Court File and Parties

COURT FILE NO.: C-214-15

DATE: 2018/07/09

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: TANIA IVIC, Plaintiff

AND:

VELIBOR BORO LAKOVIC, UNITED TAXI LIMITED a.k.a. United Taxi Transportation Service (K-W) Ltd. and DUSAN TOSIC, Defendants

BEFORE: D.A. Broad

COUNSEL: Monica Machado, for the Plaintiff J. Sebastian Winny, for the Defendant Dusan Tosic

HEARD: May 8, 2018

ENDORSEMENT

[1] By Statement of Claim issued March 2, 2015 the plaintiff brought an action against the defendants Velibor Boro Lakovic (“Lakovic”) and United Taxi Limited (“United Taxi”) for general damages, special damages, and punitive, aggravated and/or exemplary damages 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] 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.

[4] United Taxi 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.

[5] By Endorsement dated September 14, 2016 and reported at 2016 ONSC 5750 I granted summary judgment dismissing the plaintiff’s claim against United Taxi and granted leave to the plaintiff to amend her Statement of Claim to add Tosic as a defendant.

[6] In my Endorsement I stated:

“Whether the claims [of the plaintiff against Tosic] 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.”

[7] The plaintiff’s appeal from the dismissal of her action against United Taxi was dismissed by the Court of Appeal with reasons reported at 2017 ONCA 446. Leave to appeal the Court of Appeal’s decision was refused by the Supreme Court of Canada (see 2018 CarswellOnt 1628).

[8] Tosic has now brought a motion for summary judgment pursuant to R. 20.04(2) of the Rules of Civil Procedure on two grounds, first, that there is no genuine issue requiring a trial on the issue of his liability seeking dismissal of the action against him, and second, that Tosic is a contractual privy of United Taxi and the issue of his alleged vicarious liability for the alleged sexual assault committed by Lakovic is res judicata by virtue of the earlier decision granting summary judgment to dismiss the action against United Taxi.

[9] The plaintiff brought a cross-motion for an order granting leave to her to amend the Amended Statement of Claim to include an alternative theory of liability based upon breach of contract and implied warranty and to remove United Taxi Limited as a defendant from the action and from the title of proceeding. During submissions Ms. Machado withdrew the aspect of the motion to amend relating to the removal of United Taxi Limited as a named defendant.

Motion to amend Statement of Claim

[10] The specific allegation with respect to breach of contract and implied warranty in the proposed Fresh as Amended Statement of Claim reads as follows:

“The plaintiff states, and the fact is, that the Defendants breached the contract of services and implied warranty with the Plaintiff by not ensuring that the defendant Tosic’s taxicab would be reasonably safe for use by the Plaintiff including, inter alia, safety from sexual assault. The Plaintiff engaged in a contract for transportation services with the Defendants and had a reasonable expectation and implied warranty for safe carriage.”

[11] Rule 26.01 of the Rules of Civil Procedure provides that:

On motion at any stage of an 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.

[12] The Court of Appeal in Marks v. Ottawa (City), 2011 ONCA 248, [2011] O.J. No. 1445, at para. 19 stated that, although the general rule is that amendments are presumptively approved, there is no absolute right to amend pleadings as the court has a residual right to deny amendments where appropriate. The Court confirmed that the proper factors to be considered on a motion to amend pleadings are 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.

[13] There is no suggestion of prejudice which would be incapable of being compensated for and therefore the second and third factors are the relevant ones to be considered.

[14] There is no suggestion that the plaintiff and Tosic knew of each other’s existence and therefore arguably, there was no shared intention between them to enter into legal relations.

[15] More importantly, even if it might be argued that the plaintiff and Tosic were in a contractual relationship, the basis for implying a warranty into the contract that the plaintiff would be free from sexual assault is far from clear. The Canadian Encyclopedic Digest at Contracts X 1, para. 636 summarized the law with respect to the circumstances in which the court will imply a terms into a contract, as follows:

An implied term will fall into one or more of three established categories: (1) terms implied as necessary to give business efficacy to a contract, which are terms that the parties would obviously have assumed to be part of the contract (also known as terms implied in fact); (2) terms implied as a matter of custom or usage, which require evidence that the parties to the contract would have understood such a custom or usage to be applicable; and (3) terms implied as legal incidents of a particular class or kind of contract, the nature and content of which have to be largely determined by implication (also known as terms implied in law). Depending on the particular fact situation, there can be considerable overlap between the categories. The presumption of the law is against implying terms in a contract.

[16] In my view, the term proposed by the plaintiff to be implied into the contract does not fall within any of the categories set forth in this passage.

[17] Mr. Marchado for the plaintiff placed considerable reliance on the case of Fraser v. U-Need-A-Cab 1985 CanLII 2118 (ON CA), [1985] O.J. No. 2482. In that case the plaintiff called U-Need-A-Cab, a taxicab company which carried on its business partly with its own vehicles and partly by using independently owned cabs, to be transported from the hospital to her home. The cab which responded was independently owned. Because of a defect, the door would not open for the plaintiff. When she applied her weight to the door it flew open and she fell out onto her driveway suffering injury. The court held that, when U-Need-A-Cab accepted the plaintiff’s order, a contract was formed, by which it promised to send a cab and carry the plaintiff safely.

[18] It is noteworthy that the court found that the contract was formed between the plaintiff and U-Need-A-Cab, which occupied a position equivalent to United Taxi in the present case. It rejected the argument that the only contract was between the plaintiff and the independent cab owner. In any event, the plaintiff’s injuries in Fraser were caused by a defect in the vehicle itself. Although the court did not elaborate in its brief decision, an implied term that the cab would be free of dangerous defects would fall within one of the categories for the implication of contractual terms referred to above. In my view the Fraser case does not support the implication of a contractual term that a non-party to the contract (whether an employee or otherwise) would not commit an intentional tort, not connected with his employment duties, causing injury to the plaintiff.

[19] In my view, the plaintiff has failed to show that the proposed amendment constitutes an issue worthy of trial and is prima facie meritorious. If the allegation in the proposed amendment were originally pleaded, it would have been struck.

[20] The plaintiff’s motion to amend the Statement of Claim to plead breach of contract and breach of an implied warranty is therefore dismissed.

Motion for Summary Judgment

[21] In her factum the plaintiff took no issue with the statement of facts set forth in Tosic’s Factum, as follows:

(a) the plaintiff alleges that while she was intoxicated late in the evening of October 13, 2012, she was sexually assaulted by Lakovic, a taxi driver;

(b) at the time of the alleged assault Lakovic was operating the taxi under contract as the secondary driver for Tosic, who owned the vehicle and operated it within the fleet of the taxi brokerage operated by United Taxi;

(c) Lakovic was tried on a charge of sexual assault before Justice Reilly and a jury and a verdict of not guilty was delivered on April 8, 2014.

[22] In my Endorsement in respect of the motion for summary judgment of United Taxi I found that, although the plaintiff’s Statement of Claim pleaded three bases for liability, namely direct negligence, breach of fiduciary duty and vicarious liability, the plaintiff led no evidence with respect to the applicable standard of care in the circumstances nor with respect to any breach on the part of United Taxi of any such standard of care. Neither did the plaintiff lead any evidence supporting the existence of a fiduciary duty to her owed by United Taxi.

[23] In the present motion brought by Tosic, the plaintiff similarly led no evidence with respect to any applicable standard of care that would apply to Tosic, nor any breach on his part of any such standard of care and led no evidence supporting the existence of a fiduciary duty owed by him to the plaintiff. As was the case on the motion for summary judgment brought by United Taxi, and as argued on appeal in the Court of Appeal, the question of whether there is a genuine issue requiring a trial is restricted to the claim against Tosic based on vicarious liability, which the Court of Appeal characterized at para. 45 as “indirect, no-fault liability.”

[24] In its analysis of whether there was a genuine issue requiring a trial in respect of the claim based upon vicarious liability against United Taxi, the Court of Appeal applied the principles derived from Bazley v. Curry, 1999 CanLII 692 (SCC), [1999] 2 S.C.R. 534 and in particular the five factors set forth at para. 41 thereof, and made the following findings:

(1) with respect to the first factor relating to the opportunity United Taxi afforded the driver to abuse his power, Lakovic’s opportunity for misconduct was not as great as that of the child caregiver in Bazley but was more akin to the groundskeeper in Jacobi v. Griffiths, 1999 CanLII 693 (SCC), [1999] 2 S.C.R. 570 where vicarious liability was not imposed (see para. 33);

(2) with respect to the second and third factors, the alleged sexual assault did not further the taxi company’s aims in any respect and was not related to friction, confrontation or intimacy inherent in the employer’s aims (see para. 34);

(3) with respect to the fourth factor, United Taxi did not confer any power on the driver in relation to the plaintiff. It dispatched the driver to drive the plaintiff and there was no evidence that United Taxi knew that it was sending the driver to collect a lone, intoxicated woman. The relationship between the driver and the plaintiff was that of adult driver and adult fee-paying passenger (see. para. 35); and

(4) with respect to the final factor relating to the vulnerability of potential victims to the wrongful exercise of the employee’s powers, the power the driver allegedly wrongfully exercised was not predicated on his employment. Vulnerability does not itself provide the strong link between the enterprise and the sexual assault that imposition of no-fault liability would require (see para. 36).

[25] The plaintiff argued that three of the Bazley factors are present in the case at bar, on the following bases:

(a) factor one – Tosic, by permitting Lakovic to work night shifts, created the opportunity for him to abuse his power to be alone with the plaintiff at night with fewer people to witness the incident;

(b) factor four – Lakovic had significant power and control over the plaintiff because he is a man with arguably greater strength than the plaintiff, he was alone with the plaintiff at night in an isolated parking lot when was no one around to stop his actions and he had the ability to lock the doors of the taxi cab thereby prohibiting the plaintiff from leaving; and

(c) factor five - the plaintiff was vulnerable in that she was alone in the taxi cab and intoxicated to the point of being in and out of consciousness.

[26] The plaintiff did not, in her factum or in submissions, suggest any basis by which Tosic was in any different position relative to the plaintiff than United Taxi was with respect to the application of the Bazley principles. I find the analysis of Hoy, A.C.J.O., writing for the Court of Appeal in reference to the application of the Bazley factors, to be equally applicable to the claims against Tosic. As noted by Hoy, A.C.J.O., United Taxi, acknowledged, for the purpose of the argument of the summary judgment motion and of the appeal, that it was the employer of the driver Lakovic. The positions of United Taxi and Tosic in relation to Lakovic were therefore legally equivalent for the purpose of the analysis.

[27] Hoy, A.C.J.O., at para. 21, endorsed the applicability of the following caution stated at para. 36 by McLachlin, J. in Basley:

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. Where vicarious liability is not closely and materially related to a risk introduced or enhanced by the employer, it serves no deterrent purpose, and relegates the employer to the status of an involuntary insurer.

[28] At para. 22, Hoy, A.C.J.O. confirmed the principle expressed at para. 40 of Bazley that “a ‘but-for’ level of connection – that is, the mere providing of the bare opportunity for the employee to commit the wrong - is not a sufficient link.”

[29] Thus, the fact that Tosic permitted Lakovic to drive the taxicab on a night shift did not provide a sufficient link for the imposition of vicarious liability on Tosic.

[30] For the foregoing reasons I find that there is no genuine issue requiring a trial with respect to the plaintiff’s claim against Tosic. I am able to reach a fair and just determination of the claim against Tosic on the merits, as the process has allowed me to make the necessary findings of fact, to apply the law to the facts, and is a proportionate, more expeditious and less expensive means than a trial to achieve a just result (see Hryniak v. Mauldin, [2014] S.C.R 87 at para. 49). Moreover, it is not necessary in this case to use the new powers under sub rules 20.04(2.1) and (2.2).

Disposition

[31] The motion of the plaintiff to amend the Statement of Claim at add claims of breach of contract and breach of warranty is dismissed.

[32] The motion of the defendant Tosic for summary judgment dismissing the action as against him is allowed.

[33] The parties are encouraged to agree upon costs.

[34] If the parties are unable to agree upon costs the defendant Dusan Tosic may make written submissions as to costs within twenty-one (21) days of the release of this Endorsement.

[35] The plaintiff may have fourteen (14) days after receipt of the defendant Tosic’s submissions to respond.

[36] All such written submissions shall not exceed four (4) double-spaced pages, exclusive of Costs Outlines or Bills of Costs, Offers to Settle and Authorities, and 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 timeframe, the parties will be deemed to have settled the issue of costs as between themselves.

D.A. Broad

Date: July 9, 2018