CITATION: Febau (Canada) Limited v. City of Mississauga (Corporation), 2015 ONSC 3666

COURT FILE NO.: CV-05-011883-00

DATE: 2015 06 08

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Febau (Canada) Limited

Plaintiff

• and -

The Corporation of the City of Mississauga

Defendant

• and -

McCormick Rankin Corporation

Third Party

COUNSEL:

David E. Mende and Nedko Petkov, for the Plaintiff

David G. Boghosian, for the Defendant

Peter J. Mitchell, for the Third Party

REASONS FOR JUDGMENT

BLOOM J.

I OVERVIEW

[1] On November 21, 2003 a retaining wall located at 3041 Jaguar Valley Drive in the City of Mississauga collapsed. The lot at 3041 Jaguar Valley Drive was the site of an apartment building. The Plaintiff owned the lot, including the building and retaining wall.

[2] The wall was a composite retaining wall, consisting of a lower wall, which was a gravity or semi-gravity wall, and an upper section, which was a cantilever wall.

[3] The parties now agree that the collapse was caused by the presence of the upper wall on the lower wall. The exact mechanism of the collapse was the subject of a great deal of somewhat conflicting expert evidence.

[4] The Plaintiff’s action seeks damages from the Defendant for the collapse. The Plaintiff’s theory of liability has evolved during the proceeding. It now is grounded on two allegations:

(1) The Defendant negligently approved the plans and specifications for the upper wall; and

(2) the Defendant negligently failed to follow the advice and recommendations of the Third Party, the professional engineering consultants it had retained, specifically recommendations to proceed with a complete visual inspection of the composite wall.

[5] In turn, the Defendant seeks contribution and indemnity from the Third Party, if it is held liable on the basis of the second allegation. The Defendant’s claim over asserts that it reasonably relied on the Third Party to carry out an inspection and make appropriate recommendations; and that the Third Party must be held liable to the Defendant for negligent discharge of those tasks.

[6] I intend now to proceed in the following order:

(1) set out the factual context in which the issues arise;

(2) summarize the arguments made by the parties;

(3) identify the issues, the answers to which will dictate the result in the case at bar;

(4) state the relevant legal principles; and

(5) apply those principles to the case at bar.

II FACTS

[7] A plan of subdivision was registered as number 637 in the Registry Office for the County of Peel on September 15, 1960. The owner-subdivider was Jaguar Home Builders Limited. The plan provided for a street, Jaguar Valley Drive. It ran along the west side of Cooksville Creek north from Dundas St. until it jogged west and then north again. The creek ran north to south, at least as far as Dundas St. Block F on the plan contained the lands which would become 3041 Jaguar Valley Drive and 3065 Jaguar Valley Drive.

[8] The Planning Board of the predecessor to the Defendant, the Corporation of the Township of Toronto, recommended as a condition of the approval of the plan of subdivision protection from erosion and collapse into the creek of the portion of Jaguar Valley Drive which was to be parallel to the creek. The details of the protection were to be contained in an engineering agreement.

[9] The Minister of Municipal Affairs approved the plan of subdivision subject to that condition. That approval gave rise to an agreement dated June 1, 1960 between parties including the Township and the subdivider. Paragraph 8 provided for the execution of an engineering agreement setting out certain public services to be provided by the subdivider.

[10] Exhibit 34 is dated July 4, 1960 and includes as parties the subdivider and the Township. It is entitled “Subdivision Agreement.” The Defendant contends that this agreement is the engineering agreement; the Plaintiff contends that it was a subdivision agreement.

[11] In any event, the agreement obligated the subdivider to construct certain “works”. Among them were a reinforced concrete retaining wall; it was the lower wall in the composite wall subject of this proceeding and was to serve the protective function previously mentioned. Paragraph 25 of the agreement required that the subdivider “have all plans and specifications prepared in accordance with the requirements of the Township Engineer.” Paragraph 34 provided that “[o]n receiving the written consent of the Township Engineer to construction” the subdivider was to proceed continuously and as quickly as possible, completing construction within one year unless an extension was granted by the Township Engineer. Paragraph 45 provided that satisfaction by the Township Engineer with the work done was to be a condition precedent to the Township’s acceptance of the work.

[12] The wall built pursuant to the agreement extended 590 feet from the northern edge of Dundas St. to the northern end of Block F, that is to the rear of both 3041 and finally north to the rear of 3065 Jaguar Valley Drive. By 1961 aerial photographic evidence shows the wall in place.

[13] When, for what purpose, and by whom the upper wall was built are not the subject of direct evidence. They are factual questions which I will address in applying the relevant legal principles to resolve the issues at bar.

[14] The next set of events which provide the factual matrix for this proceeding commence in 2000. In March of that year the Defendant, the City of Mississauga, retained the Third Party, McCormick Rankin Corporation (“McCormick Rankin”), an engineering firm, to undertake an inspection of the Cooksville Creek Culvert on Dundas St. The City had not asked in its request for a proposal that an inspection of the composite wall be included. Notwithstanding that fact, inspection of the wall may have been included in the language of the McCormick Rankin proposal accepted by the City, and, in any event, the wall was inspected by McCormick Rankin.

[15] It delivered its recommendations from the culvert inspection to the City of Mississauga in July 2000. At page 3 the report included the following passages:

Although not part of the investigation MRC staff noted that the gabion walls at the south end …are sagged at the east wall. A similar gabion installation in the west wall has partially collapsed. The west side retaining wall footing at the north end of the culvert …was also observed to be undermined….

MRC would also like to point out that we believe the City of Mississauga should further investigate the undermining and deficiencies in the retaining walls upstream and downstream of the culvert in the near future to prevent further damage or total collapse.

[16] Doug Dixon, a licensed professional engineer employed by McCormick Rankin, signed the recommendations and impressed his stamp on them. The language in the recommendations was also, in substance, contained in a prior letter dated July 14, 2000 to the City from McCormick Rankin and signed for Mr. Dixon. Mr. Dixon testified in cross-examination by counsel for the Defendant that the letter was sent because the City needed accompanying cost figures for budgeting purposes even before receiving the detailed recommendations; that point is not in dispute.

[17] The material passage in the letter reads as follows:

During our site inspection of the culvert we noticed that the gabion walls at the south end…are sagged at the east wall and have partially collapsed at the west wall. In addition the west side retaining wall footing at the north end (some 50 m upstream of the inlet of the culvert) is undermined. We believe that the City should investigate these walls in the near future to prevent further damage or total collapse.

[18] Discussions ensued between the City and McCormick Rankin as to the cost of repair work in relation to the undermining (of the lower wall portion of the composite wall). An e-mail request from the City in early August asked for particulars from McCormick Rankin as to the nature of further investigation required, the nature of the repairs, and their cost. A letter of August 8, 2000 from Doug Dixon of McCormick Rankin replied and emphasized that the undermining of the wall by the creek should be repaired “as soon as possible.”

[19] On March 12, 2001 Max Boyd, the manager of the project for the City, and others representing the City of Mississauga met with Mr. Dixon to discuss the work. Mr. Boyd agreed to approve the required expenditures by the City. In a June 11, 2001 letter from Mr. Dixon to Mr. Boyd the cost of the repair work was quantified at $10,200. Repairs to a guide rail and fence on the wall totaling $1,800 were also suggested.

[20] Mr. Boyd was a licensed professional engineer. He felt that the undermining was a serious issue and needed to be addressed quickly; moreover, he believed that investigating the question of ownership of the wall could slow down the process of having the repair work done. He, therefore, approved it in full, save for the work on the fence and guide rail, without a determination as to the ownership of the wall, which he assumed belonged to the City.

[21] Jonathan Werner of McCormick Rankin did the investigation of the extent of the undermining of the wall. There were two sections which were then repaired with concrete. The work was supervised by McCormick Rankin and carried out in November of 2001. Prior to the collapse the Plaintiff was unaware of both the inspection by McCormick Rankin which found the undermining, and the repair work. Until the collapse of the wall on November 21, 2003, the Plaintiff operated on the assumption that the composite wall was owned by the City, and was the City’s responsibility to inspect and maintain.

[22] The composite wall was owned by the Plaintiff as part of the lot at 3041 Jaguar Valley Drive containing the apartment building. As noted earlier, the parties now agree that the collapse of the wall resulted from the presence of the upper wall on the lower wall, although the exact mechanism of the collapse was the subject of a great deal of somewhat conflicting expert evidence.

III ARGUMENTS OF THE PARTIES

A. The Plaintiff’s Position

[23] The Plaintiff contends first that the the Defendant, the City of Mississauga, by an agreement or agreements providing for municipal approval of the design, specifications, and construction of the upper wall created a duty of care to the Plaintiff in relation to carrying out that approval process, and that the City was negligent in approving the design and specifications. The Plaintiff asserts that the existence of the agreement or agreements in question is to be inferred from the evidence.

[24] Second, the Plaintiff alleges that the Defendant is liable in negligence for failing to follow the recommendations of the Third Party (professional engineers the Defendant had retained) that a complete visual inspection of the composite wall be carried out.

B. The Defendant’s Position

[25] In relation to the first alleged head of liability the Defendant responds that the Plaintiff had not pleaded the existence of an agreement or agreements providing for approval of the upper wall; had not referred to them in the Plaintiff’s opening statement; and had not put them to any witness. To allow the Plaintiff o rely on this argument would, therefore, in the Defendant’s submission prejudice the Defendant improperly since no evidence was called on the point and the Defendant had no opportunity to call evidence to reply to it.

[26] The Defendant further asserts that, in any event, the existence of the agreement or agreements was unproven and untenable; and that, even if such an agreement had existed, it would not have created a duty of care to the Plaintiff.

[27] With respect to the Plaintiff’s second alleged basis of liability, the Defendant argues that the inspection of the composite wall by the Third Party and the repair to the wall carried out as recommended by the Third Party constituted a gratuitous undertaking by the Defendant; and that further this gratuitous undertaking created no cause of action in view of the absence of detriment to the Plaintiff and detrimental reliance by the Plaintiff. The Defendant contends that it carried out the material repair work recommended by the Third Party.

[28] Additionally, the Defendant contends that the Third Party carried out its inspections in accordance with the applicable standard of care; and that, in any event, the Defendant carried out any duty it had to the Plaintiff by hiring a competent inspecting firm, the Third Party.

[29] The Defendant also asserts that, in the event of its own liability, contributory negligence in the range of 75 to 90% ought to be assessed against the Plaintiff for failure to inspect and maintain the wall. Similarly, the Defendant takes issue with the quantum of damages claimed, having regard particularly to the natural life expectancy of the wall.

[30] The Defendant claims over against the Third Party for full indemnification “in respect of all amounts the City is found liable to pay the Plaintiff.” That claim over is predicated on a finding that the Third Party’s inspections and recommendations were negligent.

C. The Third Party’s Position

[31] The Third Party attacks the sufficiency of the pleading by the Defendant, asserting that the Third Party claim fatally lacks the allegation that the Third Party owed a duty of care to the Plaintiff and factual allegations which might form the basis for finding a duty. Moreover, it contends that the Defendant should be prevented from seeking any corrective amendment to its pleading, because it had failed to act when advised of the defects on discovery, and would be barred by a limitations defense.

[32] The Third Party also asserts that its inspection and recommendations met any applicable standard of care. Finally, it takes the position that, if liable, only those damages that were directly occasioned by the collapse should be compensable by it, since the need to replace the wall in a controlled way related to its design and construction in which the Third Party had no involvement.

IV ISSUES

[33] Two issues determine the result in the case at bar. The first of those questions is whether the Plaintiff has proven that the Defendant owed it a duty of care in relation to the plans and specifications used to build the upper wall. The second is whether the inspection of the composite wall by the Third Party, and the repair of it pursuant to its recommendations, created a cause of action against the Defendant in the absence of proven detriment to the Plaintiff and proven detrimental reliance by the Plaintiff; the nature of the Third Party’s recommendations is an important factual subissue.

V APPLICABLE LEGAL PRINCIPLES

[34] The Supreme Court of Canada has settled the principles governing the determination of whether a private law duty of care is owed by a municipal corporation. The Ontario Court of Appeal affirmed that point in Mortimer v. Cameron, 1994 10998 (ON CA), 17 O.R. (3d) 1 at para 7, 68 O.A.C. 332.

[35] The Supreme Court in Kamloops (City of ) v. Nielsen, 1984 21 (SCC), [1984] 2 S.C.R. 2 adopted the two-step test established by the House of Lords in Anns v. Merton London Borough Council, [1978] A.C. 728. In Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537 and Ingles v. Tutkaluk Construction Ltd., 2000 SCC 12, [2000] 1 S.C.R. 298 the Supreme Court clarified that test. In Cooper v. Hobart, supra at paras 30 to 39 the Court stated:

In brief compass, we suggest that at this stage in the evolution of the law, both in Canada and abroad, the Anns analysis is best understood as follows. At the first stage of the Anns test, two questions arise: (1) was the harm that occurred the reasonably foreseeable consequence of the defendant’s act? and (2) are there reasons, notwithstanding the proximity between the parties established in the first part of this test, that tort liability should not be recognized here? The proximity analysis involved at the first stage of the Anns test focuses on factors arising from the relationship between the plaintiff and the defendant. These factors include questions of policy, in the broad sense of that word. If foreseeability and proximity are established at the first stage, a prima facie duty of care arises. At the second stage of the Anns test, the question still remains whether there are residual policy considerations outside the relationship of the parties that may negative the imposition of a duty of care. It may be, as the Privy Council suggests in Yuen Kun Yeu, that such considerations will not often prevail. However, we think it useful expressly to ask, before imposing a new duty of care, whether despite foreseeability and proximity of relationship, there are other policy reasons why the duty should not be imposed.

On the first branch of the Anns test, reasonable foreseeability of the harm must be supplemented by proximity. The question is what is meant by proximity. Two things may be said. The first is that “proximity” is generally used in the authorities to characterize the type of relationship in which a duty of care may arise. The second is that sufficiently proximate relationships are identified through the use of categories. The categories are not closed and new categories of negligence may be introduced. But generally, proximity is established by reference to these categories. This provides certainty to the law of negligence, while still permitting it to evolve to meet the needs of new circumstances.

Defining the relationship may involve looking at expectations, representations, reliance, and the property or other interests involved. Essentially, these are factors that allow us to evaluate the closeness of the relationship between the plaintiff and the defendant and to determine whether it is just and fair having regard to that relationship to impose a duty of care in law upon the defendant.

The factors which may satisfy the requirement of proximity are diverse and depend on the circumstances of the case. One searches in vain for a single unifying characteristic.

What then are the categories in which proximity has been recognized? First, of course, is the situation where the defendant’s act foreseeably causes physical harm to the plaintiff or the plaintiff’s property... Again, a municipality has been held to owe a duty to prospective purchasers of real estate to inspect housing developments without negligence: Anns, supra; Kamloops, supra….When a case falls within one of these situations or an analogous one and reasonable foreseeability is established, a prima facie duty of care may be posited.

This brings us to the second stage of the Anns test. As the majority of this Court held in Norsk, at p. 1155, residual policy considerations fall to be considered here. These are not concerned with the relationship between the parties, but with the effect of recognizing a duty of care on other legal obligations, the legal system and society more generally

It is at this second stage of the analysis that the distinction between government policy and execution of policy falls to be considered. It is established that government actors are not liable in negligence for policy decisions, but only operational decisions. The basis of this immunity is that policy is the prerogative of the elected Legislature. It is inappropriate for courts to impose liability for the consequences of a particular policy decision. On the other hand, a government actor may be liable in negligence for the manner in which it executes or carries out the policy. In our view, the exclusion of liability for policy decisions is properly regarded as an application of the second stage of the Anns test. The exclusion does not relate to the relationship between the parties. Apart from the legal characterization of the government duty as a matter of policy, plaintiffs can and do recover. The exclusion of liability is better viewed as an immunity imposed because of considerations outside the relationship for policy reasons – more precisely, because it is inappropriate for courts to second-guess elected legislators on policy matters....

The second step of Anns generally arises only in cases where the duty of care asserted does not fall within a recognized category of recovery. Where it does, we may be satisfied that there are no overriding policy considerations that would negative the duty of care. In this sense, we agree with the Privy Council in Yuen Kun Yeu that the second stage of Anns will seldom arise and that questions of liability will be determined primarily by reference to established and analogous categories of recovery. However, where a duty of care in a novel situation is alleged, as here, we believe it necessary to consider both steps of the Anns test as discussed above. This ensures that before a duty of care is imposed in a new situation, not only are foreseeability and relational proximity present, but there are no broader considerations that would make imposition of a duty of care unwise.

[36] In Ingles v. Tutkaluk, supra at paras 18 and 20 the Court elaborated on the application of the Anns/Kamloops principles to governmental inspection schemes:

To determine whether an inspection scheme by a local authority will be subject to a private law duty of care, the court must determine whether the scheme represents a policy decision on the part of the authority, or whether it represents the implementation of a policy decision, at the operational level. True policy decisions are exempt from civil liability to ensure that governments are not restricted in making decisions based upon political or economic factors. It is clear, however, that once a government agency makes a policy decision to inspect, in certain circumstances, it owes a duty of care to all who may be injured by the negligent implementation of that policy; see, for example, Just v. British Columbia, 1989 16 (SCC), [1989] 2 S.C.R. 1228, at p. 1243, per Cory J.; Rothfield v. Manolakos, supra, at p. 1266, per La Forest J.

Once it is determined that an inspection has occurred at the operational level, and thus that the public actor owes a duty of care to all who might be injured by a negligent inspection, a traditional negligence analysis will be applied. To avoid liability, the government agency must exercise the standard of care in its inspection that would be expected of an ordinary, reasonable and prudent person in the same circumstances.

[37] In the case at bar there is no allegation by the Plaintiff that the inspection carried out by McCormick Rankin involved the delegation of a non-delegable duty of care by the Defendant to the Third Party. The Plaintiff simply alleges that the Defendant acted negligently in not having regard to the recommendations of the Third Party. In Lewis (Guardian ad litem of) v. British Columbia, 1997 304 (SCC), [1997] 3 S.C.R. 1145 at paras 17 to 20 Cory J. speaking for the majority of the Supreme Court of Canada addressed the question of delegation:

Whether the duty of care owed by a defendant may be discharged by exercising reasonable care in the selection of an independent contractor will depend upon the nature and the extent of the duty owed by the defendant to the plaintiff…. It is clear that a party upon whom the law has imposed a strict statutory duty to do a positive act cannot escape liability simply by delegating the work to an independent contractor. Rather a defendant subject to such a duty will always remain personally liable for the acts or omissions of the contractor to whom it assigned the work. See for example Hole v. Sittingbourne and Sheerness Railway Co. (1861), 6 H. & N. 488, 158 E.R. 201. See also Kitchener (City of) v. Robe and Clothing Co., 1925 1 (SCC), [1925] S.C.R. 106. This must follow because an absolute statutory duty requires the performance of a positive obligation that is imposed on a particular entity which will always remain responsible for the performance of that duty.

On the other hand, a common law duty does not usually demand compliance with a specific obligation. It is only when an act is undertaken by a party that a general duty arises to perform the act with reasonable care. In the same way, the exercise of a discretionary statutory power also gives rise to a duty to take reasonable care. That is to say, the entity to which the statutory discretionary power is granted is under no obligation to exercise it but once the power is exercised, reasonable care must be taken. See Anns, supra, at pp. 751‑52.

In some circumstances, the duty to take reasonable care may well be discharged by hiring and, if required, supervising a competent contractor to perform the particular work. The standard of reasonable care is met by exercising reasonable care in the selection and, in some situations, the supervision of an independent contractor qualified to undertake the work. If this is done, then the principal will usually not be held liable for injury caused by the negligence of the independent contractor…

The strict duty to perform a particular act imposed by statute and the common law duty to take reasonable care if an act is undertaken reflect two divergent positions on a spectrum of liability. Within that spectrum there are a variety of legal obligations which may, depending on the circumstances, lead to a principal’s liability for the negligence of an independent contractor. Whether or not there will be liability for the negligence of the acts of the independent contractor will depend to a large extent upon the statutory provisions involved and the circumstances presented by each case.

[38] The courts have also considered the question of liability in negligence flowing from an act performed voluntarily or gratuitously. The discernible principle emerging is that where a governmental or private actor carries out such an act, a gratuitous undertaking, that individual or entity will be liable in respect of that performance only if there has been detrimental reliance by the claimant caused by the act in question or it has worsened the position of the claimant. That principle is applied in Hoffman v. Monsanto Canada Inc., [2005] SKQB 225, [2005] 7 W.W.R. 665 (Sask.Q.B.) affirmed at 2007 SKCA 47, [2007] 6 W.W.R. 387 (Sask.C.A.). See also Allen M. Linden & Bruce Feldthusen, Canadian Tort Law, 9^th ed (Canada: LexisNexis Canada Inc., 2011) at pages 328 to 332 where that principle also finds support.

VI LEGAL PRINCIPLES APPLIED

A. Did the Defendant Owe the Plaintiff a Duty of Care in Relation to the Plans and Specifications Used to Build the Upper Wall?

[39] The Plaintiff’s case on the first alleged basis of liability depends on proof that that the Defendant owed it a duty of care in relation to the plans and specifications used to build the upper wall. Without the existence of that duty of care, no finding of negligence on the part of the Defendant can be made. The Plaintiff’s legal argument respecting the existence of the duty involves the application of the Anns/Kamloops principles to a factual basis which is itself a matter of proof by the Plaintiff. That key factual allegation is that there was an “Amended Subdivision Agreement” which provided for the design and construction of the upper wall; the legal consequence, submits the Plaintiff, based on the Anns/Kamloops principles was thereby to create a duty of care by the Defendant to the Plaintiff.

[40] The Plaintiff formulates this necessary factual allegation at footnote 17 of its written reply submissions in these terms:

The Plaintiff and the Defendant agreed in their respective written and oral submissions that there is no document in evidence at trial entitled “Amended Subdivision Agreement” or a document constituting such an agreement. The Plaintiff’s references to an “Amended Subdivision Agreement” were meant to refer to any agreement or agreements dealing with the design, municipal approval and construction of the upper section of the Subject Retaining Wall, substantially on the same terms as the Subdivision Agreement (Trial Exhibit 34), the existence of which can be inferred from numerous provisions of the Subdivision Agreement.

[41] The Plaintiff has marshalled a number of arguments in favour of the inference of the existence of an “Amended Subdivision Agreement.” The Plaintiff submits that the Defendant had a direct interest in the integrity of Cooksville Creek and the stability of its banks, and had been significantly involved in the design and construction of the lower wall. Further, asserts the Plaintiff, pursuing the same course for the same reasons the City obligated itself to inspect and approve the design of the upper wall likely in an agreement between itself and the Plaintiff’s predecessor in title. This agreement supplemented or amended the Subdivision Agreement and was the “Amended Subdivision Agreement”, argues the Plaintiff.

[42] The Plaintiff further asserts in written argument that the evidence, including that of Cerise Lee, with respect to the record keeping and retention practices of the Defendant, circumstantially establishes that the “Amended Subdivision Agreement” existed and was likely destroyed in the 1969 fire at the Defendant’s premises; that the “Amended Subdivision Agreement” was substantially similar in content to the Subdivision Agreement; and that the “Amended Subdivision Agreement” “provided for the construction of the Upper Wall and for the approval of plans, drawings, and specifications with respect to the same by the City.”

[43] The Plaintiff also relies upon evidence from Alcides Sousa, an official of the Defendant and licensed professional engineer, that the engineering services of the Defendant under the Subdivision Agreement would likely have included on site review of the actual construction of the lower wall; that evidence, argues the Plaintiff, supports the inference of the “Amended Subdivision Agreement.”

[44] No witness testified to the existence of an “Amended Subdivision Agreement.” Moreover, there was no document in evidence which referred to any regulation by the Defendant of the design or construction of the upper wall.

[45] I find that the upper wall was not built by the subdivider but either by the builder of the apartment building at 3041 Jaguar Valley Drive or by a subsequent purchaser of that property prior to the Plaintiff. If the upper and lower walls had been built in tandem, a guardrail would not have been built on top of the lower wall. The upper wall was necessary according to the Plaintiff and Defendant to provide support for the east side parking lot at 3041 Jaguar Valley Drive. According to the testimony of the Plaintiff’s representative, John Juschitz-Gregory, on discovery read in at trial, the water level of Cooksville Creek did not rise sufficiently to require more protection than the lower wall afforded; the Defendant did not, therefore, need an “Amended Subdivision Agreement” requiring an upper wall to serve that purpose.

[46] I find that the Plaintiff has not discharged its burden of establishing on a balance of probabilities the existence of the “Amended Subdivision Agreement.” Without that factual basis there can be no duty of care found to have been owed by the Defendant to the Plaintiff, and the Plaintiff’s negligence claim grounded on the allegation of that duty must fail.

B. Did the Inspection and Repair of the Composite Wall Create a Cause of Action Against the Defendant?

[47] The Plaintiff argues that both the McCormick Rankin letter and report of July 2000 recommended to the Defendant that a complete visual inspection of the composite wall be done; that the Defendant was negligent in failing to follow that recommendation; and that that negligence resulted in a failure to identify and remedy deficiencies which caused or contributed to the wall collapse. The Plaintiff asserts that, had the recommendation been followed, the structural instability of the composite wall would have been discovered and remedied. According to the Plaintiff the repair work would have been ordered by the Defendant to be performed by the Plaintiff; and would have been carried out by the Defendant, itself, and charged back to the Plaintiff, if the latter had refused to do the work. This scenario, asserts the Plaintiff, would have avoided the wall collapse and the attendant damages suffered by the Plaintiff.

[48] The Plaintiff submits in sum that the Defendant owed it a duty of care in relation to the inspection of the composite wall, and fell below the applicable standard of care in not undertaking the complete visual inspection.

[49] At the heart of the Plaintiff’s theory of liability is the alleged violation by the Defendant of the applicable standard of care by not following the McCormick Rankin recommendation to undertake a complete visual inspection of the composite wall. Proof that this recommendation was received by the Defendant must be made on a balance of probabilities.

[50] The Plaintiff relies heavily on the language of the McCormick Rankin Report of July 2000 quoted above and the similar language in the letter of July 14, 2000 also previously reproduced.

[51] The Plaintiff argues that properly understood the language in question conveyed a recommendation to undertake a complete visual inspection of the composite wall or put the Defendant on notice that it should seek from McCormick Rankin clarification of what was being recommended, a clarification which would have brought the response that a complete visual inspection was necessary.

[52] The Plaintiff also argues that an adverse inference should be drawn on this issue against the Defendant from its failure to adduce the evidence of two City employees, Damian Albanese and Brian Grundy, who had involvement with processing McCormick Rankin’s recommendations. Mr. Grundy had passed away on May 2, 2011 but would, asserts the Plaintiff, have been available to testify at the time of discovery in 2007.

[53] There was both testimonial and documentary evidence that supports the finding that the only recommendations that McCormick Rankin made to the Defendant in respect of the composite wall were to repair the undermining of the footing of the lower wall and to repair a fence. Further, it is not in dispute that the Defendant acted on the first recommendation, and that its failure to act on the second was in no way a basis for the Plaintiff’s claim. I, therefore, find that the Plaintiff has not proven on a balance of probabilities that the Defendant had received from McCormick Rankin a recommendation to undertake a complete visual inspection of the composite wall. The Plaintiff has, therefore, not discharged its burden of proof in relation to the alleged negligence of the Defendant regarding the failure to carry out a complete visual inspection of the composite wall.

[54] To the contrary I find that the only material recommendation that the Defendant received from McCormick Rankin was to repair the undermining of the footing of the lower wall, and that the Defendant had that repair work carried out. I now turn to reviewing the evidence in support of that finding.

[55] Following the receipt by the Defendant of the July report and letter from McCormick Rankin, Brian Grundy on behalf of the City sent an e-mail request on August 4, 2000 to McCormick Rankin. In it he asked for the following information in relation to the recommendation regarding repair of the undermining of the composite wall: “what could be done,” “how much to investigate,” and “a ballpark cost for repairs.” He needed the information by August 9, since there was a budget meeting the next day.

[56] On August 8, 2000 Doug Dixon faxed a reply to Mr. Grundy. The letter in referencing the repair work stated, “The concrete retaining wall panels which have been undermined by the Creek should also be repaired as soon as possible.”

[57] On March 12, 2001 a meeting of Mr. Dixon and 3 City officials took place. They included Brian Grundy and Max Boyd. Boyd was at the time a Capital Project Manager in the Works Department of the City. He held a Bachelor of Science degree in civil engineering from Queen’s University and a Master of Engineering degree from the University of Toronto; he was also a licensed professional engineer. As Capital Project Manager he was in charge of tendering and procurement as well as construction administration for the “Cooksville Creek Culvert on Dundas St.” project which included the retaining wall repairs. He as well as Doug Dixon testified at trial.

[58] The minutes of the meeting speak as follows to the repair work of the undermining:-“Work to stabilize the R/wall north of culvert (concrete) will be to place concrete in void beneath the footing, keying repair into the shale.”

[59] A letter of June 11, 2001 from Dixon to Boyd detailed the cost of the repairs to the undermined footing and to a steel beam guide rail and fence on the north end of the wall. Boyd approved the repair work to the undermining but not to the guide rail-fence structure. As earlier noted, the repair work to the undermined footing was carried out.

[60] Boyd testified that other than the guide rail-fence issue, McCormick Rankin never advised him of any problem regarding the composite wall apart from the undermining; that they never advised him that further investigation was necessary regarding the structural integrity of the wall; and that he would have authorized further such investigation and further repair work had McCormick Rankin recommended them. Doug Dixon’s evidence on discovery read in at trial confirmed that McCormick Rankin did not advise the City of any necessary follow-up work other than to repair the undermining ( the guard rail-fence issue being irrelevant to this action).

[61] In light of the documentary evidence and the testimony of Max Boyd and Doug Dixon, I do not draw an adverse inference against the Defendant from the failure to adduce the evidence of Brian Grundy and Damian Albanese. In that regard I rely on Miller v. Carley, 2009 39065 (ON SC), [2009] O.J. No. 3148 at para. 201, 98 O.R. (3d) 432 (Ont. Sup.Ct.) where Justice Quinn approved authority restricting the availability of an adverse inference when “the point has been adequately covered by another witness.”

[62] Max Boyd did not confirm ownership of the composite wall before the repair work was done; he operated on the assumption that the composite wall belonged to the City. In fact, as earlier noted, the wall belonged to the Plaintiff and was on its property. There is no evidence that the inspection or repair work worsened the Plaintiff’s position, nor did the Plaintiff rely on them to its detriment. In law the inspection and repair work were, therefore, a gratuitous undertaking which created no liability on the part of the Defendant. It was not the basis for a duty of care giving rise to subsequent liability for the wall collapse; it was a benefit given voluntarily creating no future expectation of further like assistance.

VII CONCLUSION

[63] I, therefore, dismiss the action and the third party claim. I will receive written submissions from the parties on costs. The Defendant is to provide its submissions within 2 weeks of the release of these reasons. The Plaintiff is to follow within one week of receipt of those submissions; and the Third Party is to deliver its submissions within a further week following its receipt of the Plaintiff’s submissions.

BLOOM J.

Released: June 8, 2015