2014 ONSC 5586
COURT FILE NO.: 12-54674-A2
DATE: 2014/09/26
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ALLIANZ GLOBAL RISKS US INSURANCE COMPANY, TRANS STATES HOLDING, INC., TRANS STATES AIRLINES, LLC, XL SPECIALITY INSURANCE COMPANY, GENERAL SECURITY INDEMNITY
COMPANY OF AZ, AXA CORPORATE SOLUTIONS ASSURANCE, NATIONAL FIRE & MARINE INSURANCE COMPANY, IRONSHORE SPECIALTY INSURANCE COMPANY, STARNET INSURANCE COMPANY, LLOYD'S SYNDICATE 2488, LLOYD'S SYNDICATE 5000, LLOYD'S SYNDICATE 1400, LLOYD'S SYNDICATE 5555, LLOYD'S SYNDICATE 1183, GREAT LAKES REINSURANCE (UK) PLC, ARCH
INSURANCE COMPANY, ISOSCELES INSURANCE LTD. and
CHARTIS INSURANCE UK LIMITED
Plaintiffs
– and –
THE ATTORNEY GENERAL OF CANADA, OTTAWA INTERNATIONAL AIRPORT AUTHORITY and NAV CANADA
Defendants
Counsel: Timothy Trembley, for the Plaintiffs Sharon Johnston, for the Defendant, The Attorney General of Canada
HEARD: June 19, 2014 at Ottawa, Ontario
REASONS on application for leave to appeal
MADAM JUSTICE BONNIE R. WARKENTIN
[1] The moving party, The Attorney General of Canada (the “Crown”), one of the defendants in this proceeding, seeks leave to appeal the Order of Justice C. Hackland, the motion judge, dated November 18, 2013. Justice Hackland denied the Crown’s motion brought pursuant to Rules 21 and 25 of the Rules of Civil Procedure to strike parts of the Plaintiffs’ claims as set out in the Statement of Claim.
[2] In that motion, the Crown argued that Transport Canada in its capacity as a regulator of aeronautics in Canada, owed no private duty of care to the plaintiffs for property damage occurring in crashes or in respect of licensing or policy based regulatory issues or, if a duty of care was owed, it was negated by policy reasons. The Crown therefore sought an Order striking those paragraphs in the Amended Amended Statement of Claim that made reference to that duty of care.
[3] Justice Hackland, in dismissing the Crown’s motion, found that the motion was premature and that the paragraphs sought to be struck spoke to material facts and the issue of foreseeability.
[4] The Crown now brings this motion seeking leave to appeal pursuant to Rules 2.01(1)(a), 2.03, 62.02(1.1) and 62.02(2) of the Rules of Civil Procedure and s.19(1)(b) of the Courts of Justice Act.
The Incident
[5] On June 16, 2010 there was an overrun incident at the Ottawa International Airport (the “Airport”). United Express Flight 8050 (the “Aircraft”) landed at the Airport in rainy conditions and overran Runway 07 (the “Incident”). No one was seriously injured; however, the actual loss sustained to the Aircraft as a result of the Incident was $5,473,344.32 USD, most of which was subject to an insurance policy and was thus paid by the insurer plaintiffs.
[6] At the time of the Incident, the Airport was owned by Transport Canada. Transport Canada also designed and constructed Runway 07.
[7] In this litigation, the Plaintiffs allege the following:
a. that Transport Canada failed to follow its own regulations in the construction of Runway 07, which rendered it a hazard to aviation safety when wet;
b. that this failure in the design of Runway 07 was a proximate cause of the runway overrun on June 16, 2010 and the damages claimed therein;
c. that Transport Canada, as designer and builder of the runway, knew or ought to have known it was not safe;
d. that Transport Canada was aware from its own oversight of the Airport, including periodic inspections and audits, that the runways at the Airport failed to comply with Canadian and international standards; and
e. that notwithstanding its knowledge, Transport Canada failed to take action to mitigate the risk associated with Runway 07.
[8] Justice Hackland was asked to determine whether it was plain and obvious that the pleaded facts could not give rise to a duty of care between Transport Canada and the plaintiffs. He found in the special circumstances of this case that it was not plain and obvious that such a duty of care could not exist between the moving defendant and the plaintiffs and held that the question of the duty of care should be left to the trial judge.
[9] In reaching his decision to dismiss the Crown’s motion, Justice Hackland also found that there was a contested issue of statutory interpretation and possible operational practice with respect to Airport Certificates. Justice Hackland determined that in circumstances where there are factual and evidentiary issues that bear upon the outcome of the duty of care analysis, they are best left to the trial judge.
[10] In this motion for leave to appeal, the Crown submitted that Justice Hackland’s decision conflicts with appellate authorities, most particularly the Supreme Court of Canada, because he failed to apply the two stage Anns test by not engaging in an analysis of proximity in which failure by the regulator to take reasonable care might foreseeably cause loss or harm to the plaintiff; and then if proximity is established, to determine whether or not there are policy reasons why this duty of care should not be recognized.[^1]
[11] The Crown also argued that there is good reason to doubt the correctness of Justice Hackland’s decision when it found that special circumstances exist in this case that could give rise to a duty of care and that a full factual record was needed to make such a determination when no specific interactions between the plaintiffs and the defendant Attorney General of Canada were pleaded.
[12] In the motion before Justice Hackland, the plaintiffs successfully argued that their claim pleads one, indivisible cause of action against Transport Canada, which sounds in negligence. It was their position that their pleadings included three underlying factual aspects of negligence against Transport Canada which they summarized as:
(a) Transport Canada negligently designed and constructed Runway 07;
(b) as owner of the Airport, Transport Canada negligently permitted the Airport to be used in an unsafe condition; and
(c) Transport Canada was negligent in certifying the Airport as safe by granting and continuing an Airport Certificate, when it knew or ought to have known the Airport, and in particular Runway 07, was unsafe, and in failing to take steps to mitigate the known risks associated with Runway 07.
[13] The plaintiffs noted that the Crown’s motion to strike was not brought in relation to the allegations pertaining to Transport Canada’s design or construction of Runway 07 or in relation to Transport Canada’s ownership of the Airport. Therefore, even if the Crown was successful in its motion to strike, there would still be a cause of action in negligence on the other allegations.
[14] It was the plaintiffs’ position, which was accepted by Justice Hackland, that the factual matrix they pleaded was indivisible. In other words, the plaintiffs submitted that all allegations of fact in the Statement of Claim inform the duty of care of Transport Canada. Justice Hackland was “persuaded that there is considerable merit” in this submission insofar as matters could be determined at the pleadings stage of the action.
ISSUES AND THE LAW
ISSUES
The Test for Granting Leave
[15] Rule 62.02(4) of the Rules of Civil Procedure provides that leave to appeal an interlocutory Order shall not be granted unless:
(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or
(b) there appears to the judge hearing the motion good reason to doubt the correctness of the Order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
THE LAW
Issue 1(a): Conflicting Decision
[16] It is sufficient to satisfy the court that there is a conflicting decision where there is a difference in the principle chosen as a guide to the exercise of a Judge’s discretion.[^2]
[17] However, a judge who exercises his discretion when the circumstances of the case are different than in other jurisprudence is not necessarily making a “conflicting decision”. A motion judge’s decision is entitled to deference. Therefore, in order to be successful on a motion for leave to appeal, it is necessary for the appellant to demonstrate that there is a difference in the principles chosen by the motions judge as his guide to the exercise of such that discretion.[^3]
[18] On a motion to strike pleadings, the test is whether it is plain and obvious that the action cannot succeed. This is a very high standard that will be met in only the clearest of cases. The Ontario Court of Appeal has stated that, on a motion brought under Rule 21, the moving party must show that it is plain, obvious and beyond doubt that a claim cannot succeed.[^4]
[19] I accept the plaintiffs’ submissions that Rule 21 does not require the motion judge to make an order if he or she, in their sole discretion, declines to do so. Rule 21 provides that the motion judge “may make an order or grant judgment accordingly.” The Rule is permissive and gives wide latitude for the motion judge to decline to make the order sought by the moving party in appropriate cases.
[20] I also accept the plaintiffs’ submissions that the motion judge was not required to conduct the entire Anns analysis on the facts as presented in this motion to strike some of the pleadings. Justice Hackland found that this was not a novel situation and instead compared this case to the duty of care claimed in the case of Chadwick v. Canada (Attorney General),[^5] another decision involving an aircraft accident.
[21] Justice Hackland found that there were special circumstances in this case that made it different from the cases cited by the Crown regarding the Anns analysis. In reaching this conclusion, Justice Hackland determined that the analysis of the Airport inspection and certification regulations could not be isolated from the historical, hands-on involvement of Transport Canada with Runway 07.
[22] Finally, Justice Hackland commented, at paragraph 14 of his endorsement, that there is a contested issue of statutory interpretation and possible operational practice with respect to Airport Certificates. He found that this issue was relevant to the duty of care analysis and that the court would benefit from a ‘full evidentiary record’ prior to determining these issues.
[23] I accept Justice Hackland’s discretion to make the findings he did on a motion to strike pleadings and find that the first branch of the test under Rule 62.02(4)(a) of the Rules of Civil Procedure has not been met; as such it is not desirable that leave be granted on the basis that there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal.
[24] The Crown may continue to raise the duty of care issue at trial. That issue will be decided on the basis of all of the evidence before the court including all of the allegations of negligence.
Issue 2(a): Good Reason to Doubt Correctness of the Decision
[25] To succeed in a motion for leave to appeal pursuant to Rule 62.02(4)(b), the court must be satisfied that there is good reason to doubt the correctness of the motion judge’s decision and that the appeal raises matters of general importance.[^6]
[26] The phrase, “good reason to doubt the correctness of a decision,” does not require a conclusion that the decision in question was wrong or even probably wrong, or that the judge hearing the leave motion would have decided it differently had they been presiding as the motion judge. The test is whether the decision is open to serious debate.[^7]
[27] Because I did not find that Justice Hackland’s decision conflicted with a “decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal,” there is nothing in the Crown’s position that has convinced me that there is good reason to doubt the correctness of Justice Hackland’s decision, nor that there are matters of sufficient importance that extend beyond the interests of the litigants and relate to matters of public importance and matters relevant to the development of the law and the administration of justice.
[28] The Crown’s motion is therefore dismissed.
COSTS
[29] The parties provided me with their costs submissions at the conclusion of the hearing. The plaintiffs’ full indemnity costs including disbursements are $ 10,983.76 and the Crown’s full indemnity costs including disbursements are $8,541.78.
[30] The plaintiffs were the successful party and therefore are entitled to their costs. I therefore fix the plaintiffs’ costs at $7,500.00 inclusive of HST and disbursements.
Madam Justice Bonnie R. Warkentin
Released: September 26, 2014
2014 ONSC 5586
COURT FILE NO.: 12-54674-A2
DATE: 2014/09/26
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ALLIANZ GLOBAL RISKS US INSURANCE COMPANY, TRANS STATES HOLDING, INC., TRANS STATES AIRLINES, LLC, XL SPECIALITY INSURANCE COMPANY, GENERAL SECURITY INDEMNITY COMPANY OF AZ, AXA CORPORATE SOLUTIONS ASSURANCE, NATIONAL FIRE & MARINE INSURANCE COMPANY, IRONSHORE SPECIALTY INSURANCE COMPANY, STARNET INSURANCE COMPANY, LLOYD'S SYNDICATE 2488, LLOYD'S SYNDICATE 5000, LLOYD'S SYNDICATE 1400, LLOYD'S SYNDICATE 5555, LLOYD'S SYNDICATE 1183, GREAT LAKES REINSURANCE (UK) PLC, ARCH INSURANCE COMPANY, ISOSCELES INSURANCE LTD. and
CHARTIS INSURANCE UK LIMITED
Plaintiffs
– and –
THE ATTORNEY GENERAL OF CANADA, OTTAWA INTERNATIONAL AIRPORT AUTHORITY and NAV CANADA
Defendants
REASONS ON APPLICATION
FOR LEAVE TO APPEAL
Madam Justice B. R. Warkentin
Released: September 26, 2014
[^1]: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] S.C.J. No. 42 at para. 39
[^2]: Comtrade Petroleum Inc. v. 490300 Ontario Ltd., 1992 CanLII 7405 (ON SC), 7 O.R. (3d) 542, [1992] O.J. No. 652, at para. 7
[^3]: Nikore v. Proper, 2010 ONSC 2307 at para. 33
[^4]: Portuguese Canadian Credit Union Ltd. (Liquidator of) v. CUMIS General Insurance Co., 2010 ONSC 6107, 104 O.R. (3d) 16 at para. 28
[^5]: 2010 BCSC 1744 at para. 67
[^6]: Bell ExpressVu Limited Partnership v. Morgan, 2008 CanLII 63136 (ON SCDC) at paras. 1 to 3,
[^7]: Judson v. Mitchele, 2011 ONSC 6004, per Boswell, J. at para. 15, citing Ash v. Lloyd’s Corp., 1992 CanLII 7652 (ON SC), [1992] O.J. No. 894 (Gen. Div.)