SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 58247
DATE: 2012/03/12

RE: TERRY DALE SUTHERLAND and MELISSA SUTHERLAND (Plaintiffs) – and VIA RAIL CANADA INC. (Defendant)

BEFORE: JUSTICE W. U. TAUSENDFREUND

COUNSEL:
K. K. Munro, for the Plaintiffs
D. G. Merner, for the Defendant, VIA Rail Canada Inc.
K. R. Peel, for Goderich-Exeter Railway Company (“GEXR”) – Party Proposed to be added as defendant

HEARD: March 7, 2012

E N D O R S E M E N T

[ 1 ] The plaintiffs move under rule 5.04(2) of the Rules of Civil Procedure to add GEXR as a party defendant and, if successful, for an order under rule 26.01 of the Rules of Civil Procedure to amend their statement of claim to add allegations against GEXR.

[ 2 ] GEXR opposes the relief sought on the grounds that the claim against it is out of time. The plaintiffs’ response states that the “discoverability principle” applies and that GEXR would not be prejudiced by the relief sought.

[ 3 ] This action arises from the collision of a motor vehicle with a moving VIA RAIL train at a railway crossing on December 4, 2006. The plaintiff Terry Sutherland alleges that he was injured in this collision. The plaintiff Melissa Sutherland is the wife of Terry Sutherland. She brings a derivative claim under the Family Law Act based on her husband’s injuries.

[ 4 ] The train did not stop, as the VIA employees on the train were unaware of the impact until the train came to its regularly scheduled stop in Stratford some distance away.

[ 5 ] The Stratford police investigated the accident and generated a motor vehicle accident report showing VIA RAIL as the owner of the train with which the plaintiff motor vehicle collided at rail crossing 91.23. GEXR attended about two hours after the accident. Its then employee prepared a “Crossing Accident Report” indicating that the various signals at this crossing were tested and found to be in working order. As well, the name of the investigating officer from the Stratford Police Service was noted.

[ 6 ] On December 19, 2006, a member of the Transportation Safety Board emailed Ken Montoure of GEXR as follows:

Ken, just closing out the last of GEXR accidents and need a copy of your “Initial Rail Equipment Accident/Incident Report” for the crossing accident of Dec-04-06 involving VIA train number 84 being struck by an automobile at Mile 91.23… VIA reports the crew was unaware of the vehicle contact until arriving at Stratford. Police advise that the lone vehicle occupant was taken by ambulance with undetermined injuries.

Ken Montoure responded to Transportation Safety Board the same day as follows:

…a formal report was never filed… VIA 84 was proceeding in an easterly direction on the Guelph Sub. when southbound vehicle struck the locomotive behind the ladder to enter the cab. The VIA crew did not see the accident, only felt a bump and thought it was ice. They were advised when they made the station stop at Stratford. Minimal damage to the left front pilot and ladder of the locomotive. David Ashkanase, Police Constable, Uniform Division, Badge 4 – Stratford Police Service, Incident Number 631-06 (12979-06). The crossing protection was tested by GEXR signal maintainer Dale Russell – flashing lights and bell working properly. The crossing protection was functioning at the time of the accident. The vehicle was southbound on Road Line 29 – the impact when the vehicle struck the VIA locomotive tossed the vehicle into the north/east ditch. The vehicle sustained significant damage. Licence plate AKXK 454…

[ 7 ] The Lerner firm was retained by the plaintiffs in January 2007. Upon receipt of the accident report from the Stratford Police Service, on April 2, 2007 Lerners put VIA RAIL and its engineer on notice of the plaintiffs’ claim. On April 9, 2007 VIA notified GEXR that it had so been put on notice. It requested that GEXR forward to VIA the “Crossing Accident Report” of December 4, 2006 re: this accident.

[ 8 ] The statement of claim was issued May 16, 2008. It alleged that VIA was the operator of the train and the occupier of the track. VIA sent its statement of defence June 18, 2008. It contained a blanket denial of responsibility alleging that the plaintiff was wholly responsible for the accident. VIA’s pleadings contained no reference that GEXR might be responsible for the tracks and the signals for the crossing.

[ 9 ] Pleadings closed July 14, 2008 which meant that under the Rules, VIA’s affidavit of documents was due July 24, 2008. In fact, it was not provided in draft form until February 26, 2009. That was the first document in this action that made an oblique reference to GEXR.

[ 10 ] The examination for discovery of VIA was held March 17, 2010. Based on VIA’s articulated position that day, counsel for plaintiffs learned for the first time that the maintenance and safety of the railway crossing might be the responsibility of GEXR and not VIA.

[ 11 ] This motion to add GEXR as a party defendant was brought October 27, 2010.

[ 12 ] Section s.4 of the Limitations Act , 2002 provides that the claim against GEXR must be brought within two years of the day on which the claim was discovered. Section s.5(1)(b) provides:

A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred;

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission;

(iii) that the act or omission was that of the person against whom the claim is made; and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

[ 13 ] Based on the material before me on this motion, I am satisfied that counsel for the plaintiffs treated this file reasonably and with due diligence as a motor vehicle accident file. Lerners obtained the police report, gave notice to VIA, retained an engineer, started the action against VIA and arranged for and conducted examinations for discovery all in a normal and expected time frame. The question is whether with expected normal due diligence, Lerners could have learned within two years of the accident that it was not VIA who was responsible for the railway bed, track and the train track crossing in question, including the operation and maintenance of any and all necessary traffic and train signals, but that it was the responsibility of GEXR. Counsel for GEXR state that there was an absence of such expected due diligence. In support of that position, GEXR points to the following:

(a) A property search would have identified the owner of the tracks. No such search was undertaken.

(b) The Canadian Transportation Agency was not approached. That agency probably could have provided the necessary information regarding the train track ownership.

(c) An Internet search to identify the authority to operate on the tracks in question probably would have shed light on the question.

(d) No inquiry was made with CN.

[ 14 ] GEXR relies on two photos in particular in support of its position that there was a lack of due diligence. One photo is of a sign near the railway crossing indicating that CN has buried signal and communication cable in that area and to contact CN prior to the start of any proposed digging. The second photo shows a metal box close to the crossing to which is attached a decal stating:

24 hour emergency

GEXR: 1-800-890-2812

[ 15 ] GEXR states that either of these signs should have put Lerners on notice of either CN or GEXR involvement with the crossing. I find that the evidence on this motion is not clear whether the signs existed during the two year period following the accident. In my view, that is a matter best left to the trial judge.

[ 16 ] On November 13, 1998 GEXR and CN agreed to a lease by GEXR of certain rail lines, including the railway track in question. GEXR has had care and control of these tracks since that date, including the railroad crossing in question. That rail line is also used by VIA RAIL passenger trains with leave of GEXR as one of the terms of its agreement with CN. It may well be that all of this is readily apparent to those professionals who are involved on a regular basis with a federally regulated industry such as railways. I am not, however, satisfied that lawyers doing personal injury work involving motor vehicle accidents necessarily are expected to have knowledge of, and familiarity with what many might view as the arcane area of railway law. It does not surprise me that plaintiffs’ counsel assumed, albeit incorrectly as it turned out, that VIA RAIL operating a train on the tracks in question would also be responsible for the maintenance of the very tracks which it used and the related signal equipment. Accordingly, I find that it was reasonable for plaintiffs’ counsel in these circumstances to have first learned of its incorrect assumption when VIA RAIL made its position clear with respect to the ownership and responsibility for the rail bed, tracks and railway crossings at its examination for discovery on March 17, 2010.

[ 17 ] That, however, does not end the discussion. I must also consider the question of prejudice.

[ 18 ] GEXR states that many of its employees who were involved in the maintenance of the tracks, the railway crossing and the related warning signs are no longer in its employment. In addition, it states that it has a custom of maintaining records only for a one year period. I note that GEXR has not advanced the position that it cannot produce necessary witnesses nor does it refer to relevant important documents on which it would otherwise rely, but that these are no longer available due to the passage of time.

[ 19 ] As I detailed above, GEXR was put on notice of this accident within hours of its occurrence and dispatched an employee and prepared a report of the state of the crossing and the operational function of the various signs. That report referenced the investigating officer from the Stratford Police Service. On December 19, 2006, fifteen days after the accident, GEXR corresponded with Transportation Safety Board regarding this accident. The records indicate that GEXR knew that a motor vehicle had struck a train and that the driver of that motor vehicle had been taken to hospital by ambulance with undetermined injuries. Logic might indicate a likelihood that an action for damages would surface at some future date. In fact it did. If GEXR did not do its own due diligence in assessing the state of the tracks and the crossing and signal lights, take statements from possible witnesses and maintain all relevant records, it did so at its peril. Under those circumstances, I am not prepared to find that GEXR might be prejudiced.

[ 20 ] GEXR urges that I should follow Reaume v. Smolders and Kent Petroleum Ltd., 2008 ONSC 24547 (ONSC) wherein Justice Hockin did not grant a motion to add a municipality after the expiration of the limitation period. I distinguish that decision from the facts before me as counsel for the plaintiff in Reaume had given notice to the municipality within the limitation period that a case might be advanced against it and for reasons best known to plaintiffs’ counsel in that case, the action was started without the municipality being named which was then sought to be added later after the limitation period had expired.

[ 21 ] The Supreme Court in Peixeiro v. Haverman, 1997 SCC 325 (SCC) , [1997] 3 S.C.R. 549 stated at para. 36 :

Since this Court’s decision in Kamloops v. Nielsen, 1984 SCC 21 (SCC) , [1984] 2 S.C.R. 2 and Central Trust Co. v. Rafuse, 1986 SCC 29 (SCC) , [1986] 2 S.C.R. 147 at p. 224 discoverability is a general rule applied to avoid the injustice of precluding an an action before the person is able to raise it.

[ 22 ] Lauwers J. in Madrid v. Ivanhoe Cambridge Inc., 2010 ONSC 2235 made these comments to which I subscribe:

13. The dominant policy thrust of the system of justice is that cases should be heard on the merits. Another policy thrust, found in the Limitations Act , 2002 , is to encourage a plaintiff to commence an action as soon as possible. But a third and tempering policy thrust is found in s. 5 of the Limitations Act, 2002 , which codifies discoverability… These policy thrusts are to be reasonably balanced.

14. …there is little to be gained by imposing judicially a free-standing duty on plaintiffs to write pro forma letters to defendants inquiring about the identity of other possible defendants under the rubric of due diligence in s. 5 of the Limitations Act, 2002 .

[ 23 ] An order will go adding GEXR as a party defendant to this action and permitting the plaintiffs to amend their statement of claim accordingly and as sought in their Notice of Motion with leave to GEXR to plead a limitation defence.

[ 24 ] In the normal course, costs would go to the plaintiffs who were successful on this motion. However, as counsel have not had an opportunity to argue costs and absent an agreement on that issue, counsel may have 15 days to submit their costs position in writing.

“ Justice W. U. Tausendfreund”

Justice W. U. Tausendfreund

DATE: March 12, 2012