ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-10-401309-00A3
DATE: 20140430

B E T W E E N:

SHARON KENTNER

No one appearing for the Plaintiff

Plaintiff

• and -

PYE BROS. FUELS LTD., DTE INDUSTIRES LTD., and IMPERIAL OIL, A PARTNERSHIP OF IMPERIAL OIL LIMITED and McCOLL FRONTENAC PETROLEUM INC.

Lynn Mitchell and Ryan Teschner for Pye Bros. (Responding Party)
No one appearing for the other Defendants

Defendants

UNDERWRITERS LABORATORIES OF CANADA INC., TECHNICAL STANDARDS AND SAFETY AUTHORITY and BURNER SERVICE LIMITED a.k.a. MATSON’S BURNER SERVICE

Third Parties

Adam Grant for Technical Standards and Safety Authority (Moving Party)
No one appearing for the other Third Parties

ENDORSEMENT

D.L. CORBETT J.

[1] The plaintiff, Ms. Kentner, bought an above-ground fuel tank to store fuel oil used to heat her home. In April 2008, the fuel tank leaked, contaminating Ms Kentner’s property and properties of her neighbours.

[2] The defendant DTE manufactured the fuel oil tank. The defendant Pye Brothers sold and installed the fuel oil tank. The defendant Imperial Oil delivered fuel oil to Ms Kentner and pumped it into her fuel oil tank.

[3] Pye Brothers alleges that it sold a tank that complied with industry standards, and installed it properly.

[4] In its third party claim, Pye Brothers blames the third party Underwriters for developing a fuel oil tank standard that is inadequate. It blames the third party TSSA for promulgating this standard. And it alleges that TSSA became aware of increasing failure rates in approved tanks, and yet did not warn consumers or businesses.

[5] TSSA moves for summary judgment dismissing the third party claim against it. It says that its promulgation of industry standards for fuel tanks is a matter of “policy” for which it cannot be liable civilly.

[6] The issues raised on this motion may have wide application. It appears that fuel tanks meeting the Underwriters standard, promulgated by TSSA, have failed at excessive rates in northern Ontario. There are five other third party claims against TSSA, in addition to the one before me.

[7] This motion was argued before the Supreme Court of Canada’s decision in Hryniak v. Maudlin.[^1] I did not invite the parties to re-attend to address the effect of Hryniak. This is a case of first impression concerning the potential legal liability of TSSA in these circumstances. Affidavits of documents have not been exchanged. There have not been examinations for discovery as yet.

[8] I am reluctant to wade too far into the waters of argument, since this matter may come back before me on a further motion for summary judgment. It is clear that TSSA carries on both operational and policy-making functions. It is required to carry insurance for claims that may be made against it.[^2] Its employees and agents are immunized from suit, but TSSA itself remains liable for the acts or omissions of its employees.[^3] The line between “policy-making” and “operational” activities by TSSA is an important issue of principle that deserves mature reflection on a complete record.

[9] In promulgating industry standards, TSSA does not thereby become, in effect, an insurer for any design flaws in equipment it approves. On the other hand, if TSSA contributes to creating a situation of hazard by approving a particular tank, and becomes aware that the hazard is substantial and immediate, and does nothing to warn or otherwise ameliorate the hazard, is it immune from suit?

[10] On a summary judgment motion of this kind, the question is not whether a duty of care will be recognized in all the circumstances. Rather, the question is whether it is plain and obvious that no duty of care can be recognized.[^4] It is not “plain and obvious” that TSSA cannot liable on the basis of:

(a) a duty to set adequate industry standards.[^5]

(b) a duty to warn of the risk of danger.[^6]

(c) negligent investigation.[^7]

(d) the harm having been foreseeable and there having been sufficient proximity between TSSA and the other parties to this case.[^8]

[11] This may be the first time an Ontario court decides whether TSSA can owe a duty of care to the population subject to its actions.[^9] To assess whether a duty of care exists, the court should have the “full factual matrix” before it.[^10] It is not always necessary to wait until after production and discovery for a motion for summary judgment. Even in complex cases, with multiple witnesses and voluminous documents, summary judgment may be appropriate without full production and discovery.[^11] Here, however, I am not satisfied that the record is complete. This may well be an appropriate case for summary judgment once the record is complete; I am not comfortable that it is so now.

Effect of Hryniak v. Mauldin[^12]

[12] The Supreme Court of Canada has made it clear that a judge denying a motion for summary judgment should ordinarily become seized of the balance of the proceeding. That may present practical problems where the motion is brought in one third party proceeding. Given that this issue was not canvassed at the argument of the motion, counsel shall advise me in writing by May 15, 2014 of their positions on how the principles in Hryniuk ought to be applied in the circumstances of this action, given my decision to refuse summary judgment at this time. Counsel for Pye Bros. shall provide a copy of this decision to all parties to all third party claims and all parties to the main action, each of which shall be at liberty to provide me with their positions on this same issue by May 15th.

Costs

[13] If costs are not agreed then Pye Bros. shall provide me with its costs submissions by May 15th, and TSSA shall provide responding submissions by May 29th.

D.L. CORBETT J.

Released: April 30, 2014

[^1]: 2014 SCC 7.

[^2]: Memorandum of Understanding between Ministry of Consumer Services and Technical Standards Safety Association, s.3.15(1).

[^3]: Technical Standards and Safety Association Act, 2000, S.O. 2000, c.16, s.3.16.

[^4]: Kawartha Lakes (City) v. Gendron et al., 2012 ONSC 2035 at 12.

[^5]: Campbell v. Flexwatt Corp., 1996 3539 (BC SC), [1996] B.C.J. No. 1487 at paras. 50-51.

[^6]: Haskett v. Equifax Canada Inc., 2003 32896 (Ont. C.A.) at para. 22, and the cases cited therein; Heaslip Estate v. Ontario, 2009 ONCA 594.

[^7]: Adams v. Borrel, 2008 NBCA 62 ( at paras. 41-44; Ingles v. Tutkaluk Constr. Ltd., 2000 SCC 12.

[^8]: Taylor v. Canada (A.G.), 2012 ONCA 479; R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42.

[^9]: In one case TSSA is a defendant in a class proceeding that has been certified, though it seems that TSSA did not contest the duty of care issue for the purposes of the certification motion: Durling v. Sunrise Propane Energy Group Inc., 2012 ONSC 4196.

[^10]: Roe v. Leone, 2012 ONSC 6237; Fullowka v. Pinkerton’s of Canada Ltd., 2010 SCC 5.

[^11]: See for example Sweda Farms v. Egg Farmers of Ontario, 2014 ONSC 1200.

[^12]: 2014 SCC 14.