Court of Appeal for Ontario

Date: November 21, 2017

Docket: C60221

Judges: Feldman, Cronk and Miller JJ.A.

Between

Tyler House (also known as Tylor House) by his Litigation Guardian Gail House, The Estate of Titus House, Gail House, and Titus House Jr.

Plaintiffs (Appellant / Respondent by way of cross-appeal)

and

Donald Baird, Robert Scott Murray and The Corporation of the Township of Wilmot

Defendants (Respondents / Appellant by way of cross-appeal)

Counsel

Allan Rouben, for the appellant/respondent by way of cross-appeal

Daniel I. Reisler, for the respondent/appellant by way of cross-appeal Donald Baird

James H. Bennett, for the respondent The Corporation of the Township of Wilmot

Heard: April 11-12, 2017

On appeal from: the judgment of Justice James Kent of the Superior Court of Justice, dated February 26, 2015.

Feldman J.A.:

A. Introduction

[1] On a winter night in 2009, the appellant House was driving his friend Baird's car in rural Ontario. Three other friends, including Baird, were passengers in the car. When House lost control of the car, it moved over into the oncoming lane at the same time as another car was approaching in that lane. The other car hit House's car, killing one friend in the back seat and injuring House and his other two friends in the car.

[2] In the action by House, the trial judge found House, as the driver, and the respondent Baird, as owner of the car, which had worn and defective tires, equally liable for causing the accident and for House's injuries. The other driver, Murray, and the respondent municipality were absolved of any liability for the accident.

[3] House appeals the decision of the trial judge on three issues: (i) the liability of the respondent municipality; (ii) the apportionment of fault as between himself as the driver and Baird as the owner of the car; and (iii) the failure of the trial judge to adjust the discount rate applicable to the damages calculation.

[4] With respect to costs, the trial judge declined to give effect to an offer to settle by Baird, and made a modified Sanderson order requiring Baird to pay one half of the costs of the respondent municipality. The respondent Baird seeks leave to cross-appeal the costs disposition of the trial judge.

[5] For the reasons that follow, I would dismiss House's appeal on all three issues. I would also dismiss the application for leave to appeal costs.

B. Facts

(1) The accident

[6] On the evening of February 25, 2009, four young men, long-time friends, drove west from Kitchener along Huron Road. The appellant, House, was the driver. The car, a 1992 Toyota Tercel, belonged to the respondent Baird, who was sitting in the back seat behind the driver. The other two passengers were Tomlinson in the front passenger seat and Samms in the back behind him.

[7] In the Township of Wilmot, just west of the intersection with Pinehills Road, Huron Road takes a long descent leading to a dip in the road, then a crest, followed by a further descent.

[8] Just after 9:00 p.m., House's vehicle went out of control at or close to the crest. The rear of the vehicle swung forward, the vehicle slid sideways into the opposite lane and continued downhill in a westerly direction. At the same time, the respondent Murray was driving from the west in that lane. He saw House's vehicle go out of control but was unable to avoid the collision. The front of Murray's vehicle hit the rear passenger side of House's car, killing Samms and seriously injuring Baird and House and injuring Tomlinson, but less seriously.

(2) The weather on the night of February 25

[9] The forecast that evening was for a 40% chance of rain and snow, which Dr. James Young, an environmental consultant and weather specialist, said could be a mixture of rain and snow. There was no warning of freezing rain from Environment Canada and no forecast for sleet or freezing rain though, despite this, freezing rain could still occur. Dr. Young acknowledged there was a probability that freezing rain occurred at or near the accident scene less than one hour before the accident.

[10] Baird said it was snowing "quite a bit", the snow was mixed with rain and as the vehicle approached the scene of the accident, the snow was "coming down heavily". However, according to Murray, it was snowing earlier in the evening, and later misting, but by the time of the accident it was no longer misting. While he said there was some slush on the road, he had turned off his windshield wipers and the temperature was above freezing.

[11] Two nearby residents also described the weather that night. Peter Moir drove past the accident scene shortly after the crash and described the night as "dark and wet with a misty rain". Lloyd Fretz said the weather that day was cold and wet. He saw lights at the accident scene, went out from his residence and noticed "drizzling rain".

(3) The road conditions on the night of February 25

[12] The trial judge noted that, while Dr. Young's evidence supported the probability that ice had formed at the accident scene prior to the crash, nobody was able to say with certainty that there was ice on the road at the point where the accident occurred.

[13] Baird said he thought the vehicle must have been on ice, because it did not respond to House's attempts at control. However, Murray said there was some, but not significant amounts of slush at the accident scene, and that he had no trouble coming to a full stop at a stop sign before the accident. He said he would have slowed down, had he had concerns about the road surface.

[14] A number of police constables, firefighters and paramedics described the conditions in different ways. According to various first responders, the road was: quite slippery; fairly slippery; black ice; a little slippery; slush and ice covered; a little slick; icy; slippery on the way to scene; icy at the scene; and, slippery.

[15] Similarly, the nearby residents also offered differing descriptions. Mr. Moir said the road surface at the accident scene was wet but he did not recall slipping or sliding. Mr. Fretz said the road was slippery and icy and that every year someone slides into the ditch on Huron Road, but opined that the street could be driven safely, even in bad weather.

[16] Chad Gravill, who lives nearby and, as a volunteer firefighter captain, attended at the scene, had coincidentally passed through the scene of the accident earlier in the evening. He said he had not experienced icing in that area before and, that night, drove his vehicle safely and without difficulty.

[17] John Mondy, a regional road patroller, testified that he logged the following as conditions for other roads within two miles of the accident: track bare; bare and wet; bare and wet. These observations were made between 9:01 p.m. and 9:15 p.m.

(4) Events prior to the accident

(a) Baird's worn tires

[18] Baird's vehicle was a 1992 Toyota Tercel. The rear tires on the car were worn beyond acceptable limits. The front and rear tires were mismatched and over-inflated. According to a motor vehicle collision reconstruction expert, the condition of the rear tires meant that the vehicle had reduced traction and stability, and therefore reduced control. The expert said that the vehicle was not safe to be driven on anything but a clear, dry road. The trial judge noted that counsel for Baird "virtually conceded" that the tires on the vehicle may have contributed to House's loss of control.

(b) Distracted driving – House's girlfriend's pregnancy

[19] Earlier that day, House's 16-year old girlfriend had told him that she was pregnant with their child. House was upset about it and, according to Baird, he "flipped out". The trial judge found that, while the evidence was unclear as to whether House and his girlfriend fought about whether she should have an abortion, the fact of the pregnancy was "certainly on his mind" that evening.

(c) Distracted driving – marijuana

[20] Baird testified that everyone in the car was smoking marijuana that evening. He said they each smoked three or four "bowls". Baird said that Tomlinson, who was sitting in the front passenger seat, lit the pipe and held it to House's mouth so that House could smoke the marijuana while he was driving. While Tomlinson denied that they had been smoking marijuana, it is clear that evidence was not accepted by the trial judge.

(5) Winter road maintenance

[21] Wilmot Township is a rural municipality with a population of approximately 13,000. It has no roads classified higher than Class 3, with 247.2 two-lane kilometers of similar and lower class roads. Huron Road is a Class 3 road. Wilmot's roads department has a foreman/supervisor and seven full-time employees who operate seven plows and salters during the winter months. Those individuals normally work from 6 a.m. to 2 p.m. during the week, but would come in at other times if required by weather and road conditions.

[22] After-hours, someone is on-call. That person goes on patrol if a weather event requires attention or a complaint or call is received from the police. The on-call operator monitors the weather from home after-hours. The person on-call would perform any work as needed or organize a crew to do so. Normally, the on-call operator would call the supervisor to discuss whether to call out staff.

[23] On the night of February 25, Dave Tomlinson was on-call. Ordinarily, Wilmot receives weather forecasts four times a day at its operations centre. Tomlinson did not recall seeing a weather chart that day. Monitoring the weather from his home in Baden in Wilmot Township that evening, he noticed a brief snowfall "a little after dinner". However, the snow was melting on contact; this left the surface "slightly wet" but he did not consider it a situation where he needed to patrol or contact any other operators.

[24] At 9:30 p.m., after being called by the police to come and close the road after the accident, Dave Tomlinson noted it was drizzling heavily, though "not quite rain". Later that night, after midnight, he was called again by police for slippery conditions at the accident scene. By that point the temperature had dropped. Tomlinson found some slippery sections, including at the accident scene, and he applied salt that he was carrying in his vehicle.

(6) Road maintenance standards

[25] The Minimum Maintenance Standards for Municipal Highways, O. Reg. 239/02 ("MMS"), enacted under the Municipal Act, 2001, S.O. 2001, c. 25 (the "Act"), sets out minimum standards of highway maintenance, which vary depending on the class of highway.

[26] Highways are classified under the MMS according to their: (i) average annual daily traffic; and (ii) speed limit. The busiest highways with the highest speed limits would be Class 1. The least used highways with the lowest speed limits would be Class 6. Class 1 highways have the most stringent maintenance requirements, for example in terms of patrol frequency, clearing of snow and treatment of ice. The requirements are relaxed as the class number increases, and the MMS does not apply to Class 6 highways: see MMS, s. 2(3). As noted above, Huron Road was a Class 3 highway.

[27] In the opinion of Neil Bigelow, a motor vehicle reconstruction expert called by House, an operator should have been patrolling the local roads to monitor the driving conditions and respond as necessary. Bigelow noted that the section of the road where the accident occurred featured a downhill grade and shading from trees, meaning it would not get as much heat as an unshaded, flat road. However, Bigelow conceded that a Class 3 road such as Huron would not receive the same service as a Class 1 road and that the MMS imposed no duty to patrol in the circumstances of this case.

[28] Brian Malone was the expert called by Wilmot. He gave the opinion that Wilmot's procedures were reasonable, conformed with the MMS and were consistent with those of other lower-tier rural municipalities (see para. 38 below). He noted that having an on-call operator after-hours was very common. Dave Tomlinson's decision to take no action was consistent with the forecast and his observations. Malone noted that the MMS imposed no requirement for winter patrolling. Rather, for Class 3 roads, the MMS required an icy roadway to be treated "as soon as practicable" and within eight hours after the town became aware of its icy state.

[29] The trial judge preferred the evidence of Malone. Bigelow's evidence would, in Malone's view, impose a duty of "ensuring driver safety". The trial judge observed that while this is a laudable aspiration, it is not a legal obligation. He concluded that Wilmot had in place an adequate system for winter road maintenance.

C. Findings by the trial judge regarding the weather, the roads and Wilmot's liability for the accident

(1) The weather and the roads

[30] Following his review of the evidence on these two issues, described above, the trial judge concluded: (i) "that unanticipated ice formed on Huron Road at or near the scene of the collision less than one hour before the accident occurred and that the ice had melted or was melting into slush at the time of the accident"; and (ii) "regardless of whether a patch or patches of ice remained at the accident scene at the time of the collision, the condition on Huron Road was slippery, at least in spots."

(2) Liability of Wilmot

[31] The trial judge found that Wilmot had an adequate system for call-out for winter maintenance of its roads. Further, although the regional standards required that "areas of concern" be patrolled, the trial judge found that the evidence did not support a finding that the section of Huron Road where the accident occurred was an area of concern. Nor was the township required to conduct a regular patrol for speculative purposes. As a lower-tier rural municipality, Wilmot was not obliged to adhere to the same standards as a regional municipality or a provincial ministry. Finally, because the section of Huron Road where the accident occurred was not identified as highly dangerous, even if Tomlinson had conducted an evening patrol, he may not have been at the relevant spot within the hour before the accident to address any ice that may have been there.

[32] The trial judge therefore concluded that there were too many "what ifs" to be able to find a breach of duty by the township or that any such breach caused the accident.

D. The Appeal: Issues and analysis

(1) Issue 1: Did the trial judge err in law by failing to find that Wilmot breached its statutory duty to keep Huron Road in a reasonable state of repair?

[33] The appellant submits that the trial judge erred in his approach to the analysis of the standard of care of a municipality that is statutorily mandated by s. 44 of the Act, and thereby erred in law by failing to find that the municipality did not meet its statutory duty to keep Huron Road in a reasonable state of repair.

The law regarding winter road maintenance

[34] Sections 44(1) to 44(4) of the Act provide:

44 (1) The municipality that has jurisdiction over a highway or bridge shall keep it in a state of repair that is reasonable in the circumstances, including the character and location of the highway or bridge.

(2) A municipality that defaults in complying with subsection (1) is, subject to the Negligence Act, liable for all damages any person sustains because of the default.

(3) Despite subsection (2), a municipality is not liable for failing to keep a highway or bridge in a reasonable state of repair if,

(a) it did not know and could not reasonably have been expected to have known about the state of repair of the highway or bridge;

(b) it took reasonable steps to prevent the default from arising; or

(c) at the time the cause of action arose, minimum standards established under subsection (4) applied to the highway or bridge and to the alleged default and those standards have been met.

(4) The Minister of Transportation may make regulations establishing minimum standards of repair for highways and bridges or any class of them.

[35] The proper approach to applying s. 44 was set out in this court's decision in Fordham v. Dutton-Dunwich (Municipality), 2014 ONCA 891, 327 O.A.C. 302, at para. 26, as follows:

Case law has established a four-step test for analyzing this statutory cause of action against a municipality.

1. Non-repair: The plaintiff must prove on a balance of probabilities that the municipality failed to keep the road in question in a reasonable state of repair.

2. Causation: The plaintiff must prove the "non-repair" caused the accident.

3. Statutory Defences: Proof of "non-repair" and causation establish a prima facie case of liability against a municipality. The municipality then has the onus of establishing that at least one of the three defences in s. 44(3) applies.

4. Contributory Negligence: A municipality that cannot establish any of the three defences in s. 44(3) will be found liable. The municipality can, however, show the plaintiff's driving caused or contributed to the plaintiff's injuries. [Footnotes omitted.]

[36] The determination that a road is in a state of non-repair is contextual and fact-driven. The context includes the "character and location" of the road: see the Act, s. 44(1); and Lloyd v. Bush, 2017 ONCA 252, 9 M.V.R. (7th) 177, at para. 69. Maintenance standards are not as stringent for rural roads with low traffic volumes. As this court recently stated in Lloyd, at para. 70:

The jurisprudence is clear that a lower standard will apply with respect to the state of repair on a low-traffic rural roadway than on higher-traffic thoroughfares and highways. The character and population of the area are to be considered as well as the amount of traffic using the road. [Citations omitted.]

[37] The concept of reasonableness is also inherent in the statutory defence in s. 44(3)(b): "[t]he steps to be taken by a municipality need only be within the range of what is reasonable in the circumstances": see Lloyd, at para. 82. The issue is "not whether something different or something more intensive could have been done – rather, the issue is whether the steps that the [municipality] did take were reasonable": see Ondrade v. Toronto (City) (2006), 23 M.P.L.R. (4th) 111 (Ont. Sup. Ct.), at para. 67.

[38] Ontario has three classes of municipalities: (i) single-tier; (ii) upper-tier; and (iii) lower-tier: see the Act, s. 1(1); and Ian Rogers, The Law of Canadian Municipal Corporations, loose-leaf, vol. 1, 2d ed. (Toronto: Thomson Reuters, 2017), at p. 21. An upper-tier municipality is comprised of and includes two or more lower-tier municipalities; a single-tier municipality is not part of an upper-tier municipality: see the Act, s. 1(1). The Township of Wilmot is a lower-tier municipality within the Regional Municipality of Waterloo, which is an upper-tier municipality.

[39] For purposes of the MMS, every highway under the jurisdiction of a municipality is classified from Class 1 to Class 6, as described earlier, based on speed limit and traffic volume: see MMS, s. 1(2). Section 5(1) of the MMS relates to icy roadways and at the time of the accident provided:

5. (1) The minimum standard for treating icy roadways is,

(a) to deploy resources to treat an icy roadway as soon as practicable after becoming aware that the roadway is icy; and

(b) to treat the icy roadway within the time set out in the Table to this section after becoming aware that the roadway is icy.

[40] The table referred to in s. 5(1)(b) lists "8 hours" as corresponding to a Class 3 highway. Therefore, for a Class 3 highway, such as Huron Road, s. 5(1)(b) would read "to treat the icy roadway within 8 hours after becoming aware that the roadway is icy."

[41] The Region of Waterloo also has a Winter Maintenance Policy and Procedures ("WMPP"), providing for specific measures to maintain the function of the road network in the winter. The WMPP defines "Concern Area" as:

Locations identified by the municipality that traditionally require winter maintenance in addition to or outside of normal winter maintenance applications. These areas can include but are not limited to bridge decks, shaded areas, steep vertical grades and tight horizontal curves.

The appellant's argument

[42] The appellant puts forth a number of arguments as to how the trial judge erred in failing to hold Wilmot liable: (i) by not deciding whether the road was in a state of disrepair, he failed to properly analyze the town's liability; (ii) he placed undue reliance on Wilmot's status as a lower-tier municipality; (iii) he erred by failing to find that a patrol was called for; (iv) he erred by relying on the MMS; (v) he erred by applying an unduly low standard of care to Wilmot; and (vi) he erred by stating that nobody was able to say with certainty that there was ice on the road and, in any event, a finding that there was ice on the road was not necessary to ground liability.

[43] When taken together, the appellant's arguments amount to a claim that the trial judge failed to apply the proper legal test, failed in his application of the applicable legal principles to the facts, and made erroneous findings of facts.

Analysis

[44] The trial judge instructed himself, based on Fordham, that a municipality's duty of repair is limited to maintaining its roads to enable ordinary drivers exercising reasonable care to use the roads safely: see Fordham, at paras. 28-30. He quoted the proper approach to analyzing and applying s. 44 from Fordham, referred to the MMS and reviewed a number of relevant cases, including: Greer (Litigation guardian) v. Kurtz, 2009 ONCA 865; The Queen (Can.) v. Saskatchewan Wheat Pool; Ferguson v. Brant (County), 2013 ONSC 435; Frank v. Central Elgin (Municipality), 2010 ONCA 574; Montani v. Matthews; MacMillan v. Ontario (Minister of Transportation & Communications); Bisoukis v. Brampton (City); Thornhill (Litigation guardian) v. Shadid; Giuliani v. Halton (Regional Municipality), 2011 ONCA 812.

[45] Having reviewed the evidence in detail and made his findings of fact, the trial judge then applied those findings against the statutory standard and found that the municipality had not breached its duty of care.

[46] The appellant's first argument is that the trial judge erred by failing to make a finding as to whether the highway was in a state of non-repair. He submits that, without making that finding, the trial judge then failed to put the onus on the municipality to prove one of the three defences in s. 44(3).

[47] I do not accept this submission. Based on the evidence he accepted, the trial judge made the factual findings that: (i) unanticipated ice had formed on the section of Huron Road at or near the accident scene less than one hour before the collision; (ii) the ice had melted or was melting into slush at the time of the accident; and (iii) the condition of the road was slippery. This amounts to a finding that the municipality failed to keep the road in a reasonable state of repair. Subject to the findings of contributory negligence, the trial judge proceeded on the basis that the slippery conditions caused or contributed to the accident.

[48] The trial judge also determined whether Wilmot had established any of the three statutory defences under s. 44(3) of the Act. His conclusions amounted to a finding that Wilmot had met each of the three defences. First, it could not reasonably have known about the state of non-repair on Huron Road for two reasons: (i) the formation of ice was unanticipated by the weather forecast for that day; and (ii) the affected section of Huron Road was not an area of concern that the Township would have focused on for a patrol, had it been concerned about the weather. Second, the township's system for winter road maintenance was a reasonable one for a lower-tier municipality, and the steps taken by the township that night were in accordance with its system for winter road maintenance. And third, as the MMS for a Class 3 highway only required that a municipality treat an icy highway within eight hours of becoming aware that the highway was icy, Wilmot had met that standard.

[49] The appellant argues that the municipality actually took no steps to maintain the road that night: it did not monitor the weather or go out on patrol. However, as the trial judge found, the municipality followed its system of from-home, after-hours monitoring by the on-call official. The trial judge noted that Tomlinson had completed a training course. He accepted the opinion of the expert Malone, who said that the actions of Tomlinson were reasonable in monitoring the snowfall and deciding there was no need for a patrol. These are findings of fact or mixed fact and law by the trial judge based on the evidence. There is no basis for this court to overturn those findings.

[50] The appellant's second argument is that the trial judge put undue emphasis on the fact that Wilmot is a lower-tier municipality with Class 3 roads, when the problem was that Tomlinson did not monitor the weather reports or conduct a patrol. Again, I would not give effect to this argument. As stated above, the trial judge accepted that Tomlinson acted in accordance with Wilmot's system for after-hours monitoring, and that the system was a reasonable one. In any event, the weather event that occurred was unanticipated, and therefore there was no basis to find that any failure to monitor weather reports was causative of the decision not to patrol.

[51] The appellant's third argument is that the trial judge erred by finding that a patrol was not called for. He submits that the relevant area of Huron Road was shaded and has a downhill grade, which are two of the factors identified in the WMPP of the region that could lead a municipality to identify an area as an area of concern. However, there was no evidence that the municipality had so identified this area. Again, the appellant is effectively asking this court to reassess the evidence and reverse a factual finding by the trial judge.

[52] The fourth argument is that the trial judge erred by considering the MMS, which the appellant says was not applicable in this case. He relies on this court's decision in Giuliani, where the court held that in the circumstances of that case, the icy road clearance time limits in the MMS did not apply. I would reject this argument. The Giuliani case involved an issue of anticipating the formation of ice. In that case, ice had not yet formed, but the findings of default by the municipality were based on the failure to take reasonable steps to avoid the formation of ice: see Giuliani, at para. 32. In this case, there was a finding that there was unanticipated ice. Therefore, had Wilmot known of that ice formation, it would have had the obligation to clear the ice within eight hours. However, the accident occurred before it learned about the ice formation.

[53] The fifth argument is that the trial judge applied an unduly low standard of care by stating that the municipality does not have a duty to ensure driver safety. He made no such error. In considering the Fordham test, this court in Lloyd, at para. 63, stated:

In considering these steps, Canadian courts have taken into account the difficult winter conditions that exist and the cost of clearing the roads of snow. The courts have emphasized that a municipality is not to be treated as an insurer of the safety of the users of its roads by imposing overly onerous maintenance obligations. Specifically, a municipality's failure to salt or sand its roads does not automatically expose it to civil liability: the driving public cannot expect municipalities to keep the roads free and clear of snow and ice at all times during the winter. [Citations omitted and emphasis added.]

[54] The appellant's final argument is that the trial judge erred by saying that no one could say there was ice on the road, when in fact, Baird did say that they were on ice at the time of the accident. I would not give effect to this argument either. First, the trial judge referred to this evidence by Baird, so he was well aware of it. In any event, the action against the municipality failed, not because non-repair had not been proved, but because Wilmot met its onus to establish the statutory defences after the trial judge found there was non-repair.

[55] In Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, the seminal case from the Supreme Court on standards of review, the underlying issue concerned the responsibility of a municipality to maintain roads. Justice Iacobucci and Justice Major, in a joint opinion for the majority, at para. 56, stated that in such cases, absent errors of law, significant deference is to be accorded to the trial judge:

[T]he narrowly defined scope of appellate review dictates that a trial judge should not be found to have misapprehended or ignored evidence, or come to the wrong conclusions merely because the appellate court diverges in the inferences it draws from the evidence and chooses to emphasize some portions of the evidence over others. As we are of the view that the trial judge committed no error of law in finding that the municipality breached its standard of care, we are also respectfully of the view that our colleague's re-assessment of the evidence on this issue is an unjustified interference with the findings of the trial judge, based on a difference of opinion concerning the inferences to be drawn from the evidence and the proper weight to be placed on different portions of the evidence. [Citations omitted.]

[56] In this case, the trial judge made no error of law, conducted a thorough review of the evidence and made reasonable findings. His analysis is entitled to deference.

(2) Issue 2: Did the trial judge err by assessing contributory negligence on the part of the appellant at 50%?

[57] Having found that the municipality bore no liability for the appellant's damages, the trial judge's approach to contribution was to first assess whether Baird, as vehicle owner, had any responsibility for the collision, and then whether House had any responsibility.

[58] The Waterloo Regional Police inspection report regarding the Baird vehicle was made an exhibit at trial. It indicated that the rear tires on the vehicle were worn beyond acceptable limits and were "on wear bars". The front and rear tires were mismatched and over-inflated: the front tires were Tiger Paws and the rear tires were Merit tires; the pressure on both front tires was 40 psi, while the pressure on the rear left tire was 50 psi. The pressure on the rear right tire could not be measured as that tire had been cut in the accident. The manufacturer's recommended pressure was 35 psi for all four tires.

[59] The trial judge accepted the evidence of Neil Bigelow, the motor vehicle collision reconstruction expert. His opinion was that because the tires were so worn and over-inflated, the Baird vehicle "was not safe to be driven on anything but a clear, dry road". The condition of the rear tires would cause reduced traction and stability and reduced capacity for control. Further, in his opinion, tires worn to the wear bars would not meet Ontario safety standards.

[60] Baird also called an expert to address the tire issue. Although he opined that there was not enough information to determine whether the poor tires were a cause of the accident, he conceded that because tires with poor tread have only 50-70% of the friction of a new tire, that would increase the risk of the rear tires sliding.

[61] The trial judge noted that counsel for Baird "virtually conceded" that the tires may have contributed to the loss of control of the vehicle; however, his position was that the bulk of the fault lay with the appellant, who was driving too fast and lost control.

[62] The trial judge concluded that the condition of the tires created a risk of loss of control, especially on a "snowy, slushy or icy" roadway, and particularly if the driver was driving too fast for the conditions. Therefore, Baird bore some responsibility for the collision and for the appellant's damages.

[63] Turning to the appellant, the trial judge considered his responsibility for the collision and for the damages he suffered, based on three possible factors: (i) excessive speed; (ii) distracted driving (including both his emotional state because of his girlfriend's pregnancy and his marijuana usage); and (iii) failure to wear a seatbelt.

[64] Baird and Tomlinson testified about the appellant's speed. Baird said he thought the appellant was driving at approximately 80 km/h, while both said that the appellant was driving safely before the accident. The trial judge noted that Murray did not lose control of his vehicle and had been able to stop without incident at a stop sign before the accident. Using air bag data from the respondent Murray's vehicle, the evidence disclosed that Murray was travelling at 80 to 82 km/h before he braked 1.3 seconds before the impact and that the application of the brakes caused the vehicle to slow to a speed of 51 km/h at the impact. The collision reconstructionist with the Waterloo police attributed the collision to "driver inexperience and road conditions". Bigelow, the accident reconstruction expert, also gave his opinion about the cause of the accident. He blamed the unsafe tires and the fact that House was likely driving above the 80 km/h speed limit just prior to losing control of his vehicle.

[65] Based on this evidence as well as the fact of the accident, the trial judge concluded that there was some evidence that the appellant was driving over the 80 km/h speed limit and that it was clear that he did not adjust his speed for the conditions. Speed was a factor in the accident and the appellant therefore bore some responsibility for it on that basis.

[66] On the distracted driving issues, the trial judge concluded that the fresh news of his girlfriend's pregnancy was certainly on the appellant's mind on the evening of the accident. Because the appellant was focused on this news and smoking marijuana during the drive, the trial judge concluded that he was probably distracted from driving and bore responsibility for the accident on that basis as well.

[67] Despite some evidence that House was not wearing a seatbelt, on balance, the trial judge was not convinced that House did not have his seatbelt fastened. Therefore, failure to wear a seatbelt was not a contributing cause of the damages the appellant suffered.

[68] Turning to the issue of apportionment, the trial judge found that it was not possible to determine to what degree the defective tires, the distracted driving and the speeding contributed causally to the accident. He therefore applied s. 4 of the Negligence Act, R.S.O. 1990, c. N.1, which provides that where it is not practicable to determine the respective degrees of fault or negligence between parties, then the parties are deemed to be equally at fault or negligent.

[69] The appellant submits that the finding that he was 50% responsible amounted to "speculation" that he was speeding in the face of evidence to the contrary, and that the trial judge's concerns about marijuana use and the appellant's state of mind over the pregnancy were not based on evidence. He submits that the 50% allocation should be set aside and reduced to 15-20%, or another amount as the court may direct.

[70] I would not give effect to this submission. There was clearly evidence, including the action taken by Murray to brake when he saw the appellant's car, from which the trial judge could infer that the appellant was negligent in failing to adjust his speed for the conditions, and that he was upset about the pregnancy. There was direct evidence that he smoked multiple pipe bowls of marijuana while driving.

[71] Section 4 of the Negligence Act was enacted to be used in the circumstances that arose here, where it would not be practicable for the trial judge to determine the respective degrees of responsibility for the accident and for the damages House suffered as a result. His decision to apply that section and apportion liability on a 50/50 basis discloses no error.

[72] As this court held in Giuliani, at para 46:

An appellate court ought not to vary an apportionment of negligence at trial except in very strong and exceptional circumstances, unless an error in law was made or there has been a misapprehension of some material fact: see Ingles v. Tutkaluk Construction Ltd., 2000 SCC 12, [2000] 1 S.C.R. 298, at para. 57; Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., [1997] 3 S.C.R. 1210, at paras. 78 to 80.

(3) Issue 3: Did the trial judge err by failing to give effect to the expert evidence and not applying a lower discount rate than the one provided by Rule 53.09 of the Rules of Civil Procedure?

[73] Rule 53.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides:

53.09 (1) The discount rate to be used in determining the amount of an award in respect of future pecuniary damages, to the extent that it reflects the difference between estimated investment and price inflation rates, is,

(a) for the 15-year period that follows the start of the trial, the greater of,

(i) the average of the value for the last Wednesday in each month of the real rate of interest on long-term Government of Canada real return bonds (Series V121808, formerly Series B113911), as published in the Bank of Canada's Weekly Financial Statistics for the period starting on March 1 and ending on August 31 in the year before the year in which the trial begins, less ½ per cent and rounded to the nearest 1/10 per cent, and

(ii) zero; and

(b) for any later period covered by the award, 2.5 per cent per year for each year in that period.

[74] The purpose of applying a discount rate to a lump sum damages award for future pecuniary damages was explained by the Supreme Court of Canada in Townsend v. Kroppmanns, 2004 SCC 10, [2004] 1 S.C.R. 315, at para. 5:

Compensation aims at restoring the victim to the position that person would have been in had no loss been incurred. Compensation is awarded in the form of a lump sum payment. The dollar amount received for future costs is actually lower than projected costs because it is assumed that the amount paid will be invested and will earn income before being used for future needs. The same reasoning applies for loss of future income. The victim is awarded a lower amount for income than that person would have actually earned at a future date. In other words, the amounts are discounted to reflect the present value of the expenses incurred or the income earned at a future date, taking inflation adjustments into consideration. The purpose of the discount rate is thus to insure that victims will be fully compensated but that defendants will not be called on to overpay. In British Columbia, to avoid courts' having to hear expert evidence in every case in order to determine the appropriate discount rate, s. 56 of the Law and Equity Act, R.S.B.C. 1996, c. 253, which was added in 1981 (S.B.C. 1981, c. 10, s. 30), authorizes the Chief Justice of the British Columbia Supreme Court to set the discount rate. Pursuant to the Law and Equity Regulation, B.C. Reg. 352/81, which was adopted pursuant to s. 56 of the Act, the Chief Justice has fixed the discount rate at 2 1/2 percent for future earnings and 3 1/2 percent for future costs.

[75] In Ontario, the discount rate is provided by Rule 53.09 of the Rules of Civil Procedure, and is reconsidered from time to time by the Civil Rules Committee in order to maintain its accuracy and reliability. While the discount rate is fixed by regulation in British Columbia, in Ontario, the parties are entitled to lead expert evidence and, on the basis of that evidence, to ask the trial judge to impose a different discount rate than the one found in the Rule. In Sandhu v. Wellington Place Apartments, 2008 ONCA 215, 234 O.A.C. 200, at para. 145, this court stated:

To the extent that a plaintiff believes that r. 53.09(1) does not accurately convert the cost of specific expenses to be incurred in the future into present-day dollars because the costs for those expense[s] are increasing at a rate faster than the estimated long-term inflation rate, that is a factor that affects the quantum of the award for the specific expenses and is an issue that should be raised at trial. [1]

[76] Dr. Peter Coyte, a health care economist expert called by the appellant, testified that certain health care costs have historically risen at a greater rate than the Consumer Price Index, and that four categories of future health care costs included in the appellant's damages award would continue to rise by 1.1% annually over that rate.

[77] He therefore opined that applying the Rule 53.09 discount rate would be unfair to the appellant in respect of those future health care costs, and that a lower rate (i.e., negative 0.8% instead of 0.3% for the first 15 years and 1.4% instead of 2.5% thereafter) should be applied to the following four categories of those costs: attendant care; costs of regulated health care professionals; medication; and future transitional services by regulated health care professionals.

[78] The trial judge acknowledged the logic and "political reality" of the expert opinion. However, he declined to apply it for two reasons: (i) it would have the effect of increasing the award by millions; and (ii) he preferred to rely on the stability and predictability of the Rule, believing it to be inappropriate to adjust the discount rate in individual cases.

[79] The appellant submits that the trial judge erred by accepting the logic of the evidence of the expert but declining to act on it. He argues that the established basis for tort damages, namely, the principle of restoring him to the position he would have been in but for the loss, outweighs the need to apply the Rule to maintain stability in its application.

[80] On my reading of his reasons, while he saw the logic of the expert's analysis, the trial judge did not fully accept his evidence, and was not prepared to act on it. That is the prerogative of a trial judge. There is no basis to interfere.

E. The Cross-Appeal: Costs Disposition

(1) Costs reasons of the trial judge

[81] The trial judge gave separate reasons for awarding costs. Wilmot was entitled to its costs on the partial indemnity scale, as it was completely successful.

[82] The appellant obtained a judgment against Baird in the amount of $1,405,439.10 (after the 50% apportionment and a reduction for a settlement with Murray). Baird argued that the appellant was only entitled to his costs up to the date of Baird's offer to settle, because the appellant would have been better off had he accepted Wilmot's offer to settle together with Baird's offer, which was an offer to settle with all parties (i.e., House, Baird and Samms) for his policy limit of $1 million, to be apportioned in accordance with an agreement or with the judgment. The appellant did not accept the offer and argued that he could not know whether he would have been better off because the amount of the Baird offer could not be determined.

[83] The trial judge rejected Baird's argument. He agreed with the appellant that he was not obliged to accept an uncertain offer. The trial judge also rejected the submission that the appellant's costs against Baird should be reduced by 50% because of the finding of 50/50 liability for the accident. The trial judge therefore awarded full partial indemnity costs to the appellant against Baird based on his finding that the amount of the judgment exceeded the offer.

[84] The appellant had sued Wilmot and lost, while Baird had cross-claimed against Wilmot and also lost. The appellant therefore asked the trial judge to make a Sanderson order requiring Baird to pay Wilmot's costs. Based on the fact that Baird did not actively pursue his cross-claim against Wilmot, the trial judge determined that the appropriate order was for Baird to pay one half of Wilmot's costs and for the appellant to pay one half.

(2) Baird's cross-appeal regarding costs

[85] Baird seeks leave to appeal both aspects of the costs order.

[86] Leave to appeal costs will only be granted "in obvious cases where the party seeking leave convinces the court there are 'strong grounds upon which the appellate court could find that the judge erred in exercising his discretion'": see Brad-Jay Investments Limited v. Village Developments Limited, 218 O.A.C. 315 (C.A.), at para. 21; and quoted with approval in McNaughton Automotive Limited v. Co-operators General Insurance Company, 2008 ONCA 597, 95 O.R. (3d) 365, at para. 24.

[87] The Supreme Court confirmed the same principle in Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27, stating: "[a] court should set aside a costs award on appeal only if the trial judge has made an error in principle or if the costs award is plainly wrong".

[88] I see no such error in this case.

(a) Offer to settle

[89] The trial judge made no error in finding that Baird's offer to settle with three people for his policy limit was uncertain as to the actual amount being offered to the appellant. Uncertainty or lack of clarity in an offer may prevent a party from meeting its burden to show that the judgment obtained was as favourable as the offer, or more or less favourable, as the case may be: see Rooney (Litigation guardian) v. Graham, 53 O.R. (3d) 685 (C.A.), at para. 44.

[90] In any event, the appellant's judgment against Baird exceeds the full $1 million dollar policy limit and therefore exceeds the amount of the offer. Baird argues that the appellant is unlikely to collect more than the insurance proceeds from him, but this is disputed by the appellant. We cannot resolve this factual dispute. Nor would it provide any basis for this court to grant leave to appeal costs on this ground.

(b) Sanderson order

[91] Baird submits that the trial judge erred in making the modified Sanderson order by failing to consider the factors set out by this court in Moore (Litigation guardian) v. Wienecke, 2008 ONCA 162, 90 O.R. (3d) 463, which he says would not have supported the order.

[92] Applying Moore, at para. 41, the threshold issue before a Sanderson order should be made is: was it reasonable for the plaintiff to join the several defendants in one action? The trial judge found that in this case it was reasonable for the appellant to sue both the municipality and Baird. The next step is to then consider the four factors that Moore, at paras. 45-50, identifies as being relevant to a trial judge's exercise of discretion: (i) whether the defendants tried to blame each other; (ii) whether the unsuccessful defendant caused the successful defendant to be added as a party; (iii) whether the causes of action were independent of each other; and (iv) the plaintiff's ability to pay the costs. See also: Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 3d ed. (Toronto: LexisNexis Canada, 2017), at pp. 937-938.

[93] In this case, the trial judge either explicitly considered, or was certainly aware of, these factors. While Baird's counsel did not actively try to implicate Wilmot in the conduct of the cross-claim, Baird maintained the cross-claim throughout, and had rejected Wilmot's offer to contribute. The appellant's causes of action against Baird and Wilmot were related, arising out of the same accident and relating to contribution to causation. Any award against the appellant would reduce his limited recovery and his ability to pay a costs award made against him.

[94] Each of these factors, unlike in Moore, could support the decision to alleviate the burden on the appellant by making the unsuccessful defendant, Baird, responsible for the costs of the successful defendant, Wilmot. In this case, the trial judge took a very fair approach by reducing Baird's costs responsibility by half, to reflect counsel's approach at trial of not aggressively trying to shift blame onto Wilmot. The Moore factors "need not be applied mechanically" and the exercise is a discretionary one: see Moore, at para. 45. In my view, the trial judge made no error and his decision should attract the deference of this court.

F. Result

[95] In the result, I would dismiss House's appeal and Baird's cross-appeal for leave to appeal costs.

[96] I would order costs of the appeal and cross-appeal in accordance with the agreement of counsel as follows: costs of the appeal payable by House to Wilmot in the amount of $30,000, inclusive of disbursements and HST; and costs of the cross-appeal payable by Baird to House in the amount of $7,500, inclusive of disbursements and HST.

Released: "K.F." November 21, 2017

"K. Feldman J.A."

"I agree. E.A. Cronk J.A."

"I agree. B.W. Miller J.A."

Footnote

[1] Previous case law from this court stated that the extent of the allowable expert evidence was limited to factors other than future investment and price inflation rates: see Giannone v. Weinberg, 68 O.R. (2d) 767 (C.A.), at paras. 35-45, leave to appeal refused, [1989] S.C.C.A. No. 295; Ligate v. Abick, 28 O.R. (3d) 1 (C.A.), at paras.18-29; Martin v. Listowel Memorial Hospital, 51 O.R. (3d) 384 (C.A.), at paras. 55-74; and Walker v. Ritchie, 197 O.A.C. 81 (C.A.), at paras. 88-91, rev'd on other grounds, 2006 SCC 45, [2006] 2 S.C.R. 428.