Ontario Superior Court of Justice

Boudreau v. Bank of Montreal et al. [Indexed as: Boudreau v. Bank of Montreal]

111 O.R. (3d) 544
2012 ONSC 3965

Ontario Superior Court of Justice,
Lofchik J.
July 31, 2012

Negligence -- Duty of care -- Financial sponsors of soccer organization not having duty of care to players to ensure that organization had adequate insurance coverage in place.

The plaintiff was rendered a paraplegic while paying soccer in a league operated by the Ontario Soccer Association ("OSA"). The OSA had purchased an insurance policy with health care and rehabilitation expense coverage limited to $40,000 for a paraplegic injury. The plaintiff alleged that the insurance coverage was inadequate. He brought an action against corporate sponsors of the OSA, pleading that they had a duty of care to ensure that adequate insurance was in place. The defendants brought a motion to strike out the statement of claim and dismiss the action pursuant to rules 21.01(1) and 25.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

Held, the motion should be granted.

The defendants were not involved in the organization of the OSA or its events. They merely bought the right to display their logos and names on the OSA website and at soccer fields. Financial sponsors of a soccer organization do not have a legal duty to individual players to inquire into the nature and terms of any insurance policy which the organization may have purchased for the benefit of the players and to ensure that the amount of the insurance is adequate. The facts pleaded in the statement of claim did not support a relationship between the plaintiff and the defendants that was sufficiently close and direct as to require the defendants to be mindful of the plaintiff's legitimate interests. [page545]

Chen (Guardian at Litem) v. Jose Narvaez (the), [citation unknown], distd
Other cases referred to Consentino v. Dominaco Developments Inc., [2010] O.J. No. 61, 2010 ONSC 208 (S.C.J.); Fazzinga v. Westchester Track Club, 2006 N.Y. Misc LEXIS 2899, 235 N.Y.L.J. 120 (S.C.); Gragg v. Witchita State University, 1997 Kan. LEXIS 80, 261 Kan. 1037, 934 P.2d 121; Hunt v. Carey Canada Inc., 1990 SCC 90, [1990] 2 S.C.R. 959, [1990] S.C.J. No. 93, 74 D.L.R. (4th) 321, 117 N.R. 321, [1990] 6 W.W.R. 385, J.E. 90-1436, 49 B.C.L.R. (2d) 273, 4 C.C.L.T. (2d) 1, 43 C.P.C. (2d) 105, 23 A.C.W.S. (3d) 101; Jack v. Canada (Attorney General), 2004 ONSC 6217, [2004] O.J. No. 3294, [2004] O.T.C. 706, 132 A.C.W.S. (3d) 990, 2004 CarswellOnt 3255 (S.C.J.); Lambert v. Pepsico, Inc., 1997 La App. LEXIS 2057, 698 So. 2d 1031 (C.A., 4th Cir.); O'Sullivan v. Hemisphere Broadcasting Corp., 1988 Mass. LEXIS 82, 402 Mass. 76, 520 N.E. 2d 1301; Panalpina Inc. v. Sharma, [1988] O.J. No. 1401, 29 C.P.C. (2d) 222, 11 A.C.W.S. (3d) 304, 1988 CarswellOnt 459 (Master); Previs v. Spano, 1998 Conn. Super LEXIS 697; Syl Apps Secure Treatment Centre v. B.D., [2007] 3 S.C.R. 83, [2007] S.C.J. No. 38, 2007 SCC 38, 284 D.L.R. (4th) 682, 365 N.R. 302, J.E. 2007-1512, 227 O.A.C. 161, 49 C.C.L.T. (3d) 1, 39 R.F.L. (6th) 245, 159 A.C.W.S. (3d) 464, EYB 2007-122390; Vogel v. West Mountain Corp., 1983 N.Y. App. Div. LEXIS 20328, 97 A.D.2d 46, 470 N.Y.S.2d 475; Zarrelli v. The Barnum Festival Society Inc., 1986 Conn. App. LEXIS 857, 6 Conn. App. 322, 505 A.2d 25

Statutes referred to
Occupiers' Liability Act, R.S.O. 1990, c. O.2

Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 21.01(1), (b), 25.11

MOTION to strike the statement of claim and dismiss the action.

Cases referred to
Gaudet v. Sullivan, 1992 2676 (NB KB), [1992] N.B.J. No. 503, 128 N.B.R. (2d) 409, 35 A.C.W.S. (3d) 64 (Q.B.); Milina v. Bartsch, 1985 179 (BC SC), [1985] B.C.J. No. 2762, 49 B.C.L.R. (2d) 33, 30 A.C.W.S. (2d) 257 (S.C.), folld

Lou Ferro and Sean Oostdyk, for plaintiff/respondent.
Peter J. Pliszka and Andrew M. Baerg, for defendants/applicants Rogers Communications Inc. and Umbro Inc.
Irving Marks and Dominique Michaud, for defendant/applicant Bank of Montreal.

[1] LOFCHIK J.: -- The defendants Bank of Montreal ("BMO"), Rogers Communications Inc. ("Rogers") and Umbro Inc. ("Umbro") bring this motion for an order to strike out the statement of claim and dismiss the action against them pursuant to rules 21.01(1) and 25.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[2] The plaintiff brought this action in respect of an accident which took place on or about February 26, 2008 in which he was rendered a paraplegic while playing soccer in a league operated [page546] by the Ontario Soccer Association (the "OSA") at an indoor soccer field in Hamilton, Ontario. The field was owned and operated by HoJO Enterprises Inc. o/a Soccerworld Hamilton ("Soccerworld"). The plaintiff alleges that as a financial sponsor of OSA, the defendants each had a duty to inquire into and ensure that OSA and Soccerworld had sufficient insurance to cover the plaintiff's health care and rehabilitation expenses in the event of an accident, given the plaintiff's participation in a potentially dangerous sport. The plaintiff claims that the named defendants breached this duty and that the insurance was inadequate. The plaintiff claims, in the alternative, that if the defendants made inquiries with respect to the existence of an insurance policy, they breached their legal duty by misfeasance and their failure to ensure that the coverage was reasonably adequate.

[3] The plaintiff issued the statement of the claim against the named defendants in this motion and others on February 26, 2010. The plaintiff claims $4,500,000 for general damages for the cost of medical care plus interest and costs. The plaintiff has subsequently discontinued his claim against all defendants except BMO, Rogers and Umbro.

[4] The plaintiff has commenced three other actions based on damages suffered from his accident. Among the other defendants in the other actions are Soccerworld, the OSA, players and referees from the game in [which] the accident took place.

[5] The plaintiff alleges that at the time of the accident he was a fee-paying member of Soccerworld and the OSA. As part of his membership contract between the plaintiff and Soccerworld and the OSA, the plaintiff alleges that the OSA and Soccerworld undertook to put in place a proper insurance policy to insure the plaintiff for his losses in the event that he was injured while he was a member. The plaintiff pleads that the OSA had purchased an insurance policy with health care and rehabilitation expense coverage limited in the amount of $40,000 for a paraplegic injury. The plaintiff pleads that the insurance coverage was inadequate.

[6] The plaintiff pleads that the defendants had a duty to ensure that adequate insurance was available for all participant members of the OSA and Soccerworld.

[7] The plaintiff alleges that the defendant applicants herein publically identified themselves as a corporate partner and financial sponsors of the OSA. The plaintiff further alleges that the said defendants pay money to Soccerworld and the OSA to have access to the OSA and Soccerworld membership and seek to establish a commercial relationship with or proximity to the membership as a target market for their commercial purposes. [page547] The plaintiff alleges that the applicant defendants came into legal proximity to the plaintiff through the physical presence of advertising on the Soccerworld field and OSA and Soccerworld website. The plaintiff alleges that this proximity created "de jure" and "de facto" legal duty.

[8] The plaintiff alleges in the alternative in the statement of claim that the defendants by virtue of their sponsorship agreement with the OSA became licencees and occupiers of the premises and cyberspace under the care and control of Soccerworld and the OSA at the sponsored events and premises. The plaintiff alleges that this relationship of proximity is sufficient to impose a duty of care as occupiers in favour of the plaintiff. The plaintiff further allege that the defendants had a duty to the plaintiff under the Occupiers' Liability Act, R.S.O. 1990, c. O.2. During the argument of this motion, counsel for the plaintiff withdrew this claim.

[9] The plaintiff alleges that the applicant defendants failed to act to the standard of a prudent or reasonable person under the circumstances and that the failure gives rise to a claim in negligence. The plaintiff alleges that the applicant defendants had a positive legal duty to inquire with the OSA and Soccerworld to see if the reasonably foreseeable risk of loss was covered by adequate insurance.

[10] The plaintiff alleges that the applicant defendant's failure to inquire if the reasonably foreseeable risk of loss was covered by adequate insurance is nonfeasance. Alternatively, the plaintiff alleges that if the applicant defendants made an inquiry with respect to the existence of insurance they thereby entered into a legal duty and acted in acknowledgment of this duty but breached that duty by misfeasance. Accordingly, the plaintiff alleges that the applicant defendants are liable in law for the damages sustained by the plaintiff. The plaintiff alleges that he suffered a catastrophic injury and will incur significant costs or medical and other health and rehabilitation expenses related to his paraplegic condition.

[11] The plaintiff alleges that he relied on the existence of a proper health care expenses insurance policy and he suffered a loss as a result of that reliance.

[12] The issue to be decided on this motion is whether a company which provides products or funds to a soccer organization through a sponsorship role can have a legal duty to an individual player to inquire into the nature and terms of any insurance policy which the soccer organization may have purchased for the benefit of the soccer players, and to ensure that the amount [page548] of such insurance is adequate (however that may possibly be determined).

[13] Rule 21.01(1)(b) provides the court with authority to strike out a statement of claim where the claim discloses no reasonable cause of action:

21.01(1) A party may move before a judge, . . . . . (b) to strike out a pleading on the ground that it discloses no reasonable cause of action or defence, and the judge may make an order or grant judgment accordingly.

[14] A motion to strike pursuant to rule 21.01(1)(b) should be granted where it is "plain and obvious" that the pleading discloses no reasonable cause of action. Well-pleaded factual allegations must be accepted as true for the purposes of the motion but the court need not accept allegations that are patently ridiculous, incapable of proof or contradicted by other elements of the pleading. Vague or conclusory allegations made in the statement of claim are insufficient to avoid the pleading being struck (Hunt v. Carey Canada Inc., 1990 SCC 90, [1990] 2 S.C.R. 959, [1990] S.C.J. No. 93, at paras. 33 and 36; Consentino v. Dominaco Developments Inc., [2010] O.J. No. 61, 2010 ONSC 208 (S.C.J.), at paras. 34-38.)

[15] While the novelty of a claim will not militate against the plaintiff, the Supreme Court of Canada has recognized that it is entirely appropriate to carefully scrutinize a newly asserted duty of care at the pleading stage, even where the category of duty alleged has not been previously litigated. In overturning an appellate court decision and striking the plaintiff's claim, Abella J. held for a unanimous court:

Both the majority and dissenting reasons acknowledged that imposing such a duty of care would represent a novel duty at law. The benefit of making a determination on a Rule 21 motion about whether such a duty should be recognized, is obvious. If there is no legally recognized duty of care to the family owed by the defendants, there was no legal justification for a protracted and expensive trial. If, on the other hand, such a duty is accepted, a trial is necessary to determine whether, on the facts of this case, that duty has been breached. . . . . .

I would not, as a result, recognize such a new legal duty. It follows that, in my view it is "plain and obvious" that the statement of claim discloses no reasonable cause of action against these defendants. (Syl Apps Secure Treatment Centre v. B.D., 2007 SCC 38, [2007] 3 S.C.R. 83, [2007] S.C.J. No. 38, at paras. 19 and 21.) [page549]

[16] Rule 25.11 of the Rules of Civil Procedure provides:

25.11 The Court may strike out or expunge all or part of a pleading . . . with or without leave to amend, on the ground that the pleading or other document, (a) may prejudice or delay the fair trial of the action; (b) is scandalous, frivolous or vexatious; or (c) is an abuse of the process of the court.

[17] A pleading which contains an "untenable plea" in law may be struck. An untenable plea is one "that is clearly impossible of success at law, it has no legal potential whatsoever, that is clearly unviable or unachievable at law" or raises no genuine issue of law. Such an untenable plea is this frivolous, vexatious and an abuse of the process of the court (Panalpina Inc. v. Sharma, [1988] O.J. No. 1401, 1988 CarswellOnt 459 (Master Sandler); Jack v. Canada (Attorney General), 2004 ONSC 6217, [2004] O.J. No. 3294, 2004 CarswellOnt. 3255 (S.C.J.).)

[18] Canadian courts have previously considered the issue of whether corporate sponsors have a duty of care to supporting participants and firmly closed the door on these claims (Milina v. Bartsch, 1985 179 (BC SC), [1985] B.C.J. No. 2762, 49 B.C.L.R. (2d) 33 (S.C.); Gaudet v. Sullivan, 1992 2676 (NB KB), [1992] N.B.J. No. 503, 128 N.B.R. (2d) 409 (Q.B.).)

[19] The above two cases seem to be the only two Canadian cases that deal with the liability of financial sponsors for injuries arising at sponsored events or while playing on a sponsored team. In both cases, the courts have held that the no duty of care or liability attaches to a sponsor acting in a financial role.

[20] In Milina, the court, after conducting the Anns test determined that the sponsor, the Labatt Brewing Co. Ltd. ("Labatt") did not owe a duty of care to a participant in a ski exhibition who was rendered a quadriplegic in an accident that occurred at an event sponsored by Labatt. On this point, McLachlin J., as she then was, held [at paras. 54 and 55]:

For the reasons set out above, I am satisfied that Labatts owed no duty to the plaintiff. No relationship of sufficient proximity between Labatts and the plaintiff or his parents is established to give rise to a duty of care in tort. There is no contract between them. Nor is there any room for imputation of vicarious liability.

As sponsor of the show, Labatts was in the position of the consumer of a product supplied by others. It bought the right to display its logo and name on the equipment and the privilege of having the skiers perform under the name "The Labatt's Acrobatts", just as it might buy advertising space in a magazine or on television. There is no legal [page550] foundation for suggesting that a person purchasing such right to publicize his product, is legally responsible for the consequences of the activity with which it associates its name.

[21] In Gaudet, the plaintiff brought an action against a car dealership, among other defendants, for damage arising from an injury suffered during a hockey game. The plaintiff alleged that the car dealership was vicariously liable for a tort that was committed by a player of the team sponsored by the car dealership. The court held that the sponsor was not vicariously liable. On this point, the court stated:

It follows that the claim against Tozer Plymouth Chrysler Ltd. and Cyril Tozer must also be dismissed. If I had allowed the claim of Mr. Gaudet against Mr. Sullivan I am of the opinion that the claim against the Corporate Defendant and Mr. Tozer should even in such an event be dismissed. The evidence does not substantiate that Mr. Sullivan was an agent or servant of these Defendants. The only evidence as to their involvement is that the Corporate Defendant sponsored the team by purchasing hockey sweaters. To conclude that as a result they would be liable for the tortuous act of one of the players on a team that they had so sponsored would in my opinion be unacceptable and improper. Involvement in sponsoring a sporting team to this limited extent does not and should not result in vicarious liability of the sponsor. If it would I think it would be very difficult for many such teams to obtain a sponsor.

[22] The British Columbia Supreme Court addressed the potential liability of a sponsor with an organizational role in an event where someone was seriously injured in Chen (Guardian at Litem) v. Jose Narvaez (the), [citation unknown]. The facts of that case dealt with a marine accident that occurred in Vancouver Harbour. At the time of the accident, the victims were travelling by pleasure boat to attend a fireworks display. Rothmans and Benson & Hedges Inc. ("Benson & Hedges"), along with other individuals who sponsored the event in question, played a significant organizational role putting on the fireworks display. Benson & Hedges brought a summary judgment motion to dismiss the third party claim brought against it by the defendant tugboat driver for allegedly being negligent in organizing the event. The court held that the sponsors and organizers of the event were not negligent. The court did, however, determine that the sponsors had assumed a duty of care but had not breached the appropriate standard of care when organizing the event because they had properly deferred to the appropriate experts on the issue of water safety. The third party claim was dismissed against the sponsors.

[23] The decision in Chen should be distinguished from the facts set out in the statement of claim herein and the decisions of Milina and Gaudet because the sponsors in Chen were directly involved in the organization of the event and were not merely a financial contributor for advertising purposes. As such, the court held it appropriate to determine that the Chen sponsors had assumed a duty of care to those individuals who would be attending the fireworks display. No similar facts are pleaded in the statement of claim herein, and accordingly this action does not fall into any duty of care recognized at law in Canada.

[24] Defence counsel have argued that there are no reported U.K. or Australian cases that deal with similar causes of action against financial sponsors as the negligence claim asserted by the plaintiff [in] the statement of claim.

[25] Defence counsel argued that the American courts have decided a number of cases dealing with claims similar to the negligence claim brought by the plaintiff. The American courts have consistently held that mere financial sponsorship absent some level of control of direct involvement in the organization of the event cannot render a sponsor legally responsible in negligence.

[26] The counsel for the plaintiff alleges that because the sponsorship arrangement entered into by the applicant defendants was for a commercial purposes to in effect increase their profitability, and because it was with the soccer organization rather than sponsorship of an individual event, the facts of this case may be distinguished from the decisions in Milina and Gaudet as well as the decisions in a number of American cases which I cite below:

Fazzinga v. Westchester Track Club, 2006 N.Y. Misc LEXIS 2899, 235 N.Y.L.J. 120 (S.C.);

Previs v. Spano, 1998 Conn. Super LEXIS 697;

Lambert v. Pepsico, Inc., 1997 La App. LEXIS 2057, 698 So. 2d 1031 (C.A., 4th Cir.);

Gragg v. Witchita State University, 1997 Kan. LEXIS 80, 261 Kan. 1037;

O'Sullivan v. Hemisphere Broadcasting Corp., 1988 Mass. LEXIS 82, 402 Mass. 76;

Zarrelli v. The Barnum Festival Society Inc., 1986 Conn. App. LEXIS 857, 6 Conn. App. 322; [page552]

Vogel v. West Mountain Corp., 1983 N.Y. App. Div. LEXIS 20328, 97 A.D.2d 46.

[27] With respect, I disagree with the plaintiff's position and find that the reasoning in the cases mentioned above is equally applicable to the facts of this case and that the case law supports the proposition that sponsorship without the right to possession or control does not subject the sponsor to liability or the negligence of third parties nor make them liable to participants in events which they sponsor.

[28] In my view, the plaintiff's claim against the applicant defendants in negligence must fail as the plaintiff does not plead the facts of a relationship of sufficient proximity between the plaintiffs and these defendants to ground a duty of care and support the plaintiffs in negligence. There are no facts pleaded in this statement of claim that these defendants had an organizational role in the OSA or that they had a role in selecting the insurance coverage for OSA members.

[29] The facts pleaded in the statement of claim do not support a relationship between the applicant defendants and the plaintiff that was sufficiently close and direct so as to require these defendants to be mindful of the legitimate interests of the plaintiff. The statement of claim pleads that the applicant defendants paid money to the OSA to have access to the OSA membership. As in Milina, the defendants were in a position of a consumer purchasing a product supplied by the OSA and merely bought the right to display their logo and name on the OSA websites and around the Soccerworld premises. This advertising is no different than if the defendants were to buy advertising space in a magazine or on television. Accordingly, as decided in Milina, there is no legal foundation for suggesting that a person purchasing such a right to publicize a product is legally responsible for the consequences of the activity with which it associates its name.

[30] Further, the statement of claim fails to plead the appropriate reliance to raise a duty of care between the defendants and the plaintiff. Specifically, the statement of claim fails to (Milina, supra, at paras. 44-45) (a) plead that the plaintiff knew or relied upon any of the applicant defendants being an OSA sponsor; (b) plead that the plaintiff relied upon the applicant defendants to ensure that the OSA had adequate insurance in place to cover damages arising from a catastrophic injury; and (c) plead that it was in the reasonable contemplation of the applicant defendants that the plaintiff was relying on them to ensure that the OSA had adequate insurance in place to cover damages arising from a catastrophic injury.

[31] As the plaintiff's claim lacks any factual basis for establishing a proximate relationship between the plaintiff and the applicant defendants, as a matter of law there can be no cause of action in negligence by the plaintiff against these defendants.

[32] Rejecting the imposition of a duty upon the corporate sponsors would not leave the plaintiff without any potential remedy. In this case, like virtually all cases involving corporate sponsorship of sporting events, the plaintiff already has a cause of action in tort and contract against those with direct involvement in the incident, including the event organizers, the facility owners and the players in the game itself. Among other things, the plaintiff would appear to have a prima facie cause of action in contract against OSA, which was responsible, on the allegations pleaded, for arranging the plaintiff's insurance.

[33] Based on the foregoing, I find that the statement of claim fails to plead a reasonable cause of action known to law against the defendants BMO, Rogers and Umbro and therefore an order should issue striking out the statement of claim as against these defendants.

[34] In my view, there is no need for a trial to fully appreciate the issues and the evidence that pertain to those issues. There is no genuine issue requiring a trial.

[35] So far as the issue of costs is concerned, I am prepared to receive written submissions according to the following timetable:

The defendants shall provide to the plaintiff a bill of costs together with brief written submissions not exceeding five pages within two weeks of this date. The plaintiff is then to provide to the defendant submissions with respect to costs within a further two weeks. The submissions of the plaintiff and the defendant should then be filed with the court together with any reply submissions by the defendants by no later than five weeks from this date.

Motion granted.