Court File and Parties

COURT FILE NO.: C-214-15 DATE: 2016-09-14 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: T.I., Plaintiff AND: VELIBOR BORO LAKOVIC and UNITED TAXI LIMITED a.k.a. United Taxi Transportation Service (K-W) Ltd., Defendants

BEFORE: The Honourable Mr. Justice D.A. Broad

COUNSEL: Bernard T. Verbanac, for the Plaintiff J. Sebastian Winny, for the Defendant United Taxi Limited a.k.a. United Taxi Transportation Service (K-W) Ltd. and for the proposed added defendant Dusan Tosic

HEARD: July 22, 2016

Endorsement

[1] By Statement of Claim issued March 2, 2015 the plaintiff brought action against the defendants Velibor Boro Lakovic (“Lakovic”) and United Taxi Limited a.k.a. United Taxi Transportation Service (K-W) Ltd. (“United Taxi”) for general damages in the amount of $200,000, special damages in an amount to be specified, and punitive, aggravated and/or exemplary damages in the amount of $150,000 arising out of a sexual assault alleged to have been committed by Lakovic in a taxicab being operated by him, and in respect of which the plaintiff was a customer.

[2] The Statement of Claim pleaded that Lakovic was an employee and/or agent of United Taxi which was engaged in the business of, inter alia, providing taxi and related transportation services to the public throughout the Kitchener and Waterloo area.

[3] The plaintiff pleaded further that the defendants are jointly and severally liable in negligence for their acts and/or omissions which materially contributed to the injuries sustained by her as a result of Lakovic’s alleged sexual assault and battery.

[4] As against United Taxi the plaintiff pleaded that that it is liable in law for legal claims made against its agents for harms created by them in the course of their duties and that it knew or ought to have known of the actions, activities, and/or propensities of Lakovic and failed to take any steps to protect her. She also pleaded that United Taxi failed to produce and/or enforce adequate company policies on prevention of sexual harassment and/or other physical and emotional abuse against persons who obtained their services, failed to properly supervise and exercise proper guidance and control over Lakovic, failed to take proper and reasonable steps to prevent injury to the plaintiff, failed to adequately screen and monitor the character of Lakovic either during the hiring process or thereafter, allowed a situation of danger to exist on its property, and failed to protect the plaintiff from sexual assault and battery, having been aware that the potential for a compromising situation could arise by allowing Lakovic to work shifts at sundown and in the early mornings.

[5] United Taxi delivered a Statement of Defence on April 13, 2015 and Lakovic delivered a Statement of Defence and Counterclaim on April 15, 2015. The plaintiff delivered a Reply and Defence to Counterclaim on May 22, 2015.

[6] On December 30, 2015 the plaintiff brought a motion for an order granting her leave to amend her Statement of Claim to add Dusan Tosic (“Tosic”) as a defendant. The proposed Amended Statement of Claim alleges that Tosic was at all material times an employee of United Taxi and was the registered owner of the taxicab that Lakovic was operating when he allegedly sexually assaulted the plaintiff. The proposed Amended Statement of Claim alleges that Lakovic was working a shift for Tosic under United Taxi’s name.

[7] The plaintiff’s motion is supported by the affidavit of Brittany L. Almeida, a law clerk for Mr. Verbanac, legal counsel for the plaintiff. Ms. Almeida deposed that she had been advised by Mr. Verbanac that it is necessary to add Tosic as a defendant to ensure that all essential parties are included so that the action can be heard on its merits, and that all evidence that would be relevant would be available to the parties.

[8] Tosic and United Taxi are each represented by Mr. Winny. Tosic opposes the motion to add him as a defendant on the basis that the proposed claim discloses no reasonable cause of action against him, no triable issue is raised as against him, and the proposed claim is an abuse of process. United Taxi has brought a cross-motion for summary judgment pursuant to r. 20 of the Rules of Civil Procedure seeking dismissal of the action as against it on the basis that there is no genuine issue requiring a trial as to its liability for the alleged intentional tort of Lakovic and that the claim against it is an abuse of process.

[9] I propose to deal with the motion for summary judgment of United Taxi and thereafter to consider the plaintiff’s motion for leave to add Tosic as a defendant.

A – Motion for Summary Judgment

Evidence on Motion for Summary Judgment

[10] United Taxi’s motion for summary judgment is supported by the affidavit of Ajmer Singh Mandur (“Mandur”), a director and secretary-treasurer of United Taxi. Mandur deposed, inter alia, to the following:

(a) the subject taxi cab was operated on the night of the alleged incident by Lakovic who is not an employee nor an agent of United Taxi; (b) Lakovic was a secondary driver of the taxicab which was owned by Tosic; (c) prior to the alleged incident Lakovic, as a secondary driver, was cleared as having a valid Ontario driver’s license and the approval of the municipality was obtained in the normal course for him to operate a taxi within the United fleet. Clearance by the municipality requires the municipality to be satisfied that the driver has no criminal record; (d) to the knowledge of Mandur, Lakovic had never been the subject of any criminal charge prior to the charge arising from the subject incident; and (e) Lakovic was found not guilty of sexual assault on April 8, 2014 in relation to the alleged incident, following a trial in the Superior Court of Justice.

[11] Tosic swore an affidavit on January 6, 2016 in which he deposed, inter alia, as follows:

(a) he is a shareholder of United Taxi and the owner of the subject taxi cab; (b) on the night of the alleged incident Lakovic was the secondary driver operating the taxicab with his permission. He knew Lakovic since the mid-1970s and to his knowledge Lakovic had no criminal record.

[12] The plaintiff swore an affidavit on March 23, 2016 in response to United Taxi’s motion for summary judgment in which she deposed, inter alia, as follows:

(a) on the night in question she attended a small party at her friend’s house. During the evening she began to feel ill and asked one of the attendees of the party to summon a taxi to take her to her residence; (b) in or around 11:15 PM she went outside alone to the United Taxi cab and entered it with the assumption that she would be taken to her residence. The man driving the cab was Lakovic. Shortly after they departed from her friend’s residence she was sexually assaulted by the United Taxi driver, the details of which were set out in the Statement of Claim; (c) it was her understanding that a call had been placed to United Taxi to pick her up and the taxicab was thereafter dispatched by United Taxi accordingly. Lakovic did not communicate to her that he was not an employee of United Taxi and/or that he was not the owner of the taxicab nor would she assume so, as she was picked up in a vehicle with large graphics which stated “United Taxi” and a roof light with the word “United” featured prominently; (d) United Taxi has not provided any policy relating to the use of secondary drivers or agents and/or any information/documentation which relates to the interrelationship between United Taxi, the taxicab owner and/or the driver; (e) United Taxi’s publicly accessible website contains detailed information regarding the particulars as to how a member of the public might apply to become a taxi driver and provides that applications are to be delivered to United Taxi; and (f) on the night in question when she was picked up by the United Taxi cab she was not aware of any special relationship between the taxicab driver, owner and/or United Taxi or that the taxicab which was labelled with “United Taxi” might be owned and/or the responsibility of anyone other than United Taxi.

Principles Applying to Summary Judgment Motions

[13] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that, on motion by a plaintiff or a defendant, the court shall grant summary judgment if it is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.

[14] The Court of Appeal in the case of Combined Air Mechanical Services et al v. Flesch et al, 2011 ONCA 764 observed at paras. 40-44 that generally there are three types of cases that are amenable to summary judgment pursuant to Rule 20, namely:

a) a case where the parties agree that it is appropriate to determine an action by way of a motion for summary judgment; b) a case where a claim or a defence is shown to be without merit; and c) a case where the trial process is not required in the interest of justice.

[15] The Supreme Court of Canada in Hryniak v. Mauldin, [2014] S.C.R 87 stated at para. 49 that there will be no genuine issue requiring a trial when a judge hearing a summary judgment motion is able to reach a fair and just determination on the merits, and that this will be the case where the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

[16] The Supreme Court of Canada went on to provide a roadmap or approach to be followed by judges hearing motions for summary judgment at paras. 66-68. The judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers in sub rules 20.04(2.1) and (2.2). There will be no genuine issue requiring a trial if the summary judgment process provides the motions judge with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure. If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under sub rules 20.04(2.1) and (2.2). While summary judgment must be granted if there is no genuine issue requiring a trial, the decision to use either the expanded fact-finding powers or to call oral evidence is discretionary.

Position of United Taxi

[17] United Taxi submits that, for the purpose of the motion for summary judgment, the Court may assume that the assault occurred as pleaded in the Statement of Claim.

[18] United Taxi argues that there is nothing in the evidence which would raise any issues requiring a trial in respect of any of the bases for liability pleaded by the plaintiff, namely (1) direct negligence; (2) breach of fiduciary duty and (3) vicarious liability.

[19] There is a passing reference in the Statement of Claim to each of the defendants being “under a positive fiduciary duty to ensure the plaintiff arrived home safely and without injury to her physical person and her emotional well-being.” United Taxi argues that no factual or legal basis was advanced by the plaintiff to support the proposition that United Taxi was in a fiduciary position in relation to her.

[20] With respect to the claim based upon direct negligence the Statement of Claim pleads that United Taxi knew or ought to have known of the actions, activities and/or propensities of Lakovic. United Taxi points out that the only evidence is that Lakovic had a clear criminal record. The plaintiff presented no evidence of any propensity for, or past history of, sexual or other violence on the part of Lakovic nor, importantly, of any knowledge thereof on the part of United Taxi, or any basis to suggest that it should have had any such knowledge.

[21] As to the claim that United Taxi failed to produce and/or enforce an adequate company policy on prevention of sexual harassment and/or other physical and emotional abuse against customers. United Taxi points to its Rules and Procedures which included a direction, under the heading “Safety Recommendations,” instructing drivers as follows: “do not touch any customer if possible. If you have an issue that will require anything physical such as removing customer from taxi, call police at the number given above.”

[22] United Taxi submits that in the case of a criminal offence being committed by a person with no relevant prior history, there is nothing which it could or ought reasonably to have done differently which would have prevented such an offence. Moreover, there is no evidence to suggest that had something been done differently, the assault would not have occurred.

[23] United Taxi submits that, in theory, it is possible for an employer to be vicariously liable for an intentional tort of an employee, but only if the plaintiff can prove that the nature of the employee’s duties materially increase the risk of the harm that occurred. In support United Taxi refers to the case of Bazley v. Curry, [1999] 2 S.C.R. 534, as well as cases which followed it such as Jacobs v. Griffiths, [1999] 2 S.C.R. 570, E.B. v. Order of the Oblates of Mary Immaculate in the Province of British Columbia, 2005 SCC 60, [2005] 3 S.C.R. 45 and Fullowka v. Pinkerton’s of Canada Ltd., 2010 SCC 5, [2010] 1 S.C.R. 132.

[24] United Taxi submits that there is no suggestion that Lakovic’s duties required him to enter the rear area of the taxi with his passenger nor touch her in any way. It says that the wrongful act, if it occurred, was unknown, unauthorized and unforeseen.

[25] United Taxi submits that there are no material facts in dispute and that summary judgment dismissing the action as against it would be a proportionate resolution of the plaintiff’s claim against it. It disagrees with the submission of the plaintiff that the issue of whether it should be held vicariously liable for Lakovic’s alleged acts is best canvassed at trial. It argues that the time to assess that issue is in the context of its motion for summary judgment.

Position of the Plaintiff

[26] The plaintiff argues that United Taxi’s own rules, regulations, policies and operating procedures evidence elements of control and supervision over taxi drivers, including secondary drivers such as Lakovic and support the position that he was an employee of United Taxi at the time of the alleged sexual assault. Upon a consideration of the “total relationship” between United Taxi and Lakovic, the plaintiff argues that there is enough evidence to establish vicarious liability on the part of United Taxi and it is an issue that is best canvassed at trial once all parties have been examined for discovery and full disclosure completed.

[27] The plaintiff also argues that a positive duty of care on United Taxi may exist if foreseeability of harm is present and if other aspects of the relationship establish a special link or proximity. Referencing Childs v. Desormeaux, [2006] 1 S.C.R. 643, the plaintiff submits that the present case falls within one of the three situations by which legal strangers may be brought into proximity to impose positive duties on defendants that would otherwise not exist, namely where the defendant either exercises a public function or engages in a commercial enterprise that includes implied responsibilities to the public at large. The plaintiff submits that United Taxi failed to adequately train and/or supervise Lakovic, resulting in a foreseeable harm.

[28] The plaintiff points to the case of Brophy v. United Taxi, 2010 ONSC 2295 (S.C.J.) as being analogous to the case at bar. In that case the owner of a taxicab bearing the United Taxi name hired a driver to operate the cab. The plaintiff was a customer and alleged that the driver assaulted him causing serious personal injury. The plaintiff alleged that United Taxi was liable in negligence by, inter alia, failing to provide adequate supervision and training to their employees, including the particular driver in question. United Taxi moved for summary judgment dismissing the action against it. In dismissing the motion, Hambly, J. held that whether United Taxi should have exercised greater control over the driver, and whether its failure to do so was a contributing cause of the assault were triable issues, the determination of which would be best left to the trial judge who would be able to apply the relevant case law to all of the evidence.

Analysis

[29] As indicted above, the plaintiff’s claim against United Taxi, as pleaded, has three bases, namely direct negligence, breach of fiduciary duty and vicarious liability. With respect to the claim in direct negligence, it is trite law that, on the assumption that United Taxi owed the plaintiff a duty of care, liability could only arise if it was in breach of an applicable standard of care which gave rise to reasonably foreseeable harm. The plaintiff led no evidence with respect to the applicable standard of care in the circumstances nor any breach on the part of United Taxi of any such standard of care. There was no evidence of any steps which United Taxi took or failed to take which led to an increased risk of a sexual assault being perpetrated by the driver on the plaintiff. The plaintiff led no evidence that Lakovic had any propensity for violence or sexual misconduct, or if he did, that United Taxi had any knowledge of it or failed to take reasonable measures to discover it. To the contrary, the uncontradicted evidence of United Taxi was that the municipal licensing process required the municipality to be satisfied that Lakovic had no criminal record.

[30] The plaintiff is required on a motion of this nature to put her “best foot forward” and the court is entitled to assume that the evidence on the motion will be the evidence at trial. An act of violence by a cab driver, such as that alleged by the plaintiff, can only be regarded as a random act, and not an act which was reasonably foreseeable to United Taxi as a consequence of allowing Lakovic to operate the cab.

[31] With respect to the claim based upon an alleged breach of fiduciary duty, no basis for the existence of such a duty is alleged or set forth in the plaintiff’s affidavit in response to the motion. Moreover, plaintiff’s counsel did not rely upon breach of fiduciary duty in his Factum or submisssions.

[32] Turning to the claim based on vicarious liability, in my view the case of Bazley v. Curry is dispositive of the issue.

[33] McLachlim J., (as she then was) writing for the court, noted at para. 36 that “a wrong that is only coincidentally linked to the activity of the employer and duties of the employee cannot justify the imposition of vicarious liability on the employer. To impose vicarious liability on the employer for such a wrong does not respond to common sense notions of fairness. Nor does it serve to deter future harms. Because the wrong is essentially independent of the employment situation, there is little the employer could have done to prevent it.”

[34] At para. 42 McLachlin J. stated that to support a finding of vicarious liability “there must be a strong connection between what the employer was asking the employee to do (the risk created by the employer’s enterprise) and the wrongful act.” She went on to state:

For example, an incidental or random attack by an employee that merely happens to take place on the employer’s premises during working hours will scarcely justify holding the employer liable. Such an attack is unlikely to be related to the business the employer is conducting or what the employee was asked to do and, hence, to any risk that was created. Nor is the imposition of liability likely to have a significant deterrent effect; short of closing the premises or discharging all employees, little can be done to avoid the random wrong.

[35] It is noted that McLachlin, J. was addressing the question of vicarious liability in the context of an employer-employee relationship, arguably a closer legal relationship than that which existed between United Taxi and Lakovic.

[36] The wrongful acts alleged by the plaintiff against Lakovic were only coincidentally linked to United Taxi’s activities as the operator of a taxi dispatching business, in the sense that they are alleged to have taken place in a cab bearing its name and operating within its system. To impose vicarious liability upon United Taxi in these circumstances in the words of McLachlin, J. “does not respond to common sense notions of fairness.”

[37] The plaintiff’s reliance on Brophy v. United Taxi does not assist her. That case pre-dated Hryniak v. Mauldin which, as indicated above, established a new framework for motions for summary judgment and signaled a “culture shift” in moving the emphasis away from the conventional trial and towards proportional and fair access to the affordable, timely and just adjudication of claims. The Supreme Court directed that summary judgment rules must be interpreted broadly.

[38] I find that there are no issues requiring a trial with respect to the plaintiff’s claim against United Taxi.

[39] I have been able to reach a fair and just determination on the merits of the plaintiff’s claim against United Taxi based upon the motion material. The summary judgment process has allowed me to make the necessary findings of fact and to apply the law to the facts. I find that summary judgment is a proportionate, more expeditious and less expensive means to achieve a just result in respect of the plaintiff’s claim against United Taxi than allowing the claim to proceed to trial. I am able to make a determination that there are no genuine issues requiring trial in respect of the plaintiff’s claim against United Taxi based only on the evidence before me, without using the fact-finding powers in sub rules 20.04(2.1) and (2.2).

[40] The motion of the defendant United Taxi for summary judgment is therefore granted and the action against it is dismissed.

B – Plaintiff’s Motion for Leave to Amend

[41] The plaintiff’s motion for leave to amend her Statement of Claim to add Tosic as a defendant is grounded on r. 26.01 which provided that “on motion at any stage in the action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment” (emphasis added).

[42] It is noted that r. 5.04(2) provides that “at any stage of the proceeding the court may by order add, delete or substitute a party or correct the name of a party improperly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment” (emphasis added).

[43] In the case of Carom v. Bre-x Minerals Ltd., [1998] O.J. No. 4496 (S.C.J.) Winkler, J. (as he then was) observed, at para. 10, that “the proper approach on a motion of this nature [i.e. a motion to amend] is to grant the amendment unless there is prejudice which cannot be compensated for by costs or an adjournment. However, where the amendment would merely result in another proceeding to strike it out as being plain and obvious that it discloses no reasonable cause of action, or lacks a legal foundation, the amendment should be refused.”

[44] In Marks v. Ottawa (City), 2011 ONCA 248, [2011] O.J. No. 1445 (C.A.) the Court of Appeal summarized the proper factors to be considered on a motion to amend, at para. 19, as follows:

• An amendment should be allowed unless it would cause an injustice not compensable in costs.
• The proposed amendment must be shown to be an issue worthy of trial and prima facie meritorious.
• No amendment should be allowed which, if originally pleaded, would have been struck.
• The proposed amendment must contain sufficient particulars.

[45] In Royal Laser Corp. v. Rivas, 2011 ONCA 655 (C.A.) the Court of Appeal directed that, in determining whether a proposed claim are tenable at law, the motion judge cannot engage in an assessment of the merits of the claim.

[46] It follows from this that, in determining whether to grant leave to amend a Statement of Claim, the court is not to embark upon an enquiry akin to that which would be undertaken on a motion for summary judgment, but rather the proposed amended pleading is to be looked at generously to determine whether, on its face, it discloses a tenable claim, that is, that it raises one or more issues for trial and is prima facie meritorious. It is not incumbent upon the moving party to lead evidence establishing that there is a genuine issue requiring a trial, as would be the case if it were responding to a motion for summary judgment seeking dismissal of the claim.

[47] In my view the claims advanced by the plaintiff against Tosic in the proposed Amended Statement of Claim, read generously, disclose tenable claims. Whether the claims are capable of withstanding a motion for summary judgment for dismissal, or will prevail at trial, is for another day, based upon the evidence or lack of evidence at that time. Allowing the amendment to add Tosic would not cause an injustice not compensable in costs.

[48] Tosic argues that the amendment should not be allowed as it represents an abuse of process. He argues that, based upon the affidavit of Ms. Almeida, the plaintiff simply wants to join Tosic as a defendant for the purpose of having a discovery of him on the issue of insurance coverage. He points to the case of National Trust Co. v. Furbacher, [1994] O.J. No. 2385 (Gen Div.) for the proposition that it is an abuse of process to sue a defendant merely for tactical purposes such as to obtain discovery or to harass a settlement.

[49] In my view, it has not been demonstrated that the plaintiff’s motion to add Tosic as a defendant is “demonstrably a mere tactical move” (as characterized in National Trust at para. 7) or for the sole purpose of having discovery of him. Ms. Almeida’s affidavit deposes that a reason for adding Tosic is “to ensure that all essential parties are included so that the action can be heard on its merits”. It appears that Tosic, unlike United Taxi, was Lakovic’s employer and arguably was in a position to exercise control over him and his activities. I find that the plaintiff’s purpose is not simply tactical, but rather, she seeks to establish liability against Tosic. Whether there is evidence to support the imposition of such liability is not to be determined on this motion.

[50] For the reasons set forth above, the plaintiff’s motion for leave to amend the Statement of Claim in accordance with the draft Amended Statement of Claim appended as Exhibit E to the affidavit of Ms. Almeida sworn December 30, 2015 is allowed.

Costs

[51] The parties are strongly urged to settle the issue of costs of the motions. If the parties are unable to agree on costs, they may file written submissions of no more than three pages, double-spaced, in addition to any pertinent offers and draft bills of costs, within 14 days. Each party may have a further 7 days to file reply submissions, not to exceed two pages, double-spaced. Such written submissions are to be forwarded to me at my chambers at 85 Frederick Street, 7th Floor, Kitchener, Ontario N2H 0A7. If no submissions are received within this time-frame, the parties will be deemed to have settled the issue of costs as between themselves.

D. A. Broad J.

Date: September 14, 2016