COURT FILE NO.: CV-13-474487 DATE: 2018 0730

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

City of Hamilton Plaintiff – and – Daimler Trucks North America LLC and Wajax Industries Limited Defendants

COUNSEL: Rolf M. Piehler, for the Plaintiff, City of Hamilton Matthew Di Giovanni, for the Defendant Daimler Trucks North America LLC Mike Cremasco, for the Defendant Wajax Industries Limited

HEARD: April 19, 2018

Nishikawa J.

Overview

[1] The Plaintiff, the City of Hamilton, commenced this action against the Defendants, Daimler Trucks North America LLC and Wajax Industries Limited, for damages arising from a fire to a truck.

[2] The Defendants each bring a motion for summary judgment dismissing Hamilton’s claim against them on the basis that the proceeding was commenced after the expiry of the two-year limitation period and is thus statute-barred.

[3] For the reasons that follow, I grant the Defendants’ motions for summary judgment dismissing the Plaintiff’s claim.

Factual Background

The Parties

[4] The City of Hamilton (“Hamilton”) commenced this proceeding on February 19, 2013 seeking damages in the amount of $150,000 for the loss, due to fire, of a 2008 Freightliner M2-106 truck (the “Truck”) that occurred on September 22, 2010.

[5] The Defendant, Daimler Trucks North America LLC (“Daimler”), carrying on business as Freightliner Trucks, manufactured certain parts of the Truck.

[6] The Defendant, Wajax Industries Limited (“Wajax”), is an industrial product supplier and service provider. As part of its business, Wajax supplies industrial vehicles. Wajax sources various parts of vehicles from other manufacturers, assembles them together and delivers a final product to the customer. Wajax assembled the Truck and supplied it to Hamilton.

Purchase of the Truck

[7] On February 15, 2007, Wajax submitted a form of tender to Hamilton for the supply and delivery of a “forestry non-overcentre aerial truck.” The form of tender included the names of the companies supplying certain parts of the Truck.

[8] On April 23, 2007, Hamilton submitted a purchase order to Wajax in accordance with the form of tender. The purchase order was for a 2008 Freightliner M2-106 Chassis complete with Terex model Xt55 Aerial and 12-foot enclosed “chipper body.”

[9] Wajax assembled the Truck with the necessary components and delivered it to Hamilton on or about January 31, 2008.

[10] From the date of delivery until the date of the fire, Wajax was responsible for servicing the aerial and chipper components of the Truck. Wajax performed maintenance on various dates from 2008 to 2010. Wajax had serviced the Truck on or about September 21, 2010.

The Fire

[11] On September 22, 2010, a fire occurred in the Truck, resulting in a total loss of the vehicle.

[12] The fire department was called to extinguish the fire. At the time, the fire chief advised Dominic Lagana, a claims representative for Hamilton, that the Truck had sustained an engine fire.

[13] Later that day, Hamilton informed Wajax that the Truck had caught fire and that the “boom” was stuck in the upright position. At Hamilton’s request, Wajax attended at the scene of the fire to repair the damage to the hydraulic hose and to restore the boom to its resting position.

The Investigation

[14] On or about September 23, 2010, Mr. Lagana retained Brian James of Origin and Cause Incorporated (OCI) to conduct an investigation into the cause of the fire.

[15] On September 27, 2010, Mr. James conducted a non-destructive examination of the Truck for the purpose of determining the cause of the fire. The examination of the Truck was halted on Mr. James’ recommendation. Further inspection would involve destructive examination, and Mr. James advised that it was standard practice for technical investigators examining items that could be involved in litigation to provide notice to the manufacturer before such further inspections take place.

[16] On this basis, on September 28, 2010, Mr. Lagana contacted Bill King, an employee with Wajax, to inform him of the loss and to provide him with an opportunity to inspect the Truck. Mr. Lagana also sent Mr. King post-loss photographs of the Truck by email.

[17] By letter dated October 26, 2010, Mr. Lagana wrote to Mr. King, confirming the telephone conversation of September 28, 2010. The letter stated:

As you are already aware the above vehicle caught on fire on the above captioned date. The fire appears to have originated from the engine compartment.

Our preliminary investigation reveals that your company may be liable for the damages sustained to our vehicle.

Therefore you may wish to report this matter to your Liability Insurers and have them contact the writer to discuss the same.

[18] A Wajax employee followed up with a phone call to Mr. Lagana. During that call, Mr. Lagana advised that destructive testing of the Truck would be taking place and he wanted to provide Wajax with an opportunity to retain an expert to participate in the inspection.

[19] On November 1, 2010, Mr. Lagana contacted Daimler to notify them that the fire had occurred. Mr. Lagana had previously notified Daimler’s dealer, Metro Freightliner, a few days after the fire.

[20] The destructive examination of the Truck took place on November 12, 2010. Mr. Lagana and Mr. James were present, along with Trevor Hambly of Daimler and Cal White, an expert retained by Metro Freightliner. Mr. Lagana confirmed on examination for discovery that he understood that Mr. James, Mr. Hambly, and Mr. White agreed that the fire had something to do with the wiring, and was the result of electrical activity within the engine compartment.

[21] Hamilton received the OCI investigation report from Mr. James (the “Investigation Report”) eleven months later, on October 12, 2011. The Investigation Report confirmed the following:

• The origin of the fire was located on the driver’s side section of the engine compartment.
• The cause of the fire was still under investigation but there was evidence of electrical activity in the area.
• In Mr. James’ opinion, the fire was “a failure of the original equipment wiring and/or fastening techniques, which would represent the ignition source of this loss” since there was no evidence of modifications to the original wiring within the area.

[22] Hamilton commenced this action on February 19, 2013.

Issues

[23] The sole issue on this motion for summary judgment is whether Hamilton’s claim is statute-barred.

Analysis

Principles Applicable to Summary Judgment

[24] Rule 20.04(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, states that a court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.

[25] The Supreme Court of Canada has held that “summary judgment must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims.” Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 5, 49. An issue should be resolved on a motion for summary judgment if the motion affords a process that (i) allows the judge to make the necessary findings of fact, (ii) allows the judge to apply the law to those facts, and (iii) is a proportionate, more expeditious and less expensive process to achieve a just result than going to trial: Hryniak, at para. 49.

[26] On a motion for summary judgment, the judge must first determine whether there is a genuine issue requiring a trial based only on the evidence before him or her, without using the fact-finding powers. If there appears to be a genuine issue requiring a trial, the judge should then determine if the need for a trial can be avoided by using the powers under rr. 20.04(2.1) and (2.2): Hryniak, at para. 66.

[27] The court is entitled to assume that the record contains all the evidence that the parties would present if the matter proceeded to trial: Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200, at paras 26-27, aff’d 2014 ONCA 878, leave to appeal to SCC refused, [2015] S.C.C.A. No. 97.

[28] As a preliminary matter, Hamilton objects to Daimler’s reliance upon the affidavit of litigation counsel on a motion for summary judgment. Counsel who swore the affidavit did not argue the motion.

[29] An affidavit from litigation counsel would not generally be appropriate on a motion for summary judgment, particularly where counsel deposes to material facts that may be in dispute. In this case, however, the affidavit is limited to non-contentious matters. It contains a chronology of events and attaches documents and transcript excerpts. Moreover, the sole issue on this motion is the commencement of the limitation period, and the facts material to this issue are not in dispute. Under the circumstances, the affidavit is proper: Ferreira v. Cardenas, 2014 ONSC 7119, at paras. 13-14.

The Limitations Act, 2002

[30] Section 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, states that a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered. There is no residual discretion for the courts to extend the limitation period: Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469, 90 O.R. (3d) 401, at para. 27.

[31] The discoverability of a claim is governed by s. 5 of the Limitations Act, which states:

(1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred, (ii) that the injury, loss of damage was caused by or contributed to by an act or omission, (iii) that the omission was that of the person against whom the claim is made, and (iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

[32] The limitation period begins to run from the date on which the Plaintiff had, or ought to have had, sufficient facts to have prima facie grounds to infer that the Defendants’ acts or omissions caused or contributed to the loss: Barry v. Pye, 2014 ONSC 1937, at para. 43.

[33] Pursuant to s. 5(2) of the Limitations Act, since the loss occurred on September 22, 2010, it is presumed that the cause of action was discoverable on that date. The burden of proof shifts to the Plaintiff to demonstrate that the cause of action was not discoverable until a later date: Slack v. Bednar, 2014 ONSC 3672, 120 O.R. (3d) 689, at para. 40. On a motion for summary judgment on the issue of discoverability, the responding party must adduce evidence of material facts showing a genuine issue to be tried regarding the commencement of the limitation period: Ferrara v. Lorenzetti, Wolfe Barristers and Solicitors, 2012 ONCA 851, 113 O.R. (3d) 401, at paras. 29-30.

[34] A cause of action arises when the material facts on which it is based have been discovered or ought to have been discovered by the plaintiff with the exercise of reasonable diligence: Lawless v. Anderson, 2011 ONCA 102, 276 O.A.C. 75, at para. 22, citing Aguonie v. Galion Solid Waste Material Inc. (1998), 38 O.R. (3d) 161 (C.A.), at p. 170. The inquiry is thus not solely about when the plaintiff discovered the material facts on which the cause of action is based, but when the plaintiff ought to have discovered the existence of a cause of action with the exercise of reasonable diligence.

When Did Hamilton Discover Its Claim?

[35] Hamilton submits that it did not know that it had a claim against Daimler and Wajax until it received the Investigation Report in October 2011, and that therefore, its claim is not statute-barred.

[36] The Defendants argue that there were at least three earlier times by which Hamilton had knowledge of its claim against them: (i) on September 22, 2010 when the fire occurred; (ii) September 27, 2010 when the non-destructive testing took place and (iii) by November 12, 2010 when the truck underwent destructive testing.

[37] Pursuant to s. 5(2) of the Limitations Act, Hamilton is presumed to have known that it had a cause of action against the Defendants on the day the act or omission on which the claim is based took place, unless the contrary is proved. On the date of the fire, Hamilton knew that the fire originated in the engine compartment and resulted in the loss of the Truck. Hamilton knew or ought to have known that it would have a claim against the manufacturers of the Truck, which included Daimler and Wajax. Hamilton argues that it needed to know the cause of the fire in order to exclude the possibility that Hamilton was responsible for the fire, since it had also serviced the Truck. Other than raising this possibility on this motion, there does not appear to be any evidence that Hamilton investigated or inquired into its own potential responsibility. Hamilton has not provided sufficient evidence to rebut the statutory presumption that the claim was discoverable at the time of the fire.

[38] In any event, it is not necessary to determine conclusively whether the Plaintiff knew or ought to have known that it had a claim against the Defendants at each point in time. Since Hamilton commenced this proceeding on February 19, 2013, it is sufficient to determine whether or not the claim was discoverable by reasonable diligence at any time before February 19, 2011. If so, then it is statute-barred.

[39] I find that at the very latest, when destructive testing took place on November 12, 2010, Hamilton knew or ought to have known that it had a claim against Daimler and Wajax. By that time, Hamilton was aware that the fire was caused by a fire in the engine of the Truck, and that this was likely due to an electrical issue. Hamilton did not need to know the precise cause of the fire in order to be in a position to commence a claim against the Defendants.

[40] Even before that, when non-destructive examination took place, the examination was halted after the initial non-destructive examination in order to provide an opportunity for Daimler and Wajax to participate. The letter sent to Wajax on October 26, 2010 specifically advised Wajax that it was potentially liable for the damage to the Truck, and that it might wish to notify its liability insurer, thus evincing Hamilton’s knowledge of a potential claim. Similarly, Hamilton notified Daimler in writing on November 1, 2010.

[41] I do not accept Hamilton’s argument that it needed to know the cause, and not simply the origin, of the fire and that this could only have been determined after receiving the Investigation Report. The law does not require that the Plaintiff be certain that the injury or damage was caused by the defendant’s negligence: Brown v. Wahl, 2015 ONCA 778, 128 O.R. (3d) 583, at para. 15. The question is whether the Plaintiff had sufficient facts to have prima facie grounds to infer that the acts or omissions were caused by the party or parties identified: Kowal v. Shyiak, 2012 ONCA 512, 296 O.A.C. 352, at para. 18. The plaintiff need not come to a legal conclusion as to the defendant’s liability, as this would be too high a bar to meet: Dale v. Frank, 2017 ONCA 32, 136 O.R. (3d) 315, at para. 7. Hamilton’s view that the limitation period did not begin to run until it received the Investigation Report suggests that it had to be certain of the Defendants’ liability before commencing a claim. The Investigation Report itself, however, is not conclusive and states that the cause of the fire “is still under investigation.”

[42] At the latest, as of November 12, 2010, Hamilton knew or ought to have known enough facts on which to base an allegation of negligence against the Defendants. Although Hamilton claims that it was not possible for a layperson to know of a potential claim against the Defendants without the Investigation Report, Mr. Laguna had 27 years’ experience investigating claims, including claims relating to fires. Mr. Lagana acknowledged on examination that he advised the Defendants of the fire and the testing because he thought Hamilton could have claims against them. As a result, the claim was discovered and the limitation period began to run: Lawless v. Anderson, 2011 ONCA 102, at para. 23.

[43] The circumstances of this case differ from the cases upon which Hamilton relies, where the limitations period was found not to have commenced until the delivery of an expert report. In those cases, the plaintiff had little more than a bare suspicion that there would be a cause of action for negligent design, and expert assessment was needed to determine whether there was a cause of action: Greenaway v. Ontario (Ministry of Transportation) (1999), 44 O.R. (3d) 296 (Gen. Div.), at para. 8; and Mark v. Guelph (City), 2010 ONSC 6034, 104 O.R. (3d) 471.

[44] This case also differs from those cases where the potential defendants are not known. Here, there were a limited number of potential defendants, and their identity was always known to Hamilton. Hamilton knew that it had purchased the Truck from Wajax, who continued to service it, and that the original vehicle was manufactured by Daimler. By November 12, 2010, the expert had received all of the documentation relating to servicing of the Truck, and had conducted the non-destructive and destructive testing. Hamilton did not need to know which defendant was responsible, or primarily responsible, in order to commence the proceeding. Indeed, Hamilton initially named another party, Terex Corporation, as a defendant but discontinued against them.

[45] As noted above, Hamilton’s argument that it needed to exclude its own responsibility for the fire does not assist. This appears to have been little more than a vague supposition, and the record contains no evidence that Hamilton considered or examined this any further. In this case, from November 12, 2010 at the latest, Hamilton had all the material facts to know that it had a cause of action against Daimler and Wajax. The fact that another party, including Hamilton, could have had some responsibility did not mean that there was not a discoverable claim against the known defendants.

Reasonable diligence

[46] A plaintiff is required to act with reasonable diligence to acquire the material facts upon which a negligence claim could be based: Soper (Guardian of) v. Southcott (1998), 39 O.R. (3d) 737 (C.A.). In determining whether a plaintiff has acted with reasonable diligence, the court must consider whether a reasonable person, exercising reasonable diligence under the circumstances, would have discovered the material facts upon which to form an action. The obligation on a plaintiff to exercise reasonable diligence is a positive one: Bolton Oak Inc. v. McColl-Frontenac Inc., 2011 ONSC 6567, at para. 12. In Soper v. Southcott, the Court of Appeal found that this includes acting with diligence in requesting and receiving medical reports, so as not to delay the commencement of the limitation period.

[47] The Investigation Report was not provided until over a year after the accident, or 11 months after the destructive testing took place. Mr. Lagana’s evidence is that he did not have any contact with Mr. James between November 12, 2010 and October 12, 2011, and that he did not follow up to request the Investigation Report. While Hamilton claims that OCI was attempting to locate a comparable Truck for inspection and electrical schematic drawings, the Investigation Report does not address whether those items were necessary in order to draw a conclusion.

[48] Hamilton did not exercise reasonable diligence in acquiring the material facts to support its claim and the claim was discoverable by November 12, 2010, at the latest, but in any event before February 19, 2011.

Conclusion

[49] Based on the issue in this case and the evidence before me, I find that this motion affords a process that allows the court to make the necessary findings of fact and apply the law to those facts. I also find that, as the parties have agreed, a summary judgment motion is a proportionate, more expeditious and less expensive process to achieve a just result than going to trial.

[50] There is no genuine issue requiring a trial as to the discoverability of the claim. Hamilton has failed to meet its burden to demonstrate that the claim was not discoverable on the date of the fire. Alternatively, by November 12, 2010, when destructive testing was conducted, Hamilton knew or ought to have known that it had a claim against the Defendants. In any event, the claim was discoverable before February 19, 2011, and is statute-barred. I therefore grant the Defendants’ motion for summary judgment dismissing Hamilton’s claim.

[51] The parties are encouraged to agree on the quantum of costs. If no agreement is reached, Defendants’ counsel shall make cost submissions within ten days of the release of this decision. Responding submissions on costs by Hamilton’s counsel shall be made within ten days of receiving the Defendants’ cost submissions. All cost submissions must be less than five pages in length. If no costs submissions are received within this time period, costs will be presumed to have been resolved by the parties.

Nishikawa J.

Released: July 30, 2018