Street v. Ontario Racing Commission et al. [Indexed as: Street v. Ontario Racing Commission]

88 O.R. (3d) 563

Court of Appeal for Ontario,

Weiler, Cronk and Blair JJ.A.

January 10, 2008

Torts -- Negligence -- Duty of care -- Plaintiff injured when thrown from horse at racetrack -- Plaintiff's worker's compensation claim denied because trainer who hired him failed to maintain coverage as required by Rules of Thoroughbred Racing -- Plaintiff suing trainer, Ontario Racing Commission (which promulgated Rules) and owner of racetrack -- Action allowed only as against trainer -- Trial judge not erring in finding that Commission and owner did not owe duty of care to plaintiff.

The plaintiff suffered very serious injuries when he was thrown while exercising a horse at a racetrack. His claim for worker's compensation was denied because L, the trainer who had hired him to ride the horse, failed to maintain coverage for him as he was required to do by rule 29.09 of the Rules of Thoroughbred Racing, promulgated by the Ontario Racing Commission. The plaintiff sued L, the Commission and the Ontario Jockey Club (the owner of the racetrack) for damages equal to the amount of worker's compensation benefits to which he would have been entitled had coverage been maintained. He succeeded only against L. He appealed the dismissal of his claim against the Commission and the OJC.

Held, the appeal should be dismissed.

The trial judge did not err in concluding that while the plaintiff's loss was foreseeable to the Commission, the Commission did not owe a private law duty of care to the plaintiff to ensure that its rules were followed. The only source of the Commission's powers and duties was its governing statute, the Racing Commission Act, R.S.O. 1990, c. R.2. The Commission's implied statutory mandate was to serve the interests of all Ontario in the public interest. Rule 29.09 placed the obligation of compliance on trainers. To hold that the Commission had a duty to ensure compliance would transfer that obligation back to the Commission and override its decision to place that obligation elsewhere. The fact that the Commission enforced its rules through prosecutions for violation did not mean that it had a duty to ensure compliance with its rules. The statutory discretion given to the Commission by the Act permitted, but did not require, enforcement. The Commission's decision respecting the extent of compliance required it to consider a myriad of objectives consistent with public rather than private law duties. [page564]

Insofar as the OJC was concerned, it was not under a duty to enforce Rule 29.09. The OJC did not owe a duty of care to the plaintiff.

APPEAL from the judgment of MacDonald J., [2005] O.J. No. 3908, [2005] O.T.C. 808 (S.C.J.), allowing an action against one defendant and dismissing it as against the other defendants.

Cases referred to

Anns v. Merton London Borough Council, [1978] A.C. 728, [1977] All E.R. 492, [1977] 2 W.L.R. 1024 (H.L.); Odhavji Estate v. Woodhouse, [2003] 3 S.C.R. 263, [2003] S.C.J. No. 74, 233 D.L.R. (4th) 193, 312 N.R. 305, 2003 SCC 69, 19 C.C.L.T. (3d) 163, 11 Admin. L.R. (4th) 45 (sub nom. Odhavji Estate v. Metropolitan Toronto Police Force), apld Other cases referred to Childs v. Desormeaux, 2006 SCC 18, [2006] 1 S.C.R. 643, [2006] S.C.J. No. 18, 266 D.L.R. (4th) 257; Cooper v. Hobart, [2001] 3 S.C.R. 537, [2001] S.C.J. No. 76, 96 B.C.L.R. (3d) 36, 206 D.L.R. (4th) 193, 277 N.R. 113, [2001] 11 W.W.R. 221, 2001 SCC 79, 8 C.C.L.T. (3d) 26 (sub nom. Cooper v. Registrar of Mortgage Brokers (B.C.) et al.); Donoghue v. Stevenson, 1932 536 (FOREP), [1932] A.C. 562, [1932] All E.R. Rep 1 (H.L.); Edwards v. Law Society of Upper Canada, 2001 SCC 80, [2001] 3 S.C.R. 562, [2001] S.C.J. No. 77, 56 O.R. (3d) 456n, 206 D.L.R. (4th) 211, 277 N.R. 145, 2001 SCC 80, 8 C.C.L.T. (3d) 153, 13 C.P.C. (5th) 35; Eliopoulos v. Ontario (Minister of Health and Long-Term Care) (2006), 2006 37121 (ON CA), 82 O.R. (3d) 321, [2006] O.J. No. 4400, 276 D.L.R. (4th) 411 (C.A.); Granite Power Corp. v. Ontario (2004), 2004 44786 (ON CA), 72 O.R. (3d) 194, [2004] O.J. No. 3257 (C.A.); Kamloops (City) v. Nielsen, 1984 21 (SCC), [1984] 2 S.C.R. 2, [1984] S.C.J. No. 29, 10 D.L.R. (4th) 641; L. (A.) v. Ontario (Minister of Community and Social Services), 2006 39297 (ON CA), [2006] O.J. No. 4673, 218 O.A.C. 150, 45 C.C.L.T. (3d) 207, 35 R.F.L. (6th) 56, 36 C.P.C. (6th) 265 (C.A.); Menow v. Jordan House Ltd., 1973 16 (SCC), [1974] S.C.R. 239, [1973] S.C.J. No. 80, 38 D.L.R. (3d) 105

Statutes referred to

Racing Commission Act, R.S.O. 1990, c. R.2 [rep.]

Authorities referred to

Ontario Racing Commission, Rules of Thoroughbred Racing, rule 29.09

Morris A. Singer, for appellant. Roger J. Horst and Faithlyn Hemmings, for respondent, Ontario Racing Commission. Robert A. Calder, for respondent, Ontario Jockey Club.

The judgment of the court was delivered by

WEILER J.A.: --

Overview

[1] The appellant, Kenneth E. Street, was thrown while exercising a horse at Woodbine Race Track in February 1993. He was seriously injured and now suffers from incomplete quadriplegia. The appellant's claim for Worker's Compensation ("WC") was [page565] denied on the basis that William Lane, the trainer who had hired him to ride the horse, failed to maintain coverage for him.

[2] Rule 29.09 of the Rules of Thoroughbred Racing makes it mandatory for trainers to provide coverage for their employees. These rules are promulgated by the respondent Ontario Racing Commission, the body created by statute to oversee and regulate horse racing in Ontario. The rule requires any person "who places any licensee in a horse related occupation on their payroll at the race track" to cover that person with WC insurance and to keep that person covered "throughout the time he/she is in their employ".

[3] The appellant sued Lane, the owners of the horse, the Ontario Jockey Club (which owns Woodbine Racetrack) and the Commission for damages equal to the amount of benefits to which he would have been entitled had his employer held WC coverage. He alleged that they each owed him a duty of care to ensure that he had WC coverage and had been negligent in the performance of that duty. The appellant succeeded only against Lane. He appeals the dismissal of his claim against the Commission and the Jockey Club.

[4] In relation to the Commission the trial judge held:

(a) The Commission did not owe a private law duty of care to the appellant to ensure that its rules were followed and, if it did, any such duty would be negated for policy reasons.

(b) If it did owe such a duty, the Commission's actions met the standard of care because of the prosecutions it conducted.

(c) The evidence did not establish that the Commission was the cause of the appellant's loss.

[5] In relation to the Jockey Club the trial judge found:

(a) There was no contractual or employment relationship of any nature between the appellant and the Jockey Club.

(b) The Jockey Club did not play any role in the Commission's decision to pass Rule 29.09.

(c) The Commission did not delegate to the Jockey Club the power to enforce the rule.

(d) There was no evidence to prove that the Jockey Club had any reason to believe that Lane provided incorrect WC information in the stabling application he submitted. [page566]

(e) The Jockey Club had no reason to believe or anticipate that the employees of Lane, including the appellant, would not be covered by WC.

(f) However, if it was under a duty of care to the appellant, the Jockey Club breached its duty, as it took no active steps to ensure coverage was in place.

The Parties' Arguments

[6] The appellant submits that the trial judge erred in holding that the Commission and the Jockey Club owed no private law duty of care to the appellant to enforce Rule 29.09. The appellant submits that, in addition to passing a rule making it mandatory for people such as Lane to have WC coverage, the Commission sought to enforce the rule and did so negligently. The appellant submits that the Commission was negligent because it did not obtain a clearance certificate from the WC Board confirming the existence of coverage. Rather, the Commission merely required a WC account number, which remains with an individual for life, notwithstanding that the account may not be in good standing or that coverage has lapsed.

[7] The Commission's position is that it did not owe a private law duty of care to the appellant. Even if it did owe such a duty, the trial judge's finding that it had discharged that duty is entitled to deference. The Commission required an applicant to provide his WC account number when applying for a licence. This application was then submitted to the Commission. On the first application for a licence, trainers were required to provide evidence that WC was in place at the time of application, for instance by providing an employer's statement of payroll. Thereafter, trainers were required to provide their WC number and to verify that they were in compliance with the Commission Rules.

[8] In addition, the Commission took other steps to ensure compliance. It prosecuted five violations of rule 29.09 in the first 18 months after it was passed and continued to prosecute all known violations of the rule. As the trial judge found, if Lane had obtained a clearance certificate at the time of his application in May 1992, it would have been valid for only 45 days and would not have been in force at the time of the accident. The appellant's submission that Lane would likely have gotten retroactive relief from the WC Board is not supported in the particular circumstances of this case.

[9] The Jockey Club required an applicant executing an application to stable horses on its facilities to provide a WC account number. The appellant submits that the Jockey Club similarly [page567] breached its duty of care to the appellant by not implementing any reasonable mechanism to ensure compliance with rule 29.09.

[10] The Jockey Club relies on the findings of fact of the trial judge (which are not in dispute) and his conclusion that it owed no duty of care to the appellant. The purpose of requiring an applicant to insert his or her WC number in a stabling application was to bring to the attention of the applicant the existence of rule 29.09. The Jockey Club was not involved in enforcing the rule. In addition, the Jockey Club submits that, like a rule of law, it had the right to expect that the Commission's rule would be obeyed.

Analysis

[11] The general test for a duty of care has its origin in the House of Lords' decision in Donoghue v. Stevenson, 1932 536 (FOREP), [1932] A.C. 562, [1932] All E.R. Rep 1 (H.L.), in which Lord Atkin recognized the existence of a duty to avoid foreseeeable harm to one's neighbours. "Neighbours" in this context, are "persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected". In Anns v. Merton London Borough Council, [1978] A.C. 728, [1977] All E.R. 492 (H.L.), Lord Wilberforce proposed a two- stage approach for determining whether a duty of care arises. The Supreme Court of Canada adopted this test in Kamloops (City of) v. Nielsen, 1984 21 (SCC), [1984] 2 S.C.R. 2, [1984] S.C.J. No. 29, at pp. 10-11 S.C.R., and recast it as follows:

(1) Is there "a sufficiently close relationship between the parties" or "proximity" to justify imposition of a duty?

(2) If so, are there policy considerations which ought to negate or limit the scope of the duty, the class of persons to whom it is owed or the damages to which breach may give rise?

[12] The Anns analysis need not be undertaken in every case. If, having regard to precedent, the category of relationship is one giving rise to a duty of care, proximity may be inferred and if the risk of injury was foreseeable, a prima facie duty of care will arise: Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, [2001] S.C.J. No. 76. In this case, since the claim is a new category of claim, there is no dispute that it is necessary to undertake the Anns analysis.

[13] The Supreme Court of Canada affirmed the Anns test in Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263, [2003] S.C.J. No. 74, but separated foreseeability and proximity as separate elements at the first stage. Odhavji did not change the Anns test, but clarified that proximity will not always be satisfied by reasonable foreseeability: Childs v. Desormeaux, 2006 SCC 18, [2006] 1 S.C.R. 643, [2006] S.C.J. No. 18, at para. 12. [page568] McLachlin C.J.C. on behalf of the court added:

What is clear is that at stage one, foreseeability and factors going to the relationship between the parties must be considered with a view to determining whether a prima facie duty of care arises. At stage two, the issue is whether this duty is negated by other, broader policy considerations.

[14] The respondents do not dispute that the appellant's loss was foreseeable. The appellant was part of a distinct group of persons who would potentially be injured and would suffer damage if rule 29.09 was not followed. Inasmuch as foreseeability of harm is present, I must therefore next consider "factors going to the relationship between the parties". As stated in Cooper, supra, at para. 34, "the expectations, representations, reliance and the property or other interests involved" must be considered to determine whether the relationship is close enough that it is "just and fair having regard to the relationship to impose a duty of care in law upon the defendant". See also Childs, supra, at para. 25. Thus, the question is what, if anything, links the Commission and Jockey Club to third-party exercise riders such as the appellant.

[15] This is not a situation where the appellant has suffered personal injury as a result of the actions of a person benefiting financially from service to the public at large, such as the service of alcohol, as in Menow v. Jordan House Ltd., 1973 16 (SCC), [1974] S.C.R. 239, [1973] S.C.J. No. 80. The Commission did not offer a service to the public at large from which it benefited. The Jockey Club does offer a service to the public at large, the stabling of horses and the provision of exercise facilities, but the appellant does not submit that this service created or enlarged the risk that he would suffer damage if he was not covered by WC. Nor is this a situation where a person owing a fiduciary duty to another has assumed control over the actions of the person to whom the duty is owed.

[16] One case-specific factor applicable in this situation is the existence of a statute regulating the activity in question. The statute does not specifically state that those who breach the statutory duty imposed on them should be liable to the individuals affected. More importantly, in regulatory cases involving pure economic loss, a legislative intent not to impose a private law duty of care has been inferred: Edwards v. Law Society of Upper Canada, 2001 SCC 80, [2001] 3 S.C.R. 562, [2001] S.C.J. No. 77 and Cooper v. Hobart, supra.

[17] The trial judge examined the statutory scheme of the governing statute at the time, the Racing Commission Act, R.S.O. 1990, c. R.2, and found that as in Cooper, the only source of the Commission's powers and duties was its governing statute. The [page569] Commission's implied mandate by statute was to serve the interests of all Ontario in the public interest. Rule 29.09 placed the obligation of compliance on trainers. To hold that the Commission had a duty to ensure compliance would transfer that obligation back to the Commission and "override its decision to place that obligation elsewhere". I would agree.

[18] The appellant submits that even if the legislature did not intend for the Commission to be under a duty to ensure compliance with its rules, once the Commission began enforcing its rules through prosecutions for violation, it was under a duty to ensure compliance by obtaining a clearance certificate from the WC Board or be held liable in negligence. I would respectfully disagree with this conclusion. The statutory discretion given to the Commission by the Racing Commission Act permits, but does not require, enforcement. The Commission's decision respecting the extent of compliance required it to consider a "myriad of objectives consistent with public rather than private law duties" as stated in Edwards, supra, at para. 14. See also L. (A.) v. Ontario (Minister of Community and Social Services), 2006 39297 (ON CA), [2006] O.J. No. 4673, 218 O.A.C. 150 (C.A.), Eliopoulos v. Ontario (Minister of Health and Long-Term Care) (2006), 2006 37121 (ON CA), 82 O.R. (3d) 321, [2006] O.J. No. 4400 (C.A.), and Granite Power Corp. v. Ontario (2004), 2004 44786 (ON CA), 72 O.R. (3d) 194, [2004] O.J. No. 3257 (C.A.), where this court also rejected the imposition of a private law duty of care on the public body in issue on the basis that the claims were at odds with the particular public body's statutory duty to the public as a whole and required a balancing of constituent interests.

[19] Insofar as the Jockey Club is concerned, it was not under a duty to enforce rule 29.09. Merely requiring the applicant's WC number did not create such a duty.

[20] Moreover, while the appellant's counsel submitted in oral argument that the appellant relied on the Commission and Jockey Club to ensure compliance with rule 29.09, there is no evidence before us to that effect or that the Commission or the Jockey Club made any representations to the appellant to engender reliance that compliance with rule 29.09 was ensured.

[21] The trial judge did not err in concluding that while the appellant's loss was foreseeable to the Commission, there was not sufficient proximity between them to create a duty of care to ensure that its rules were followed. The evidence does not establish a close relationship between the Commission and the appellant. Similarly, the trial judge did not err in dismissing the appellant's claim against the Jockey Club. In view of these conclusions, I need not engage in any further analysis. [page570]

Disposition

[22] Accordingly, I would dismiss the appeal. At the conclusion of this appeal, the respondents advised that if they were successful they would not seek costs. Accordingly, I would make no award as to costs.

Appeal dismissed.