COURT OF APPEAL FOR ONTARIO

DATE: 20001115

DOCKET:C30271

McMURTRY C.J.O., GOUDGE AND SHARPE JJ.A.

BETWEEN: )

) Duncan Finlayson, Q.C.

CINDY COULTER, ANNE MARIE ) for the appellant Crown

MACLENNAN, RANDY TAUS, RONALD )

TAUS, RUDOLPH TAUS, RICHARD )

TAUS, ERMA TAUS and ENSO TAUS )

) Kenneth R. Peel

Plaintiffs ) for the defendant/

(Respondents) ) respondent CNR

• and - )

) Donald H. Rogers, Q.C.

THE CANADIAN NATIONAL ) and Allyn P. Abbott

RAILWAY CO., ROBERT HART ) for the defendant/

Carrying on business as PINE FALLS ) respondent Hart

LODGE )

Defendants )

(Respondents) )

• and -

HER MAJESTY THE QUEEN )

IN RIGHT OF THE PROVINCE )

OF ONTARIO )

Defendant )

(Appellant) ) Heard: May 4, 2000

On appeal from the judgment of Justice Michael Meehan dated June 25, 1998, at Sudbury, Ontario.

GOUDGE J.A.:

[1] On the morning of February 25, 1990, Cindy Coulter, the main plaintiff in this action, left the Pine Falls Lodge, where she had been a guest for the night, to drive back to Sudbury. The Lodge was owned and operated by the defendant Robert Hart.

[2] About three miles from the Lodge, the road on which she was travelling crossed the railway tracks of the defendant Canadian National Railway Co. (CN) at a crossing maintained by the defendant Ontario Ministry of Natural Resources (MNR).

[3] Tragically, Ms. Coulter suffered catastrophic injuries that morning, when her car was hit at the crossing by a CN freight train. In this lawsuit she and her dependants sought compensation from CN, MNR and Mr. Hart.

[4] Part way through the trial, Ms. Coulter’s damages were agreed on at $2 million and a settlement awarding her that sum was approved by the trial judge. Since then she has not been a part of these proceedings.

[5] By agreement, the task then left to the court was, as the trial judge put it, to decide liability for the damages amongst the three defendants, without reference to contributory negligence of the plaintiff.

[6] Meehan J. apportioned negligence 35% to CN and 55% to MNR, based on their relative responsibilities for the crossing, and 10% to Mr. Hart, finding that he had a duty to warn Ms. Coulter of the dangers of the crossing. Meehan J. went on to find that MNR was contractually bound to indemnify CN for the railway’s negligence.

[7] All three defendants have appealed. For the reasons that follow I would dismiss the appeals of CN and MNR, but would allow the appeal of Mr. Hart.

THE RELEVANT FACTS

[8] As Ms. Coulter drove towards the crossing, the road was on the north side of the railway tracks. For some two kilometres leading to the crossing the road was on railway lands as was the crossing itself.

[9] The road turned south to cross the tracks. A driver approaching the crossing from the north had a very limited view of trains coming from the east, mainly due to an embankment to the northeast of the crossing located partly on the railway right of way and partly on provincial Crown land. The road sloped steeply just as it approached the tracks from the north side.

[10] The railway crossing was a private crossing protected only by a sign erected by CN saying “Private Crossing – Persons Using the Crossing Do So At Their Own Risk – CN Rail”. Because of increased use by cottagers and other members of the public, MNR wished to have the crossing upgraded to the status of a “public crossing”. However, MNR had not taken the safety related steps necessary for the upgrading. Both MNR and CN were aware of the work that needed to be done in this regard.

[11] The day of the accident was sunny, clear and cold and the road incline just to the north of the tracks was icy. Since Ms. Coulter has no memory of the event, the only evidence about how the accident happened came from the train engineer who said that the car just seemed to slide down the slope and stop on the crossing where it was hit by the train. The train crew had no chance to avoid the collision.

[12] In 1980, ten years before the accident, consistent with its desire to ensure a viable crossing, MNR entered an agreement with CN to maintain and repair the crossing to the satisfaction of CN. That agreement also contained the indemnity provision relied on by CN.

[13] Against this factual backdrop Meehan J. apportioned negligence amongst the three defendants, CN, MNR and Mr. Hart. The trial judge fixed CN’s contribution at 35%. He fixed MNR’s contribution at 55%, and found that MNR was obliged to indemnify CN pursuant to the indemnity in the agreement. Finally, he fixed Mr. Hart’s contribution at 10%. All three defendants have appealed. I will address each appeal in turn.

THE CN APPEAL

[14] The assessment of liability against CN was based on s.3(1) of the Occupier’s Liability Act, R.S.O. 1990 c.O.2 The trial judge found that as owner of the right of way CN had responsibility for the condition of the premises including the crossing. In failing to take reasonable care to ensure that persons entering the crossing were reasonably safe, particularly by failing to correct the deficient sight lines and the excessive slope, CN was found to be in breach of s.3(1) of that Act.

[15] On appeal, CN argues that the applicable section of the Act is 4(1) not s.3(1). In the alternative, it argues that it met the requirements of s.3(1).

[16] These two sections read as follows:

3.—(1) An occupier of premises owes a duty to take such care as in all the circumstances of the case is reasonable to see that persons entering on the premises, and the property brought on the premises by those persons are reasonably safe while on the premises.

4.—(1) The duty of care provided for in subsection 3(1) does not apply in respect of risks willingly assumed by the person who enters on the premises, but in that case the occupier owes a duty to the person to not create a danger with the deliberate intent of doing harm or damage to the person or his or her property and to not act with reckless disregard of the presence of the person or his or her property.

[17] In my view, the trial judge was correct to apply s.3(1) of the Act. It cannot be said that when Ms. Coulter’s car slid down the icy slope onto the railway tracks that she was willingly assuming the risks presented by the crossing. Section 4(1) therefore has no application.

[18] As to s.3(1) there was ample evidence to support the finding that CN as owner of the right of way did not take reasonable care to make the crossing reasonably safe for people like Ms. Coulter. CN knew of the deficiencies in the crossing, particularly concerning the lack of visibility to the east and the steep slope of the road coming from the north. It did nothing to correct these deficiencies, which were significant causes of the accident.

[19] I would not therefore interfere with the finding of liability against CN.

THE MNR APPEAL

[20] MNR does not contest that it was properly found negligent. However, it raises the following three arguments: first, that there is no causal connection between its negligence and the accident; second, that it is protected from liability by s.50(1) of the Public Lands Act. R.S.O. 1990, c.P.43 and third, that it is not required to indemnify CN.

[21] The first argument is readily answered. The settlement agreement between the defendants and the plaintiff removed from the trial any issue of contributory negligence of the plaintiff. The fault found against MNR was simply that as the party responsible for maintaining the crossing it failed to take reasonable care to see that the crossing was reasonably safe for those who use it.

[22] Meehan J. found that MNR knew of the obstruction of vision, the substantial slope of the north grade and problems with iciness on that slope, yet did nothing to correct them. Further, he found that these were substantial contributing factors to the accident. There was ample evidence available to support these findings. I would therefore not give effect to this argument.

[23] The second argument depends on s.50(1) of the Public Lands Act. It reads as follows:

(1) No civil action shall be brought against the Crown or any person in respect of misfeasance, non-feasance or negligence in connection with the construction, maintenance, repair or closing of a road.

[24] “Road” is defined in that Act as a road or part of a road on public lands (subject to certain exceptions not relevant to this case). The trial judge dismissed this argument because of his factual determination that for some two kilometres before the entrance to the crossing the road was on railway lands not on public lands. This too is a finding reasonably grounded in the evidence and one with which I would not therefore interfere. Hence, this road is not a “road” as defined in the Public Lands Act and the Act is of no application to this case.

[25] Since MNR’s first two arguments fail, the finding of liability against it must stand. As I have indicated, the trial judge apportioned the relative degrees of fault of CN and MNR 35% to CN and 55% to MNR. Given that the finding of fault against each must be sustained, neither CN nor MNR challenge this apportionment on appeal and in my view there is no basis for interfering with it.

[26] MNR’s third argument arises from the agreement relating to the crossing made in 1980 between inter alia MNR and CN. MNR wanted to ensure the continued operation of the crossing in order to provide access to cottage properties being developed, fuel wood lots and a dam that required servicing. It therefore undertook in this agreement to maintain and repair the crossing at its own risk and expense to the satisfaction of CN. The agreement also contained the following indemnity provision:

3. To at all times indemnify and save harmless the Railway from all loss, expense and liability howsoever incurred by the Railway, and the Licensee hereby waives this against the Railway all claims of whatsoever nature and kind, where such loss, expense, liability or claims arise directly or indirectly out of or are attributable to the exercise by the Licensee or others of the privileges herein granted and whether such loss, expense, liability or claims result from the negligence of the Railway, or otherwise.

[27] In my view, the trial judge was correct to interpret this clause to encompass the circumstance where CN is to be indemnified for its own negligence. The ordinary meaning of the language of the indemnity clearly extends to all loss expense and liability however incurred by CN. Moreover, in the context of this agreement such an interpretation makes commercial sense. The trial judge put it this way:

In this case, it was not unreasonable, on the evidence for the Railway to demand indemnification because it was gaining no benefit from the crossing agreement, but rather the Railway’s demands were to seek protection from liability, which might arise, as a result of this operation of this crossing, which was continued in operation for the benefit of the Ministry.

[28] In summary, therefore, all three MNR arguments fail and its appeal must be dismissed.

THE HART APPEAL

[29] The trial judge found that while Mr. Hart undertook from time to time to plough the road on a voluntary basis there was no evidence that he was aware of the icy conditions on the day of the accident. The trial judge concluded that Mr. Hart’s ploughing of the road prior to February 25, 1990 was not causally related to the accident and that his failure to salt or sand the incline on that day did not constitute negligence on his part. He also held that since Mr. Hart had no responsibility for or control over the condition of the crossing he was not an occupier for the purposes of the Occupier’s Liability Act.

[30] Mr. Hart was, however, familiar with the crossing, its poor visibility to the east and the short but steep grade of the road approaching it from the north. The trial judge framed his finding of a duty on Mr. Hart to warn Ms. Coulter of the dangers of the crossing in the following terms:

Mr. Hart owed Mrs. Coulter a duty as an invitee to use reasonable care to prevent injury or damage to her as a guest from unusual dangers known to him and also those dangers of which he should be aware.

Indermaur v. Dames (1866), L.R. 1 C.P. 274 at 288, affirmed at (1867) L.R. 2 C.P. 311 at 313 (adopted by the S.C.C. in Stewart v. Routhier 1974 144 (SCC), [1975], 1 S.C.R. 566 at 581.

In my view, he should have warned the plaintiff of the unusual nature of the crossing when approached from the north with its obstruction of view, the possibility of icy conditions and the steep grade. I am satisfied on the balance of probabilities that that failure to warn contributed to the damages occasioned by the plaintiff, Cindy Coulter.

[31] In my opinion, on the facts of this case the trial judge erred in imposing a duty to warn on Mr. Hart.

[32] The two cases relied on by the trial judge are cases of occupier’s liability, where the defendant occupied the premises posing an unusual danger which resulted in harm. The use of these authorities, together with the reference to the duty to Ms. Coulter as “an invitee” suggests that the finding of a duty to warn was based on principles of occupier’s liability. However, Mr. Hart was not an occupier of the crossing, nor did he exercise any responsibility for or control over it. It follows that he did not have a duty to warn Ms. Coulter pursuant to the Occupier’s Liability Act.

[33] Nor do I think that on these facts a common law duty to warn could be assigned to Mr. Hart on the basis of the general approach to duty of care set out in City of Kamloops v. Nielsen, 1984 21 (SCC), [1984] 2 S.C.R. 2. While it is unclear whether the trial judge adopted this approach, any such analysis must proceed against the backdrop of the reluctance of the common law to impose a duty on a person to take action to assist another who is facing a risk of harm that the person played no part in creating. See Linden, Canadian Tort Law 6^th Edition at p.284.

[34] The two stages of the Kamloops test were set out by Wilson J. at pp. 10-11:

(1) is there a sufficiently close relationship between the parties (the [defendant] and the person who has suffered the damage) so that, in the reasonable contemplation of the [defendant], carelessness on its part might cause damage to that person? If so,

(2) are there any considerations which ought to negative or limit (a) the scope of the duty and (b) the class of persons to whom it is owed or (c) the damages to which a breach of it may give rise?

[35] While I recognize that the first of these steps presents a relatively low threshold, I do not think that threshold is crossed in the circumstances of this case.

[36] Mr. Hart played no part in the creation of the risk of harm presented by the crossing. He had no responsibility for or control over it. Ms. Coulter was on her way home three miles from the Lodge when she reached the crossing. The road to the crossing was not used only by guests of the Lodge, but by cottagers and members of the public as well. Mr. Hart was unaware of any icing problems on the road that day.

[37] Taking these factors together, I do not think that there was a sufficiently close relationship between Mr. Hart and Ms. Coulter with respect to any risk posed by the crossing that in the reasonable contemplation of Mr. Hart, carelessness on his part might cause her damage. Thus I conclude that Mr. Hart was under no duty of care to warn her in this case.

[38] Were it necessary, I would also find that at the second stage of the analysis, policy considerations exist which must eliminate any such duty here. There is an indeterminacy to the class to whom any such duty might be owed – guests, suppliers, members of the public who use the road or who might do so, etc. There is also an indeterminacy to its geographical scope – how far beyond three miles might it extend? Against the backdrop of the reluctance of the common law to impose a duty to act on an innocent bystander, such indeterminacy is a sufficient policy basis to conclude that it would not be just to impose a duty of care on Mr. Hart in these circumstances.

[39] I would therefore allow the Hart appeal and order that the action by the plaintiffs and the cross-claims by CN and MNR be dismissed as against Mr. Hart.

[40] In the result, the appeals of CN and MNR are dismissed. The appeal of Mr. Hart is allowed. The judgment below is amended to reflect the full apportionment of fault between CN and MNR in the ratio of 35 to 55 subject to the indemnity. The costs order below is amended by changing paragraph 8(a) to give Mr. Hart his trial costs on a party-and-party basis against his co-defendants.

[41] Mr. Hart is entitled to his costs of the appeal from his co-defendants. Following the apparent logic of the order at trial, the indemnity between CN and MNR would appear to permit CN to recover its share of these costs from MNR and it is so ordered.

Released: November 15, 2000 “RRM”

“S.T. Goudge J.A.”

“I agree R.R. McMurtry C.J.O.”

“I agree Robert Sharpe J.A.”