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.:
[1] In 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.
[2] On 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.
[3] In 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.
[4] The 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.
[5] The 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.
[6] The 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.
[7] The action was dismissed against the five remaining
defendants, but they were awarded no costs.
[8] The 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
[9] On 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.
[10] When 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.
[11] As 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.
[12] Throughout 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.
[13] After 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.
[14] The 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.
[15] Jennifer 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.
[16] After 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.
[17] Ms. 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.
[18] On 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.
[19] At 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.”
[20] The 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.
[21] Mr. 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.
[22] The 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.
[23] Mr. 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.
[24] Mr. 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.
[25] The 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.
[26] Reginald 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.
[27] On 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.
[28] In 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.
[29] These 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.
[30] Although 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.
[31] In 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.
[32] In 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.
[33] These 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.”
[34] Mr. 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’.
[35] Because 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.”
[36] On 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
[37] The 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.
[38] Notwithstanding 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.
[39] Following 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.
[40] I 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.
[41] As 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.
[42] I 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.
[43] The 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.
[44] The 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.
[45] The 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.
[46] The 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.
[47] The 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.
[48] They 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.
[49] The 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.
[50] The 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.).
[51] The 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”.
[52] Cory 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.
[53] I 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.
[54] Even 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.
[55] The 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.
[56] That 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.
[57] Yet 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).
[58] Mr. Gallagher acknowledged that he knew in December 1994
that the Municipality might be liable, yet no action was brought
against it until May 1995.
[59] And, 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.
[60] In 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.
[61] He 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.
[62] In 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.
[63] The appeal by the Municipality is therefore allowed, and the
order against it set aside.
[64] As 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.
[65] The 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.
[66] Similarly, 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.
[67] The 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.
[68] The cross-appeal by Mr. Watson and Mr. Gallagher is
dismissed without costs.
Released: “July 7, 2000 RSA”
“R.S. Abella J.A.”
“I agree S. Goudge J.A.”
“I agree J.C. MacPherson J.A.”