Canadian Transit Company v. Corporation of the City of Windsor

COURT FILE NO.: CV-16-00024029-0000

DATE: 20180619

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Canadian Transit Company

Plaintiff and Responding party

– and –

Corporation of the City of Windsor

Defendant and Moving party

COUNSEL:

Sheila Block and Emily Sherky, for the Plaintiff

Christopher J. Williams and Courtney Raphael, for the Defendant

HEARD: May 28, 2018

BONDY J.

A. INTRODUCTION

1) The motion

[1] This was a motion brought by the defendant and moving party, the Corporation of the City of Windsor (“Windsor” or “the City”). There were three overarching heads of substantive relief.

[2] The first was an order striking out the statement of claim of the plaintiff and responding party Canadian Transit Company (“CTC”) in its entirety, without leave to amend, for failure to disclose a reasonable cause of action. The relief was sought pursuant to r. 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“the Rules”).

[3] The second was for the action to be dismissed, pursuant to r. 21.01(3)(a), on the basis that the court has no jurisdiction over the subject matter. This was not pursued in any meaningful way by counsel for Windsor.

[4] The third was for the action to be dismissed, pursuant to r. 21.01(3)(d), on the basis that the action is frivolous or vexatious or otherwise an abuse of the process of the court.

2) Background

a) Introduction

[5] The plaintiff owns and operates the Ambassador Bridge (“the existing bridge”), which is an international border crossing between Canada and the United States. The Canadian side of the bridge and accompanying facilities are located within the geographic boundaries of the City of Windsor.

[6] Beginning in 2004, the plaintiff began acquiring additional lands (the “properties”) west of the bridge in the area surrounding the original footprint of the bridge and accompanying facilities (the “existing bridge envelope”). The reason for the acquisitions was to build either a second span or a replacement bridge (“the new bridge”). In all, 114 homes were acquired through that process.

[7] A great deal of conflict followed those acquisitions as between CTC, Windsor, and the surrounding neighbours in what is known as the Olde Sandwich Town neighbourhood (the “Sandwich neighbourhood”).

[8] Sometime after CTC acquired the homes most or all of them were vacated and boarded up. The residents of the Sandwich neighbourhood maintain that the result was urban blight. That proposition is at the heart of this conflict.

[9] Many of those neighbours have been involved in litigation with CTC and Windsor over the issue. For example, there are currently five nuisance actions by neighbours as against CTC (“the nuisance actions”).

[10] The action brought by CTC, which underlies this motion is for contribution and indemnity from Windsor, related to those nuisance actions. It was brought as a separate action rather than a third-party claim because Windsor is a municipality and the plaintiffs in those actions had served a jury notice. Counsel for Windsor did not suggest any impropriety in CTC having proceeded in this manner.

[11] There was no explanation as to why the neighbours had not joined Windsor in their nuisance actions. Presumably that was also a result of a desire to proceed with a jury trial.

b) The positions of the parties

[12] CTC and Windsor each blamed the other for the alleged urban blight complained of by the area residents. Each gave extensive reasons for laying that blame. The more prominent of those reasons are as follows.

[13] The first aspect of CTC’s position relates to the pace of demolition. CTC takes the position that had Windsor allowed the demolitions to occur in a timely fashion then the alleged neighbourhood blight would not have occurred. CTC maintains that Windsor enacted a series of zoning, demolition control and heritage designation by-laws between 2007 and 2009 (“the by-laws”) and the by-laws made it impossible to demolish the buildings as CTC had intended. CTC maintains that Windsor improperly refused demolition permits. CTC says that Windsor was without jurisdiction to enforce its by-laws regarding demolition permits within a federal undertaking and that Windsor’s refusal to issue demolition permits was done for improper motives.

[14] In the interests of clarity, as of the date of the hearing of this motion, most of the houses have been demolished.

[15] Windsor acknowledged that the Ambassador Bridge is a federal undertaking. Windsor however maintained that it had jurisdiction to refuse demolition permits unless there was a conflict between its demolition control by-law and the governing federal legislation. Consistent with that proposition, Windsor acknowledged the lack of jurisdiction once a federal permit was obtained pursuant to the International Bridges and Tunnel Act, S.C. 2009, c.1 (“IBTA”).

[16] For reasons that were not entirely clear, the threshold issue of jurisdiction has never been adjudicated. Although a proceeding was brought in Federal Court that court declined to hear the matter on the basis of jurisdiction. That decision was upheld by the Supreme Court.

[17] Windsor also strenuously argued that the validity of those by-laws was finally determined by Gates J. and that CTC continues to challenge the validity of those by-laws in these proceedings. CTC maintains that is a mischaracterization of its pleadings.

[18] Windsor also maintained that it has no responsibility for the alleged urban blight in any event. It argued that CTC could have continued to maintain the houses and rent them out to tenants while seeking its approvals for the new bridge. Windsor proposed that CTC was always free to apply for demolition permits and, if refused, appeal the decision to the Ontario Municipal Board pursuant to s. 33(4) of the Planning Act, R.S.O. 1990, c. P. 13, as amended. In other words, the City also maintained that CTC failed to exhaust other more appropriate avenues of appeal.

3) Relevant related litigation

[19] Since there is considerable litigation related to CTC’s ambitions to build a second bridge there are several proceedings of particular significance to this motion.

[20] The five nuisance actions referred to above, which were commenced by neighbours in 2013 and 2014, include:

a. CV-13-19777: Giuseppe Desando, and Immacolota Desando, Raffaele Desando, Guilio Desando, Joseph Anthony Desando, and Stephen Chaborek v. The Canadian Transit Company (the “Desando action”);

b. CV-13-20040: Louis Driessen, Bernice Driessen, Shawnn Ryan Sharpe, Carla Elisabeth Wiedemann, Sheila Maureen Libby, Corey Paterson, Gerald Paterson, Marilyn Paterson, Llloyd Perkins and Frances Trombley v. The Canadian Transit Company (the “Driessen action”);

c. CV-13-20041: Hayat Selman, Alicia DeSousa, David Fehrenbach, Hassen Pahary, Jennifer Dawn Neilsen, Gary Anthony Neilsen, Mary Agnes Demarco, Lucille Mary Warnock, John Lewis Warnock, Mark Steven Nantais v. The Canadian Transit Company (the “Selman action”);

d. CV-13-20042: Hilda Poitras, John Tonch, Heidi Korenic, Jagdeep Dhamrait, Jason Roe, Michael Maurice May and Rosemary Sandra May v. The Canadian Transit Company (the “Poitras action”); and

e. CV-14-21645: Yuri Vlasov, Robert Ingratta, Martha Anne Ingratta, 1394086 Ontario Limited and Michael Gerard Albert Cardinal v. The Canadian Transit Company (the “Vlasov action”).

[21] All of the plaintiffs in all five actions are represented by the same law firm. The claims by each of the plaintiffs of the above actions are almost identical. Each of the plaintiffs in these five actions seeks $250,000 for nuisance as a result of a decrease in the value of their homes, and diminished enjoyment of said homes; and $5,000,000 for punitive damages. Several who are landlords also seek an additional $200,000 each for special damages for lost rents.

[22] The Desando action has already been tried, the other four have not. Justice Carey released his decision in the Desando matter on March 19, 2018: see Desando v. Canadian Transit Company, 2018 ONSC 1859. That decision is currently under appeal. I was told the Desando action was a test case for all five and that resolution of all the cases was likely once all appeals have been exhausted in the that matter.

[23] In addition to those actions, there was also an application heard in 2011 which has some relevance to the issues between the parties: that is Payne v. Windsor (City), 2012 ONSC 4728 (the “Payne application”), sometimes referred to in the materials by court file number CV-10-14295).

[24] In that proceeding the two applicants, Hilary Payne (“Payne”) and Lawrence Leigh (“Leigh”), presented a petition signed by approximately 200 people belonging to a citizens group who live in Olde Sandwich Towne, and who were variously affected by the existence of the approximately 114 houses owned by CTC. The petition called for the demolition of those houses. In other words, the interests of the applicant in the Payne application and CTC, who was a respondent in that application, were more or less the same.

[25] I was told by counsel that many of the people who signed that petition were also plaintiffs in the nuisance actions. Said another way, had the neighbours been successful in that application the offending houses would likely have been demolished in 2011 and these nuisance lawsuits likely avoided.

[26] By order of Thomas J., dated September 21, 2010, two additional proceedings brought by CTC were stayed pending the outcome of the Payne decision: CV-10-395654 and CV-10-405347; both brought by CTC. Both involved the same houses which are at issue in this litigation. By Thomas J.’s order, the determination in the Payne decision of the validity of the by-laws passed by the City that affected those houses would bind the parties in all proceedings. Justice Gates determined that the by-laws were valid and passed in good faith and accordingly dismissed the application.

4) The action underlying this motion

a) Introduction

[27] The statement of claim in this matter was issued September 4, 2015. I reiterate that the overarching substantive relief sought by the plaintiff in this action includes contribution and indemnity for any damages or compensation resulting from the above five nuisance actions, as well as legal fees and/or costs of those actions incurred by CTC on a full indemnity basis.

b) Prior judicial decisions where the alleged urban blight has been considered

[28] The decision in the Payne application referred to above was released by Gates J. on September 12, 2011: see 2011 ONSC 5123, [2011] O.J. No. 6134 (QL).

[29] At paragraph 61 [cited to QL] of his decision Gates J. states the following:

I conclude that there is no nexus between the by-laws and the scenes of blight attributable to the houses in question. It is to be remembered that there was neither blight nor abandoned houses until CTC started to buy them in 2004, many years before the city commenced its Community and Heritage Studies which led to the by-laws being passed. The blight was caused by the 112 or so houses being boarded up by CTC; by contrast, the by-laws are the result of an evolutionary process begun by the city in recognition of the desirability to protect Sandwich Towne’s unique character.

[30] In the next paragraph, Gates J. accepted the evidence of the then-Mayor of Windsor to the effect that a bridge official by the name of Mr. Stamper had told the Mayor that it would not be in CTC’s interest to demolish the homes. In other words, Gates J. concluded that CTC had no interest in demolishing the houses. At paragraph 69, Gates J. goes on to observe that CTC had not exercised its right to appeal either the Community Improvement by-law or the refusals to issue demolition permits. Justice Gates concludes that CTC “chose not to deal with the blight it created.”

[31] Those findings, however, must be considered in the context of the observations of Gates J. regarding the quality of the evidence in that application. Those observations are more fully considered below.

[32] In his decision in the Desando action, Carey J. appears to come to the opposite conclusion. He begins by finding that the empty houses do not constitute a recoverable nuisance.

[33] At paragraph 62 of his decision, Carey J. concludes that even if he had found an actionable nuisance

[I]t was very clear on all of the evidence that it was the City that was responsible for their [the houses] continued presence through their decision not to issue demolition permits, despite an order relating to the majority of the houses from the land use planning committee. I reject that the CTC should have defied the law and proceeded without permit to demolish the buildings. That conduct, in my view, would have been illegal, unsafe and would likely have hardened public opinion against the Bridge.

[34] I make two comments as to that language. The first is that the conclusion that the City was responsible for the houses being in their current condition is clearly obiter given that the City was not a party to that action. The second is that, as said above, the decision is currently under appeal.

[35] That said, the language chosen by Carey J. tends to support the plaintiff’s proposition that it is not plain and obvious that the statement of claim fails to disclose a reasonable cause of action in that regard.

[36] That observation finds support in the allegations in the statement of claim that then-Mayor Eddie Francis is quoted in the newspaper as having said “we have to make sure they don’t demolish these homes.” Those comments are quite different than those relied upon by Gates J. in reaching his conclusion that it was CTC, rather than Windsor, who did not want to demolish the houses.

[37] In other words, two judges have turned their minds to who is responsible for the continuing existence of the houses, and the condition those houses are in, and come to different conclusions as to both questions.

[38] CTC maintains that those decisions alone confirm that it is not plain and obvious that it does not have a cause of action as against Windsor for the alleged nuisance resulting from the continued existence of those homes.

B. ANALYSIS

1) Introduction

[39] The jurisdiction to strike out a pleading on the ground that it discloses no reasonable cause of action or defence is found in r. 21.01(1)(b). The rule is designed to essentially weed out hopeless claims: see R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at para. 19.

[40] In a motion to strike pleadings, no evidence is admissible: see r. 21.01(2)(b). That said, a document incorporated by reference into the pleading, and that forms an integral part of the factual matrix of the statement of claim may properly be considered on a motion to strike: see McCreight v. Canada (Attorney General), 2013 ONCA 483, 116 O.R. (3d) 429, at para. 32; Montreal Trust Co. of Canada v. Toronto Dominion Bank (1992), 40 C.P.C. (3d) 389, at para. 4.

[41] The case law imposes a very low standard for a plaintiff to demonstrate a cause of action: see: Millwright Regional Council of Ontario Pension Trust Fund (Trustees of) v. Celestica Inc., 2012 ONSC 6083, 113 O.R. (3d) 264, at para. 57. It follows that to succeed on a motion to strike pleadings the moving party must meet a very high threshold: see Rausch v. Pickering (City), 2013 ONCA 740, 369 D.L.R. (4th) 691, at para. 34; Amato v. Welsh, 2013 ONCA 258, at para. 33; Millwright Regional Council, at para. 57.

[42] The applicable test on the motion to strike is whether it is “plain and obvious” that the plaintiff's statement of claim discloses no reasonable cause of action”: see Imperial Tobacco, at para. 17, Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959 at p. 980; Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263, at para. 15, Belanger and Associates Ltd. v. Stadium Corp. of Ontario Ltd., (1992), 1991 CanLII 2731 (ON CA), 5 O.R. (3rd) 778 (C.A.), at p. 780. However, where there is a reasonable prospect of success, the matter should be allowed to proceed to trial: see Imperial Tobacco, at para. 17; Syl Apps Secure Treatment Centre v. B.D., 2007 SCC 38, [2007] 3 S.C.R. 83; Odhavji Estate; Hunt; Attorney General of Canada v. Inuit Tapirisat of Canada, 1980 CanLII 21 (SCC), [1980] 2 S.C.R. 735.

[43] In conducting the analysis, the statement of claim must be read generously with allowance for inadequacies due to drafting deficiencies: see Biladeau v. Ontario (Attorney General), 2014 ONCA 848; Nash v. Ontario, 1995 CanLII 2934, 27 O.R. (3d) 1 (C.A.), at para, 11; Toronto-Dominion Bank v. Deloitte Haskins & Sells (1991), 1991 CanLII 7366 (ON SC), 5 O.R. (3d) 417 at p. 419, (Gen. Div.). When in doubt, the judge should air on the side of permitting an arguable claim to proceed to trial: see Rausch v. Pickering (City) at p. 455.

[44] In conducting the analysis, the facts pleaded are assumed to be true: see Imperial Tobacco, at para. 70; Nash, at para. 11. That is unless the allegations in question are patently ridiculous, incapable of proof, or are allegations based on assumptions and speculation that are incapable of proof: see Nash, at para. 11; Operation Dismantle Inc. v. The Queen, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441, at para. 27.

[45] In the end, a litigant’s pleading should not be lightly struck. Where potentially fatal deficiencies in the pleadings are found, the court should direct its mind to whether the particular deficiency, or deficiencies, could be cured through an appropriate amendment to the pleading. If so, the question becomes whether or not granting leave to amend would prejudice the other party or parties. Typically, leave to amend should only be denied in the clearest of cases: see South Holly Holdings Ltd. v. Toronto-Dominion Bank (c.o.b. TD Canada Trust), 2007 ONCA 456, at para. 6.

[46] I will review positions of the parties as against those principles.

2) Is there a reasonable cause of action for contribution and indemnity related to the neighbours’ nuisance actions based upon CTC’s allegations that the City has improperly delayed and hindered it from demolishing the buildings?

a) Introduction

[47] Counsel for the moving and responding parties agree that CTC has a cause of action for contribution and indemnity against Windsor if the plaintiffs in the nuisance actions have a cause of action against Windsor.

[48] I will consider each of Windsor’s arguments put forth in support of the proposition that it is plain and obvious that there is no reasonable cause of action for contribution and indemnity from Windsor related to the neighbours’ nuisance actions. I will do so in no particular order.

b) Was there a relationship between the failure to issue demolition permits and the urban blight alleged in the nuisance actions?

[49] Windsor maintains that the subject houses were not under the control of the municipality and that the refusal of the demolition permits was not the cause of the condition the buildings were in. Windsor maintains that CTC could have left the homes occupied and maintained during the approval process.

[50] CTC maintains that is a mischaracterization of its position. CTC relies upon the plain language of the statement of claim in this action. It clearly asserts that that the nuisance actions relate “to the presence of the boarded-up houses in Sandwich”. In other words, it is the position of CTC that it is the continued existence of those homes and the impact of their existence on the neighbours that is a central issue in this action. CTC maintains that but for the unlawful failure of Windsor to issue the demolition permits the houses would have been demolished.

[51] I reiterate that in support of that position CTC maintains that Windsor’s refusal to issue demolition permits was flawed in two fundamental ways.

[52] The first was that Windsor lacked jurisdiction to enforce its by-laws within a federal undertaking. The issue of jurisdiction is more fully considered below.

[53] The second was the assertion that demolition permits were withheld for an improper motive. CTC asserts that the decision of Windsor’s Property Standards Committee can be used as a measure of Windsor’s motives and the reasonableness of the decision to withhold demolition permits.

[54] In that regard, CTC pleaded that the chief building official issued 114 orders to repair the houses under the Windsor’s property standards by-law. CTC maintains that Windsor improperly directed the chief building official to do so. When CTC appealed Windsor’s decision, Windsor’s Property Standards Committee amended the orders for repair of 83 of the properties by ordering CTC to demolish the houses located on those properties forthwith.

[55] I am aware that decision is currently under appeal by Windsor because Windsor maintains that the Property Standards Committee acted outside of the scope of its authority in making the demolition orders. That said, I agree with the proposition put forth by CTC to the effect that it would be open to the finder of fact to potentially consider the decision of the Property Standards Committee when assessing the reasonableness and bona fides of Windsor’s decision to withhold demolition permits.

[56] For these reasons, and the reasons above and below, I find it reasonably plausible that CTC may be able to demonstrate at trial that there is a relationship between the failure to issue demolition permits and the urban blight alleged in the nuisance actions, and that as a result CTC may be entitled to contribution and indemnity from Windsor.

c) Can a municipality be liable for nuisance where the alleged nuisance did not originate from lands owned by or under the control of the municipality?

[57] Counsel for Windsor maintains that they were unable to find any cases where a municipality was successfully sued for nuisance where the nuisance did not originate from lands owned by or under the control of the particular municipality. I make the following observations in that regard.

[58] The first is that there is case law that has held that a municipality can be liable for nuisance that did not originate from lands owned by or under its control. For example, the City of Ottawa was held liable for damages in nuisance to a dam owner as a result of flooding which occurred because Ottawa was found negligent in the way it managed its ice management program within that river: see Rideau Falls Generating Partnership v. Ottawa (City), 1999 CanLII 2132, 174 D.L.R. (4th) 160 (C.A.). I have no doubt that the City of Ottawa does not own the Ottawa River.

[59] Even if I am wrong, it seems to me that the law is well settled that the novelty of a cause of action should not prevent the plaintiff from proceeding with its case: see Hunt v. Carey Canada Inc., at pp. 980, 990–991; Belanger and Associates Ltd., at p. 780–783. Actions that are not possible one day may succeed the next: see Imperial Tobacco, at para. 21.

d) The issue as to Windsor’s jurisdiction over the lands within a federal undertaking

[60] Central to the difference between the positions taken by the parties is the issue of jurisdiction over the lands upon which the 114 houses are or were located.

[61] CTC maintains that the lands are part of a federal undertaking, and the houses located on the lands that are part of its mandate and undertaking. CTC maintains that its decisions with respect to those lands cannot be interfered with by Windsor.

[62] In support of that proposition, CTC observes that it was incorporated under An Act to Incorporate the Canadian Transit Company, 11-12 George V., 1921, c. 57 (the “Special Act”). Section 8(e) of the Special Act provides that:

[T]he Company may purchase, lease or otherwise acquire and hold lands for the bridge, tracks, terminal yards, accommodation works and facilities, and construct an erect and maintain buildings and other structures required for the convenient working of traffic to, from and over the said bridge, and for said lines of railway as the Company thinks necessary for any of the said purposes.

[63] As an aside, that language must be read with the fact that the bridge was originally intended to also carry railway traffic in mind.

[64] While it is beyond the scope of this motion for me to give a final determination of the meaning of that language, I find it quite broad and potentially capable of the interpretation given to it by CTC.

[65] The authority under the Special Act is by the language of that Act specifically subject to the provisions of the Railway Act, 1919, 9–10 George V., 1919, c. 68, c. 68, and the Navigable Waters Protection Act, 8–9 George V., 1918, c. 33. The Special Act is also subject to the provisions of the IBTA to the extent of any inconsistency or conflict between the two Acts: see s. 4(1).

[66] Based on its interpretation of the authority granted to it by the Special Act, CTC maintains that Windsor exceeded its jurisdiction by refusing demolition permits.

[67] To the contrary, Windsor maintains that its by-laws apply within the federal undertaking unless there is a conflict between the by-laws and the relevant federal legislation. Windsor maintains that in this case there was no conflict between their by-laws and any federal legislation until demolition permits were issued pursuant to the IBTA in 2017. As a result, Windsor acted within their jurisdiction in refusing demolition permits.

[68] Windsor relies upon the provisions of s. 14(1) of the Municipal Act, 2001, S.O. 2001, c. 25 in support of that contention. That section provides that a by-law is without effect to the extent of any conflict with a federal Act or regulation made under such an Act.

[69] Windsor’s position finds support at paragraph 2(c) of the order of Gates J. in the Payne application. It provides that “the city recognizes that if it is determined that the second span is found to be a federal undertaking, the by-laws cannot be applied to them as provided for in s. 14 of the Municipal Act, 2001 (Ontario).”

[70] It seems to me the proposition put forth by CTC in its action against Windsor, however, may not fall within the scope of the particular language cited in Gates J.’s judgment. There are two reasons.

[71] The first is that, as said above, CTC maintains that the municipality simply does not have any jurisdiction as a result of the language in the Special Act. I do not find it plain and obvious that said argument is incapable of success at trial. Further, for reasons more fully considered below, it seems to me that Gates J. may not have finally decided that issue. The thrust of his decision related to the validity of the by-laws rather than their application to these particular lands. In any event, if that argument is accepted at trial, a claim for contribution and indemnity may well succeed.

[72] The second is that even if CTC is unsuccessful in that argument, it may be successful in establishing that conflict existed between the municipal by-laws and federal legislation prior to the issuance of the demolition permits pursuant to the IBTA. I say that because s. 14(2) of the Municipal Act, 2001 provides that there is a conflict between a by-law of a municipality and an Act if the by-law frustrates the purpose of the Act. On the record before me, I find it plausible that CTC may be able to demonstrate that the by-laws enacted by Windsor that prevented the demolition of the buildings located within its federal undertaking frustrated the purposes of the Special Act.

[73] As a result, I find that the jurisdictional issue is clearly a very live issue.

e) Contribution from joint tortfeasors

[74] Windsor also maintains that that there is no right to contribution from joint tortfeasors at common law, and that the sole authority for a claim for contribution and indemnity against third parties arises under s. 1 of the Negligence Act, R.S.O. 1990, c. N.1. Windsor relies upon paragraph 5 of the decision in A.O. v. J.V., 2002 CanLII 41072, 59 O.R. (3d) 384 (C.A.), in support of that contention.

[75] Windsor maintains that as a result, in order for the plaintiff to succeed in this action, it must establish that the plaintiffs in the nuisance actions have a cause of action against Windsor in negligence. Windsor maintains that in order to do so the plaintiff must establish that Windsor was directly responsible for the creation of the impugned nuisance, namely the disrepair of the buildings.

[76] For the following reasons, I do not find that argument determinative of the issue of contribution from joint tortfeasors in these circumstances.

[77] I begin with the observation that I find Windsor’s interpretation of s. 1 of the Negligence Act overly narrow. There is judicial authority to support the proposition that fault and negligence, as these words are used in ss. 1 and 4 of the Negligence Act, are not the same. While fault includes negligence, it is much broader in scope and incorporates all intentional wrongdoing as well as other substandard conduct: see Bell Canada v. COPE (Sarnia), [1980] O.J. No. 69 (QL), at para. 26. There is also judicial authority for the proposition that the word “fault” as used in those sections encompasses both intentional and negligent torts: see Anderson v. Stevens, 1981 CanLII 285, 125 D.L.R. (3d) 736, (B.C. Sup. Ct.), at para. 25; Harland v. Fancsali, 1993 CanLII 8457, 13 O.R. (3d) 103 at p. 117; Linden, Canadian Tort Law, 10th ed. (Toronto: Butterworths, 2015), pp. 114–115.

[78] Further, I find the language in A.O. that follows the quote relied upon by Windsor to be consistent with those observations. There the court observes that the effect of the legislation is to change the common law and impose joint and several liability on concurrent wrongdoers.

[79] In other words, there is support in the case law for the proposition that persons who are either at fault or negligent can be jointly and severally liable and, as a result, entitled to contribution and indemnity from the other to the extent of fault. Where it is not practical to determine the respective degree of fault, liability will be on the basis of equal liability.

f) Immunity from prosecution

[80] Windsor also maintains that municipalities are generally immune in relation to acts conducted in pursuance or in implementation of by-laws. I agree with that general proposition: see, Welbridge Holdings Ltd. v. Winnipeg (Greater), 1970 CanLII 1 (SCC), [1971] S.C.R. 957, at pp. 968–970.

[81] That general proposition is however subject to exceptions.

[82] One example is an allegation of bad faith: see Hedrich v. Alfred and Plantagenet (Township), [2001] O.J. No. 4194 (QL), at para. 7. I reiterate that in this case CTC maintains that the decision to withhold demolition permits was made in bad faith, maliciously, and without jurisdiction.

[83] For the reasons above and below, on the record before me, I conclude that said argument has potential merit based upon the facts pleaded.

[84] Windsor also asserts that there is no cause of action against a municipality for a policy decision, in this case related to the passage of the demolition control by-law. Windsor further maintains that the decision to issue demolition permits was the exercise of the discretion pursuant to that policy decision, and that, accordingly, they are entitled to immunity: see Imperial Tobacco, at paras. 95 & 146.

[85] In support of that proposition Windsor relies upon the provisions of 450 Municipal Act, 2001, which provides that:

No proceeding based on negligence in connection with the exercise or non-exercise of a discretionary power or the performance or non-performance of a discretionary function, if the action or inaction results from a policy decision of a municipality or local board made in a good faith exercise of the discretion, shall be commenced against,

(a) a municipality[.]

[86] There are four overarching aspects to the position of CTC regarding this issue.

[87] The first is that CTC maintains that the statutory immunity provided by the Municipal Act, 2001 does not apply to nuisance cases. I agree with that proposition: see Guinan v. Ottawa (City), 2010 ONSC 807, at para. 135; Clemmens v. Kenora (Town), [1999] O.J. No. 3915 (QL) (Sup. Ct.).

[88] The second is that, as said above, CTC maintains that Windsor exceeded its jurisdiction when it purported to enforce its by-laws contrary to CTC’s mandate under the Special Act. If CTC is successful in proving that at trial, it may also be successful in demonstrating that there is no municipal immunity for bad faith conduct or conduct that exceeded Windsor’s jurisdiction.

[89] The third is that CTC maintains that Windsor has mischaracterized the issue. CTC maintains that it is not attacking the City’s policy decision to enact the by-laws, but rather its operational decision to unlawfully and improperly deny demolition permits. It maintains that the process of assessing and granting or refusing demolition permits does not engage policy concerns, and is operational in nature. Again, I agree with that statement of the law: see Wu v. Vancouver (City), 2017 BCSC 2072, at paras. 147–148; Papadopoulos v. Edmonton (City), 2000 ABQB 171, at para. 82.

[90] The fourth, which is related to the third, is that the City’s operational decision to refuse to issue demolition permits was not done in good faith. CTC gave several reasons in support of that proposition.

[91] As an example CTC maintains that then-Mayor Eddie Francis characterized as “disgusting” what he described as CTC’s creation of neighbourhood blight. CTC also maintains that Francis said that the City has “to make sure they don’t demolish these homes.”

[92] I am aware that Windsor maintains that the Mayor could not bind Windsor by those comments. For reasons which follow, I conclude that the issue of whether or not Windsor can be bound by comments from its mayor is a question of fact to be determined at trial.

[93] As a second example, CTC maintains that in some cases there were buildings owned by it that were significantly damaged beyond repair by fires. In other words, the buildings were not worth preserving. Notwithstanding, the City refused to issue demolition permits.

[94] CTC pleaded that by contrast demolition permits were granted to others affected by the by-laws within the relevant timeframe. In other words, CTC maintains that Windsor gave different treatment to different applicants in the decision-making process related to the issuing demolition permits. Again, if CTC is successful in establishing those facts at trial, it may also be successful in establishing that the City acted both with malice and outside the scope of its authority, and that but for those actions the buildings at the centre of this dispute would have been demolished long ago.

[95] As a third example, CTC maintains that Windsor unlawfully influenced its own chief building official in a manner intended to harm CTC. CTC pleaded that Windsor had regularly inspected all 114 houses and not found any problem with them for several years. Suddenly, the chief building official issued 114 orders for repair. CTC maintains that the temporal proximity between those orders and the Desando nuisance action is suspect.

[96] When CTC appealed those 114 orders to the Property Standards Committee they were successful in obtaining orders to demolish 83 of the houses in question. CTC maintains that the decision of the Property Standards Committee supports the proposition that the City ought to have issued demolition permits when requested and that had it done so, the buildings would have been demolished long ago thereby avoiding the situation which lies at the heart of this action.

[97] In conclusion, CTC maintains that Windsor does not have immunity from the proposition that the City’s conduct, in refusing the demolition permits was not act in good faith because it exceeded its jurisdiction and because the decision should have been an operational decision and not an exercise of discretion as a result of a policy decision: see Rausch v. Pickering (City), at para. 12; Raubvogel v. Vaughan (City), 2016 ONSC 7478, at paras. 50–51.

[98] I agree with the position of CTC that if these allegations can be proven, Windsor may not be immune to tortious liability for that conduct.

g) The sufficiency of the pleadings

[99] Windsor maintains that CTC’s pleadings are deficient. There were three examples relied upon by Windsor.

[100] The first is that CTC has not pleaded any actions done by Windsor that caused the nuisance alleged in the nuisance actions. The second is that CTC has not pleaded all the requisite elements of misfeasance in office. The third is that CTC has not specifically pleaded negligence on the part of Windsor.

The actions done by Windsor that caused the alleged nuisance

[101] At the heart of this position is the suggestion by Windsor that CTC could have either left the homes occupied and maintained them or, in the alternative, demolished them.

[102] I disagree with that suggestion. CTC’s pleadings clearly assert that “Windsor unlawfully and improperly delayed and hindered CTC from demolishing the boarded-up houses located on the properties.”

[103] In support of CTC’s proposition, the pleadings refer to specific actions on the part of Windsor including, without limitation, what CTC alleges is the wrongful withholding of demolition permits, and language on the part of Windsor’s officials that Windsor knew or ought to have known would have emboldened the neighbours to sue CTC.

[104] In other words, CTC maintains that the source of the alleged nuisance based around urban blight was the City’s wrongful prevention of the demolition of houses within a federal undertaking. In support of that contention, CTC drew my attention to paragraph 43 of the decision of Carey J. where he stated, “I cannot conclude that the defendant had an obligation in law to keep up the unoccupied houses to a fit level for occupancy and occupied while they waited for final approval from the federal government or permission to tear down the houses.” I reiterate that decision is under appeal. Even so, it seems to me that it is not plain and obvious at this stage that the Court of Appeal may not reach the same conclusion when that appeal is ultimately heard.

Misfeasance in office

[105] There are two components to Windsor’s position regarding improper pleading of misfeasance in public office. The first is that Windsor cannot be liable for comments attributed to its elected officials. The second is that CTC has not pleaded all of the requisite elements of misfeasance in public office, including particulars of the specific acts complained of: see r. 25.06(8).

[106] I do not accept Windsor’s suggestion that it is impossible for the comments of elected officials to be attributed to the municipality. That seems to me that a question based upon the particular fact situation.

[107] For example, as was observed by counsel for Windsor in Vaughan (City) v. Ruffolo, [2009] O.J. No. 3107 (QL) and Porky Packers Ltd. v. The Pas (Town), 1976 CanLII 147 (SCC), [1977] 1 S.C.R. 51, at p. 55, the comments of the Mayor were held not to bind the municipality and as a result no liability could be assessed against the municipality. On the other hand, in Georgian Glen Development Ltd. v. Barrie (City), 2005 CanLII 31997, there was improper conduct by several municipal officials over an extended period of time and the court held that such conduct can be an abuse of process which renders a municipal corporation liable for misfeasance in public office. As in this case, the individual officials were not named in the action.

[108] In summary, if the elected official was acting with authority then the municipality will likely be bound. On the other hand, if the elected official was acting alone then the municipality will likely not be bound. It necessarily follows that the question of whether or not the language used by municipal officials from time-to-time can be attributed to the municipality is a live issue for trial.

[109] As to the sufficiency of the pleadings regarding misfeasance in public office, the law is well established that the focus is upon the substance of the pleading and not its form: see Rausch v. Pickering (City), at para. 95; Lawrence v. Peel Regional Police Force, 2005 CanLII 3934, 250 D.L.R. (4th) 287 (C.A.), at paras. 4–5. Where the factual matrix pleaded supports the particular conclusion, that is sufficient: see Rausch, at para. 95.

[110] I find that the statement of claim made it clear that CTC is alleging misfeasance in public office.

[111] I reiterate that Windsor maintains that CTC has not pleaded all of the requisite elements of misfeasance in public office, including particulars of the specific acts complained of.

[112] While I agree with Windsor that the elements are not specifically delineated, I also agree with CTC that on the facts pleaded the elements are sufficiently made out in the statement of claim.

[113] I find that any shortcoming could be easily overcome by granting leave to amend the pleadings in that regard.

[114] Although amendments are presumptively approved, there is no absolute right to amend pleadings: see Marks v. Ottawa (City), 2011 ONCA 248, at para. 19. The factors to be considered are those first set out in Simrod v. Cooper, [1952] O.W.N. 720 (H.C.J. Master) at p. 721, aff'd at p. 723 (H. Ct. J.), and quoted with approval in Vaiman v. Yates (1987), 1987 CanLII 4345 (ON SC), 60 O.R. (2d) 696 (H. Ct. J.) at p. 698, and Marks v. Ottawa at para. 19. They are as follows:

a. An amendment should be allowed unless it would cause an injustice not compensable in costs;

b. The proposed amendment must be shown to be an issue worthy of trial and prima facie meritorious;

c. No amendment should be allowed which, if originally pleaded, would have been struck; and

d. The proposed amendment must contain sufficient particulars.

[115] I conclude that there is no injustice that would not be compensable in costs. The factual matrix pleaded sufficiently put Windsor on notice that misfeasance in public office was a live issue for trial. In other words, there are no surprises to Windsor in this regard. For the reasons above I find the issue of misfeasance in public office to be worthy of trial and prima facie meritorious. For the reasons above, I also find that such an expanded pleading would not have been struck if originally pleaded. Fairness requires that leave for amendment be granted.

Has CTC properly pleaded negligence?

[116] Windsor maintains that CTC’s claim for negligence against it cannot succeed. Windsor maintains that CTC has not pleaded negligence, nor has it pleaded a duty of care, a standard of care, a breach of any standard of care, nor how any possible breaches led to the alleged damages suffered by CTC, or the legal costs incurred by CTC in the nuisance actions. Windsor further maintains that even if CTC had pleaded negligence it is not plain and obvious that the City owed it a duty of care when it improperly denied demolition permits.

[117] I begin with the observation that paragraph 1(a) of the amended statement of claim states that CTC claims “contribution and indemnity for any damage or compensation, whether by adjudication or settlement (“damages payments”), for which CTC is found liable” in the five nuisance actions. While I agree with the proposition that the word “negligence” is not used by CTC, I find the wording broad enough to include contribution and indemnity for any negligent conduct on the part of Windsor that caused or contributed to the damages sought in the nuisance actions.

[118] Further, when that language is read in the context of the factual matrix pleaded, it is clear that the damages sought by CTC are in relation to both intentional and negligent acts on the part of Windsor that caused or contributed to the damages sought in those actions. For example, at para. 61 of the amended statement of claim, CTC specifically references the Negligence Act in relation to the issue of contribution and indemnity.

[119] This issue shares many of the features of the issues related to misfeasance in public office discussed immediately above. The factual matrix pled makes it clear that CTC is claiming Windsor was negligent. There was nothing to suggest that allowing a pleading would result in any injustice to Windsor not compensable in costs. For the reasons above and below, I find the issue is clearly worthy of trial and prima facie meritorious. Further, I can think of no reason an amendment in that regard would have been struck if originally pleaded. Again, I conclude that fairness requires that leave for amendment be granted.

h) Windsor argues that the issue of nuisance was already decided in the Desando action

[120] Windsor maintains that the matter has already been decided in the Desando action. In that action the plaintiffs failed to establish that the vacant houses constituted compensable private nuisance. I find this argument premature since the Desando matter is currently under appeal.

[121] Even if Desando were not under appeal, I reiterate that Carey J. reached a different conclusion as to who was responsible for the alleged urban blight than did Gates J. As is more fully considered below in the context of issue estoppel, Gates J. observed that he did not have a satisfactory evidentiary record before him, and that as a result a merits based decision was made much more difficult for him.

[122] For these reasons, and the reasons immediately following, I disagree with Windsor’s proposition that the issue of whether or not there was a nuisance has already been judicially determined.

3) Has the issue as to whether or not the City has improperly delayed and hindered CTC from demolishing the buildings already been decided?

a) Introduction

[123] There are two predominant propositions put forth by Windsor in this regard.

[124] The first is that this action is an abuse of process because CTC has, in numerous prior court proceedings, previously sought to challenge the by-laws that CTC maintains prevented them from demolishing the houses. The second is that issue estoppel prevents a litigant from re-litigating an issue that has been clearly decided by a court of competent jurisdiction in a previous proceeding.

[125] I reiterate that CTC maintains that these assertions by Windsor are a mischaracterization of its position. CTC maintains that this claim does not relate to the validity of the by-laws but rather relates to the damages that CTC has sustained because Windsor wrongfully used those by-laws to prevent the demolition of the 114 houses in issue. CTC maintains that as a result of that conduct it has been forced to defend the five nuisance actions.

b) Abuse of process

The principles

[126] As to the issue of abuse of process, moving parties’ counsel observes that “judges have a discretion which is both an inherent and residual to prevent an abuse of the court’s process. In order to be characterized as an abuse of process the result must be “unfair to the point that they are contrary to the interest of justice” or an “oppressive treatment”: see Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, at para. 35; R. v. Power, 1994 CanLII 126 (SCC), [1994] 1 S.C.R. 601, at p. 616; R. v. Conway, 1989 CanLII 66 (SCC), [1989] 1 S.C.R. 1659, at p. 1667.

[127] Abuse of process may be established where the proceedings:

1. are oppressive or vexatious; and

2. violate the fundamental principles of justice underlying the community's sense of fair play and decency.

See: R. v. Scott, 1990 CanLII 27 (SCC), [1990] 3 S.C.R. 979, at p. 1007 and CUPE, Local 79, at para. 35.

[128] In the present case, Windsor maintains that the action is an abuse of process for five primary reasons. They are as follows:

1. CTC has not pled the requisite elements to support a claim for contribution and indemnity in respect of the resident actions;

2. the claim is clearly unmeritorious as the facts do not, and cannot, support a claim of any contribution by the City to the damages suffered by the plaintiffs in the resident actions;

3. CTC has not pursued the remedies available to it in respect of the alleged improper and unlawful hindering of the demolishing of the buildings on the properties by the City;

4. CTC has already unsuccessfully challenged the by-laws in a prior court application; and

5. CTC is utilizing the justice system to advance allegations without any legal grounds, which is a clear waste of judicial, municipal and private resources thereby making a mockery of the judicial process.

Application of the principles of abuse of process to the facts of this case

[129] As to the allegation that CTC has not pled the requisite elements to support a claim for contribution and indemnity in respect of the resident actions, I reiterate that I find that the factual matrix pled by CTC addresses the requisite elements and that any shortcomings in those pleadings can be overcome by an amendment to them. I heard no meaningful reason to deny leave to amend to address those specific exceptions.

[130] As to Windsor’s position that the claim is clearly unmeritorious, for my reasons expressed both above and below, I find that Windsor has failed to demonstrate that proposition.

[131] As to Windsor’s position that CTC has not exhausted the remedies available to it, I make the following observations.

[132] Windsor cites the reasons of Gates J. in support of this proposition. Justice Gates noted that at no time had CTC ever taken advantage of its appeal rights to challenge the demolition by-law, the interim control by-law, or the City’s refusal to issue demolition permits. Justice Gates also concluded that, as a result, the position put forth by CTC in the Payne application amounted to a collateral attack on the by-laws. Windsor relies upon the principles enunciated in R. v. Consolidated Maybrun Mines Ltd., 1998 CanLII 820 (SCC), [1998] 1 S.C.R. 706.

[133] In that case, the core issue related to the prevention of contamination of the environment through the process provided in the Environmental Protection Act, R.S.O. 1990, c. E.19. The trial judge had purported to review the validity of an order made under that Act. The Supreme Court found that in these particular circumstances the court was without jurisdiction to determine the validity of the administrative order on a collateral basis because the appeal process provided for in that Act had not been pursued. In other words, that case involved the impact of the failure of the party under the order to avail itself of the appeal process.

[134] I find this case distinguishable from the principles in Consolidated Maybrun for two reasons.

[135] The first difference is that CTC maintains that Windsor attempted to enforce those by-laws as against a federal undertaking upon lands where they had no jurisdiction to do so. In other words, there is a significant jurisdictional issue in this case that was not present in Consolidated Maybrun. If CTC is successful in establishing that proposition at trial, I do not find it a stretch to conclude it may also be successful in establishing that it had no obligation to continue through an appeal process from a decision that was made without jurisdiction. Said another way, the jurisdiction of the appeal tribunal’s derives from the jurisdiction of the original decision and if Windsor did not have jurisdiction the appellate tribunal would similarly lack jurisdiction.

[136] Further, although Gates J. was clearly alive to the issue of the constitutional validity of the by-laws, he did not conduct an analysis regarding the application of those by-laws to lands within a federal undertaking in the sense proposed by CTC in this litigation. Rather, he simply observed at paragraph 2(c) of his judgment that “the city of Windsor recognizes that if it is determined that the “second span is found to be a federal undertaking, the by-laws cannot be applied to them as provided for in s. 14 of the Municipal Act, 2001.” Counsel for Windsor maintains that it has always acknowledged that if there is a conflict between the municipal by-laws and the federal legislation, the by-laws do not apply to the federal undertaking. I reiterate that the position of CTC significantly differs from that of Windsor. CTC maintains that Windsor was without jurisdiction regardless of the issue of conflict. Based upon the language chosen by Gates J. I conclude that he did not turn his mind to the issue raised by CTC and, as a result, this remains a live issue for trial.

[137] The second difference is that although I was not given any precise dates, it appears that by the time CTC was aware of potential liability from surrounding neighbours the respective appeal periods had already passed, so CTC could not have appealed even if they had a desire to do so at that point in time.

[138] As to Windsor’s position that CTC has already unsuccessfully challenged the by-laws in prior court proceedings, I refer to my comments directly below regarding the application of the principle of issue estoppel. Before getting to those comments I add the following additional thoughts.

[139] The first is that CTC maintains that Windsor is mischaracterizing its pleadings related to the by-laws. It is the position of CTC that they agree the issue of the validity of the by-laws has been decided by Gates J. and that his decision remains binding.

[140] The second is that by-law 147-2011 was not before Gates J. Accordingly, the validity of that by-law was not considered by him. That is important for two reasons: first, the issues before Gates J. and the issues in this action are not identical; second, the validity of that by-law has never been judicially determined.

[141] For the reasons above and below, I conclude that Windsor’s position that CTC is making a mockery of the judicial process is without merit.

c) Issue estoppel

Introduction

[142] Windsor maintains that the requirements of issue estoppel have been met because this claim is yet another attack on the validity and lawfulness of the by-laws that were held by Gates J. to be valid and enacted in good faith.

[143] There are two species of estoppel per rem judicatam which is today referred to as res judicata. The first is known as “cause of action estoppel” which precludes a person from bringing a second action against another person when the same cause of action has been determined in an earlier proceeding. The second species is known as issue estoppel: see R. v. Van Rassel, 1990 CanLII 124 (SCC), [1990] 1 S.C.R. 225, at p. 238; Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460. It is the latter which is at issue in this case.

[144] The requirements of issue estoppel are:

1. that the same question has been decided;

2. that the judicial decision which is said to create the estoppel was final; and,

3. that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.

See: Danyluk, at para. 25; R. v. Mahalingan, 2008 SCC 63 [2008] 3 S.C.R. 316, at paras. 52–56.

[145] In non-criminal proceedings, the court has a residual discretion to decline to apply issue estoppel based upon considerations of fairness: see R v. Thompson, 2014 ONCA 43, 118 O.R. (3d) 676, at paras. 82 & 83; Danyluk, at paras. 62–67. To be clear, the application of the residual discretion is very limited: see Thompson, at para. 82; and Danyluk, at para. 62.

[146] Unfairness potentially giving rise to the exercise of that discretion can occur in two ways. The first is unfairness in the first proceeding. The second is where even though the first proceeding was conducted with scrupulous fairness and in accordance with its purpose it would be unfair to use the result to preclude the subsequent proceeding. The two are not mutually exclusive: see Thompson, at para. 83.

[147] Relevant factors in that inquiry include the following:

i. the nature and extent of any differences between the purposes, processes or stakes involved in the two proceedings;

ii. the reasonable expectations of the parties in relation to the scope and effect of the prior proceeding as informed by the text and purpose of the enabling legislation;

iii. the risk of adding to the complexity and length of the estoppel-creating proceeding by attaching undue weight to its results through the application of issue estoppel;

iv. the availability of an appeal from the finding in the estoppel-creating proceeding; and

v. whether, in all the circumstances of the case, the application of issue estoppel would work an injustice.

See: Thompson, at para. 84; Danyluk, at paras. 74 & 80.

Application of the principles of issue estoppel to the facts of this case

[148] Although I find that the decision of Gates J. was final, I find the other two requirements of issue estoppel were not met.

[149] There was nothing before me to suggest that the parties in both proceedings were the same. In this action there are only two parties, CTC and Windsor. In the Payne application there were multiple parties. Although both CTC and Windsor were also involved in the Payne action, they were both named as respondents notwithstanding that their interests were clearly different.

[150] I also conclude that the same question has not been decided. I find that the Payne application and this action differed in seven material ways.

[151] The first is that in this action CTC is not seeking to attack the validity of the by-laws.

[152] The second is that the Payne application was brought by the neighbours and, accordingly, the focus of that hearing was in part the relationship between the neighbours, Windsor, and several of the by-laws, whereas the focus of this action is the relationship between CTC, Windsor, and the neighbours.

[153] The third is that the decision in the Payne application was released before much of the conduct underlying this action occurred. In other words, the fact situations are different.

[154] The fourth is that Gates J. did not effectively deal with the issue of jurisdiction. It appears from his reasons that that issue was not even before him. Had he done so his treatment of the failure of CTC to appeal certain decisions may not have been the same.

[155] The fifth relates to Windsor‘s reliance upon the provisions of s. 14(1) of the Municipal Act, 2001. I reiterate s. 14 provides that a by-law is without effect to the extent of any conflict with the federal Act or regulation made under such Act. However, s. 14(2) provides that there is a conflict between a by-law of a municipality and an Act if the by-law frustrates the purpose of the Act. There is nothing in the reasons of Gates J. to suggest that possibility of such a conflict was before him or considered by him. On the record before me I find it plausible that CTC may be able to demonstrate that the by-laws enacted by Windsor that prevented the demolition of the buildings located within its federal undertaking frustrated the purposes of the Special Act, thereby rendering s. 14(1) of the Municipal Act, 2001 inoperative in this fact situation.

[156] The sixth is that although most of the by-laws in question were before Gates J., not all were. As said above, by-law 147-2011 was not before Gates J. In other words, the by-laws at issue in this action are not the identical by-laws considered by Gates J.

[157] The seventh is that, as was observed by Gates J. at paras. 42–45 of his decision in Payne, that proceeding was commenced by way of application. Justice Gates concluded that the application process “especially in a matter of this breath and complexity places restrictions on the ability of the hearing judge to fully assess, weigh and consider the evidence.” As a result, he found that he was “left to consider the evidence through the lenses of innuendo, supposition, speculation and allegation in reaching a conclusion” and that as a result “a merits-based decision is thus made much more difficult.” Justice Gates cited Re Smuck v. City of St. Thomas, 1981 CanLII 2877 (ON SC), 1981 32 O.R. (2d) 698, at p. 700 (aff’d 1982 35 O.R. (2d) 160 (C.A.), leave to SCC refused, 1982 37 O.R. (2d) 565) in support of that proposition. This difference goes to the central issue of fairness.

[158] I find that several of those differences also go to the issue of fairness including the fourth, fifth, and seventh reasons.

[159] For the above reasons, I find that for the purposes of this motion the requirements of issue estoppel are not met on the record before me. Even if I am wrong, I would on the evidentiary record before me exercise my residual discretion to decline to apply issue estoppel on the basis of fairness for the reasons above.

[160] To be clear, these comments are not intended to be a final decision on the issue. I reiterate that no evidence is allowed on a motion to strike. It follows that fairness also requires that the ultimate determination as to the application of the doctrine of issue estoppel to this proceeding be left to the trial judge who will have a full evidentiary record before them.

4) Is there a reasonable cause of action based upon CTC’s claim for punitive damages related to the nuisance actions as against Windsor?

[161] Punitive damages may be awarded in situations where the defendant's misconduct is so malicious, oppressive and high-handed that it offends the court's sense of decency. Punitive damages bear no relation to what the plaintiff should receive by way of compensation. Their aim is not to compensate the plaintiff, but rather to punish the defendant. It is the means by which the jury or judge expresses its outrage at the egregious conduct of the defendant.” See Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130, at para. 196.

[162] I begin with the observation that there is no policy decision based blanket immunity from liability for nuisance that applies to municipalities as was suggested by counsel for Windsor: see Guinan, at para. 135. Promotion of the public good is not in itself a defence: see Guinan, at para. 158.

[163] In this case, Windsor also maintains that because punitive damages arise directly from the misconduct of the particular defendant against whom they are awarded, that the damages are personal to that defendant. Windsor argues that as a result there can be no joint and several responsibility for punitive damages. Windsor relies upon the decision in Hill v. Church of Scientology of Toronto, at para. 195.

[164] I disagree that paragraph 195 of that decision stands for a general proposition that there can never be joint and several responsibility for punitive damages. There are two reasons. The first is that para. 195 appears in the discussion of aggravated damages. The discussion of punitive damages does not begin until para. 196.

[165] The second is that the conclusions at para. 195 are based upon an express finding that the party against whom joint and several liability was sought was in no way responsible for the damages. That was the basis of the decision.

[166] To that I would add that the facts here are distinguishable from those in Hill in two fundamental ways.

[167] The first is that Windsor will not be a party to the proceedings in which the decision as to punitive damages is made. In other words, the court will be without jurisdiction to order contribution based upon the proportionate share of responsibility of each of CTC and Windsor for the offending conduct.

[168] The second is that in this action it would be open to CTC to propose that any offending conduct found in the nuisance actions worthy of punitive damages may have been directly or indirectly caused or impacted by the conduct of Windsor. It seems to me there are at least two possible scenarios in which it is plausible that CTC may be able to establish a case for contribution and indemnity for that nuisance.

[169] One is that CTC may be able to demonstrate that but for the conduct of Windsor it would not have engaged in the activity which gave rise to the punitive damages.

[170] The other is that CTC may be able to demonstrate that it was the interaction between CTC and Windsor, rather than an identifiable act or acts by either that caused the alleged urban blight. Said another way, the conduct of the two may be so inextricably intertwined that the conduct is incapable of separation. That possibility finds support in the observations of Carey J., where he states “like many real battles, this one would affect innocents, local residents caught in the figurative crossfire.”

[171] I find that a case for contribution and indemnity would be plausible in either of those scenarios and potentially others. I also find that the factual matrix pleaded at paragraph 58 of the amended statement of claim, if accepted by the trier of fact, supports both of those propositions.

5) Is there a reasonable cause of action for CTC’s claim for repayment of its legal fees incurred in the nuisance actions?

[172] CTC maintains that it has incurred approximately $3.5 million in legal fees and disbursements to date in defending the five nuisance actions. CTC seeks to recover damages in that regard.

[173] CTC maintains that but-for the actions of the City, no actions for the damages of the type alleged in the nuisance actions would have been brought. It also maintains that damages for those costs are recoverable from Windsor.

[174] Windsor’s factum states “there is no standalone cause of action for contribution and indemnity for legal costs incurred by a plaintiff in defending an action.” There was however no case law offered by Windsor in support of that proposition.

[175] To the contrary, there was case law offered by CTC to support the proposition that subject to remoteness, costs incurred in defending another action may be recoverable as damages: see Weinstein et al. v. A. E. LePage (Ontario) Ltd. et al., 1984 CanLII 1869 (ON CA), 47 O.R. (2d) 126, at pp. 128–129; Hammond & Co. v. Bussey (1887), 20 Q.B.D. 79; Granville Savings and Mortgage Corp. v. Slevin, 1993 CanLII 39 (SCC), [1993] 4 S.C.R. 279, at p. 281.

[176] One test of remoteness is the reasonableness of the defence of the first action: see Weinstein, at p. 130. I reiterate that in this case, CTC successfully defended the first of the nuisance cases to be tried. While I appreciate that decision is under appeal, if upheld, that decision tends to support the proposition that CTC’s defence in the first action was reasonable.

[177] Windsor also maintains that CTC has already been successful in the Desando action and as a result will be in a position to recover costs from the plaintiffs in that action.

[178] As said, Desando is under appeal and so any decision here based on the trial judge’s decision is premature.

[179] To that I would add that if it were presumed that CTC is ultimately successful in Desando and the other four nuisance actions, and presumed that CTC is successful in achieving a cost award against each of those plaintiffs, CTC may be entitled to indemnity for the difference between the amount collected under the costs awards and the amounts actually spent.

6) Costs

[180] Prior to hearing the motion I asked counsel to address the issue of costs.

[181] Counsel agreed that there were three primary issues to be addressed in the motion. They are whether it is “plain and obvious” that the plaintiff's statement of claim discloses no reasonable cause of action with respect to the claims for contribution and indemnity for each of nuisance, punitive damages, and costs. Counsel agreed that the successful party on each issue would be entitled to $5,000 in costs. For example, if the moving party was successful on two issues and the responding party successful on one issue, then the moving party would be entitled to the set off amount of $5,000. On the other hand, if the moving party was successful on all issues it would be entitled to $15,000.

[182] Counsel also agreed that if the moving party was successful on all issues that would dispose of litigation. As a result Windsor would also be entitled to their costs in the action. There was consensus those costs were also $5,000. In other words, if the moving party was successful on all issues they would be entitled to $20,000, and if the responding party was successful on all issues they would be entitled to $15,000.

[183] I found that consensus reasonable.

[184] In this case CTC was successful on all issues. It follows CTC is entitled to $15,000 in costs, all-inclusive.

C. ORDER

[185] For all of the above reasons, the order is to go as follows:

1. The defendant’s motion to strike the plaintiff’s pleadings is dismissed;

2. The plaintiff is granted leave to amend the statement of claim to more clearly reflect:

a) the requisite elements of misfeasance in public office, including particulars of the specific acts complained of; and

b) the requisite elements of negligence, including particulars of the specific acts complained of; and

3. Costs payable by the defendant/moving party to the plaintiff/responding party fixed at $15,000 all-inclusive, payable within 30 days.

Original signed by “Bondy J.”

Christopher M. Bondy

Justice

Released: June 19, 2018

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Canadian Transit Company

Plaintiff and Responding party

– and –

Corporation of the City of Windsor

Defendant and Moving party

REASONS FOR JUDGMENT

Bondy J.

Released: June 19, 2018