CITATION: Donley Investments Limited v. Canril Corporation, 2011 ONCA 625
DATE: 20111005
DOCKET: C52591
COURT OF APPEAL FOR ONTARIO
Winkler C.J.O., Sharpe J.A. and Cunningham A.C.J. (ad hoc)
BETWEEN
Donley Investments Limited
Plaintiff (Respondent)
and
Canril Corporation, 1248616 Ontario Inc., Arctic Demolition Ltd. and Ralph Leibe, carrying on business as Leibe Engineering Associates
Defendants (Appellants)
Michael S. Hebert and Cheryl Gerhardt McLuckie for the appellants
Marc C. Doucet and Andrew D. Ferguson for the respondents
Heard: September 27, 2011
On appeal from the judgment of Justice Monique Métivier of the Superior Court of Justice dated July 22, 2010, with reasons reported at 2010 ONSC 4134.
ENDORSEMENT
[1] This is an appeal from a judgment holding the appellants liable in negligence and nuisance for water damage caused to the basement of the respondent’s building. The respondent alleged that its basement suffered damage as a result of water flowing from the neighbouring property owned by the appellants.
[2] The appellants argue that the trial judge erred both in law and in fact and ask us to set aside the trial judgment and order a new trial.
[3] In our view, the judgment cannot stand because of three significant legal errors. As those legal errors are fatal to the judgment, we need not address the appellants’ submission that the trial judge also made palpable and overriding errors of fact.
1. Shifting the burden of proof
[4] At paragraph 107 of her reasons, the trial judge stated:
The defendants had a duty to protect their neighbour. They did not do so. This raises a presumption of negligence despite the fact that there has been no scientific confirmation of causation. The defendants have not rebutted that presumption.
[5] In our view there was nothing in the facts of this case that would justify shifting the burden of proof or finding what the trial judge described as a “presumption of negligence”: see Fontaine v. British Columbia (Office Administrator), 1998 CanLII 814 (SCC), [1998] 1 S.C.R. 424.
[6] The respondent did not provide compelling evidence to demonstrate that the water had migrated from the appellants' building to its own. Nor was there strong evidence of fault on the part of the appellants. We take the trial judge at her word that this was a case that turned on the burden of proof. By improperly shifting that burden and finding against the appellants on the basis that they had not rebutted a presumption of fault, the trial judge made a significant error of law.
2. Improper imposition of a duty to assert a claim on behalf of the respondents against the city.
[7] The trial judge erred in finding that the appellants had a duty to join the respondent in their claim against the city for the water infiltration that took place in late February 2003.
[8] The most significant infiltration of water into the basement of the respondent’s building occurred in late February 2003. The appellants had turned off all services to their building. An open city water main caused an infiltration of water into the basements of both the appellants’ and the respondent’s buildings. The trial judge held that the appellants’ were not liable to the respondent in either nuisance or negligence with respect to that infiltration.
[9] The appellants made a claim against the city for the damage to their basement and suggested to the respondent that it do the same. The respondent refused to do so. The trial judge found, at para. 108, that the appellants “had a duty to their neighbours to join them in [their] claim to ensure they could recover from the City for the damages caused by the open water main”. The trial judge held that this omission was “actionable on the basis of negligence.” In the result, despite finding that the appellants had not negligently caused the damage to the respondent’s basement in February 2003, the trial judge, by way of this alleged duty, nonetheless, held the appellants liable in negligence to the respondent for the damage caused.
[10] We fail to see how the appellants could have asserted a claim on behalf of the respondent. Nor do we see any legal basis for the trial judge’s imposition of a duty to assert such a claim. This error is fatal to any finding against the appellants with respect to the February 2003 infiltration.
3. Faulty causation analysis
[11] The trial judge erred in her causation analysis. In her reasons for judgment, she recognized that the evidence establishing a causal link between the damage to the respondent’s building and any fault or wrong committed by the appellants was not strong and certainly was not made out on the basis of expert or scientific evidence. In her analysis of the applicable law, the trial judge did not refer to the standard “but for” test for causation. Rather, she held, citing Athey v. Leonati, 1996 CanLII 183 (SCC), [1996] 3 S.C.R. 458, that causation could be established on the basis of material contribution to the occurrence of the injury that was greater than de minimis. In our view, the facts of this case do not justify deviating from the standard “but for” test for causation: Resurfice Corp. v. Henke, 2007 SCC 7, [2007] 1 S.C.R. 333. It follows that the trial judge erred in law by applying a more lenient test.
Conclusion
[12] While all three errors specifically concern the trial judge’s finding of liability on the basis of negligence, we do not agree with the submission that the judgment can be sustained on the basis of nuisance alone. The trial judge expressly excluded liability for nuisance with respect to the most significant infiltration of water that occurred in late February 2003 for which the city was responsible. We are unable to conclude that all of the damage to the respondent’s building resulted from the post-February 2003 infiltration or that none of it resulted from the February 2003 infiltration. Moreover, the judgment does not specify what quantum of damages flowed from each infiltration, and indeed, on the record before us, we are not persuaded that it would be possible to do so. As it is impossible to assign a specific quantum of damages to either the February 2003 negligence claim or to the post-February 2003 nuisance claim, the trial judge's legal errors with respect to negligence are fatal.
[13] Accordingly, we allow the appeal, set aside the trial judgment and order a new trial.
[14] The appellants are entitled to their costs of this appeal fixed at $20,000 inclusive of disbursements and applicable taxes. The costs of the first trial are left to the discretion of the judge hearing the new trial.
“W. Winkler C.J.O.”
“Robert J. Sharpe J.A.”
“Cunningham A.C.J.”