, his reasoning cannot be said to be inconsistent with Joseph v Paramount Canada’s Wonderland.

20GEXR, also submits that the order of the motions judge is inconsistent with cases dealing with the discoverability principle such as Smith v INCO, 2010 ONSC 3790 (S.C.J.); Zapfe v Barnes, [2003] O.J. No. 2856 (C.A.); Peixeiro v. Haberman, [1997] 3 S.C.R. 549 and Central Trust Co. v Rafuse, [1986] 2 S.C.R. 147. Both GEXR and VIA say that the order is also inconsistent with the treatment of due diligence and discoverability in cases such as Peixeiro, Zapfe and Wakelin v. Gourley, (2005), 76 O.R. (3d) 272 (S.C.J.) But this is not true. The motions judge applied the correct principles to the questions of due diligence and discoverability to the facts before him. Again, the moving parties’ real complaint is that they do not like the conclusion that he reached. Thus, there is no inconsistency here that would satisfy 6.02(4)(a).

D. Importance of the Appeal

21The requirement in Rule 62.02(4) of the Rules of Civil Procedure that the proposed appeal involves “matters of such importance” that leave to appeal should be granted was discussed by Justice Montgomery in ComTrade Petroleum Inc. v. 490300 Ontario Limited, 1992 7.0.R. (3d) 542 (Div. Ct):

We wish to draw to the attention of the members of this court and the profession at large that those words refer to matters of general importance not matters of particular importance relevant only to the litigants.

22GEXR submits that the decision of the motions Judge raises important issues about “justice, limitation periods, and the due diligence of counsel in relation to discoverability.” Via Rail goes further, suggesting somewhat floridly in their written submissions that the issues raised in the appeal are important, “to the railway industry and to the law profession at large insofar as it suggests the introduction of a remarkably lax and dilatory approach to the investigation and prosecution of civil proceedings arising out of any railway train-vehicle incident, or indeed of any motor vehicle accident litigation.”

23These submissions are without any merit. The motions judge made a discretionary decision based on a very specific analysis of the case before him. He did not purport to articulate any broader principles of law and his decision has no such precedential impact. Moreover, many of these “important issues” will be inevitably canvassed when GEXR raises a limitation defence either on a motion for summary judgment or at trial.

E. Conclusion

24For the foregoing reasons, I find that the moving parties have not satisfied either branch of Rule 62.02(4) with respect to the Order of Tausendfreund J dated March 7, 2012 and leave to appeal that order is therefore denied.

V. Motion for Leave to Appeal the Costs Order Below

25In his endorsement on costs dated May 16, 2012, Tausendfreund J ordered that GEXR pay costs to the plaintiffs in the cause of the entire action and fixed in the amount of $20,000.00. GEXR seeks leave to appeal this costs order under Rules 62.02(4)(a) and 62.02(4)(b) on the basis that:

(a) that there are conflicting decisions by other judges and courts in Ontario or elsewhere on the matter involved in the proposed appeal and it is desirable that leave to appeal be granted, within the meaning of sub-rule 62.02(4)(a); and

(b) there is good reason to doubt the correctness of the costs decision and the proposed appeal involves matters of such importance particularly as to issues of justice and the general application of just costs principles in such a case.

26For the reasons outlined above, I have dismissed the application for leave to appeal on the main question. Nonetheless, GEXR seek leave to appeal the costs order. A costs order is discretionary and GEXR concedes that leave to appeal such an order should be granted sparingly. I reject the argument that rules 5.01 and 26.01 require that GEXR should have been compensated through a costs order for having been added as a defendant. I also reject the contention that the costs endorsement contains an inconsistency between paragraphs 2 and 6. Thus, the motions judge did not err in this regard and there is no other reason to doubt the correctness of his decision.

27As mentioned above, ComTrade Petroleum Inc. v. 490300 Ontario Limited, stands for the proposition that to satisfy rule 62.02(4)(a), it is not enough to demonstrate that different courts have exercised their discretion to produce different results in analogous cases. Rather, it is necessary to demonstrate that the courts are relying on different principles to guide the exercise of their discretion. The moving parties have failed to demonstrate that courts are applying different principles in awarding costs. The fact that other Masters or Judges have exercised their discretion differently with respect to ordering costs in analogous circumstances does not justify granting leave to appeal.

28Thus, GEXR has not satisfied either branch of Rule 62.02(4) with respect to the costs order and leave to appeal the costs order is therefore denied.

VI. CONCLUSION

29The motion for leave to appeal the order of Tausendfreund J dated March 7, 2012 or his order with respect to costs is dismissed.

30By agreement of the parties, GEXR will pay the Plaintiffs $2,000 as costs for these motions and there will be no costs order with respect to VIA Rail.

Ducharme J.