Court File and Parties

COURT FILE NO.: 16-1106-A1 DATE: 20181105 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Donna Nesbitt Plaintiff – and – Brian Jeffery Defendant – and – County of Simcoe and The Corporation of the Town of Midland Third Parties

Counsel: John Hammond for the Plaintiff J. Keenan Sprague for the Defendant Marie Sydney and Harold W. Sterling for the proposed Third Party, Her Majesty the Queen in Right of the Province of Ontario, Represented by the Minister of Transportation in the Province of Ontario

HEARD: October 5, 2018

Ruling on Motion to Add Third Party

Boswell J.

Overview

[1] A collision occurred between a number of vehicles at an intersection in Midland, Ontario in early January 2015. According to the plaintiff, the defendant ran a red light and collided with her. She, in turn, struck another vehicle and was seriously injured.

[2] Running a red light is often an indication of negligent driving. That is certainly one of the allegations here. But the defendant contends that there were other factors in play. In particular, he claims the road conditions were poor on the date of the accident and that those poor conditions caused or contributed to the collision. He issued a third party claim against the Town of Midland and the County of Simcoe, seeking contribution and indemnity for any amounts he may be found liable to pay to the plaintiff. He alleges that the third parties were negligent in discharging their road maintenance responsibilities.

[3] After the third party claim was commenced, the defendant was informed that the Ministry of Transportation had exclusive jurisdiction over the roadway he claims was negligently maintained. As a consequence, he wants to amend his third party claim to add Her Majesty the Queen in Right of the Province of Ontario, represented by the Minister of Transportation for the Province of Ontario (the “MTO”) as an additional third party.

[4] The MTO resists the motion arguing, amongst other things, that the court lacks the statutory authority to grant the relief requested.

[5] These reasons explain why the defendant’s motion succeeds.

Brief History of the Proceedings

[6] The incident giving rise to the claim occurred on January 5, 2015 at the intersection of King Street and Highway 12 in the Township of Midland. According to the defendant, he was unable, due to blowing snow, to clearly see the traffic lights. When he attempted to stop his vehicle, he was unable to do so due to icy road conditions. He went through the intersection and struck the plaintiff.

[7] The plaintiff issued her claim on August 3, 2016. The defence was delivered on or about December 8, 2016. With the consent of the plaintiff, a third party claim was issued against the Township of Midland and the County of Simcoe on October 12, 2017.

[8] On October 24, 2017, the insurance adjusters for the County advised the defendant’s counsel that the MTO had sole responsibility for the maintenance of the intersection in issue.

[9] In February 2018, defence counsel sought the consent of all other parties to add the MTO as a third party. All parties consented. Counsel then sought the consent of the MTO. On April 20, 2018, the MTO advised that they would not consent to being added as a third party to this litigation.

[10] On May 31, 2018 the defendant initiated this motion for leave to add the MTO as a third party. The motion was initially returnable June 26, 2018. On June 25, 2018, the defendant initiated a separate action for contribution and indemnity against the MTO in court file no. 18-991.

[11] The motion was subsequently adjourned to a long motions date on October 5, 2018.

The Parties’ Positions on the Motion

The Defendant

[12] Mr. Jeffery considers this to be a straightforward motion to add a prospective joint tortfeasor to the action. That the alleged tortfeasor happens to be the Crown is no impediment, in Mr. Jeffery’s submissions. He argues that the provisions of the Proceedings Against the Crown Act, R.S.O. 1990, c. P.27 (“PACA”) and the Public Transportation and Highway Improvement Act, R.S.O. 1990, c. P.50 (“PTHIA”), read harmoniously, permit actions against the Crown for damages and/or for contribution and indemnity in tort actions.

[13] Mr. Jeffery asserts that there are at least three Rules of Civil Procedure that aid him in his bid to add the MTO as a third party. In particular:

(a) Subrule 29.02(1.2) provides that a third party claim may be issued at any time with the plaintiff’s consent or with leave, which the court shall grant unless the plaintiff would be prejudiced thereby;

(b) Rule 26.02 provides that a party may amend a pleading to add a party provided that all parties – including the party to be added – consent, or otherwise with leave of the court; and,

(c) Rule 5.04 provides that the court may add a party at any stage of the proceedings on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

[14] Mr. Jeffery submits that leave should be granted in this instance given the absence of any real prejudice to the MTO. The action is at an early stage. Discoveries have not yet been held. The MTO will be in the same boat, so to speak, as every other party to the proceedings.

The Crown

[15] The MTO advances a multi-pronged attack on the defendant’s motion. Their argument includes the following features:

(a) The defendant has recently commenced a stand-alone action against the MTO for contribution and indemnity in relation to this same incident. Permitting the addition of the MTO as a third party in this proceeding would permit, if not encourage, a multiplicity of proceedings, which is undesirable for a number of reasons;

(b) At common law, the Crown is immune from being sued. Historically, actions against the Crown have been permitted only upon the acquisition of a special fiat. The common law requirement of a fiat continues to this day. That said, the Crown may be sued where a statute expressly permits it;

(c) PACA is an example of a statute that permits proceedings to be brought against the Crown without a special fiat. But PACA is expressly subject to the PTHIA (see PACA s. 2). Section 33 of the PTHIA does not permit claims to be brought against the Crown for contribution and indemnity. It permits only claims for damages. The defendant’s claim is in the nature of contribution and indemnity and is not authorized by s. 33;

(d) The Negligence Act, R.S.O. 1990, c. N.1, permits and facilitates actions for contribution and indemnity, but it does not apply to the Crown;

(e) Even if the PTHIA could be interpreted broadly enough to permit actions for contribution and indemnity, s. 33(4) of that Act requires a claimant to provide notice of its claim within ten days of the date of loss. No such notice was provided in this case;

(f) A claimant may avoid the effect of s. 33(4) if it can demonstrate both that there is a reasonable excuse for the failure to provide notice and that the Crown has not been prejudiced by the lack of notice. Neither one of those preconditions has been met by the defendant in this instance; and,

(g) The defendant appears to have been travelling at 70 km/hr in a 60 zone when he went through a red light and struck the plaintiff. He cannot complain about poor road conditions when he was driving so negligently. The principle of judicial economy mandates that this case be stopped in its tracks and the motion dismissed.

Analysis

The Issues

[16] Having considered the circumstances of the case and the arguments of the parties, I have identified the following issues for determination on this motion:

I. Should this motion be dismissed on the basis that the defendant’s success would result in a multiplicity of proceedings?

II. Is the Crown subject to being added as a third party in a tort action where a defendant seeks contribution and indemnity against the Crown based on an allegation of negligent road maintenance?

III. If the answer to II is “yes”, is the defendant precluded from adding the MTO in this instance due to the lack of notice under s. 33(4) of the PTHIA?

IV. If the answer to III is “no”, what Rule of Civil Procedure governs the motion?

V. Should the motion be dismissed on the basis of the merits of the action and/or third party claim?

[17] I will address these issues in turn.

I. The Multiplicity of Proceedings Problem

[18] The statement of claim was issued on August 3, 2016. I am not clear about when it was served, but obviously it was after the date it was issued. Mr. Jeffery’s counsel expressed the view that the two year limitation to sue the MTO began to run on the date of service of the claim. His view was that the limitation period would have expired prior to the hearing of this motion on October 5, 2018. He thought it prudent, in the circumstances, to issue a claim against the MTO prior to the hearing of the motion, even though there is case law to support the proposition that the significant date, for limitations purposes, is the date the motion to add the additional party was initiated: see Computer Enhancement Corp., v. J.C. Options (2013), 2013 ONSC 4548, 116 O.R. (3d) 714.

[19] There is no doubt that a multiplicity of proceedings is to be avoided. Increased costs, judicial economy and the risk of inconsistent results are just some of the reasons why. In this instance, however, I am not prepared to dispose of the motion on this ground. There are three reasons for this:

(a) The defendant’s counsel has satisfied me that he issued the stand-alone claim against the MTO out of an abundance of caution and he has undertaken to discontinue it should he be successful on this motion;

(b) If I were to dismiss this motion to avoid a multiplicity of proceedings, it would still not resolve the main issues between the parties. Those issues – including whether the claim for contribution and indemnity against the Crown is legally permitted – will still have to be litigated in the other action. The parties were here and fully argued those issues. It makes sense to me that I address them head-on; and,

(c) If the defendant has a legally viable claim against the MTO for contribution and indemnity, it is best dealt with in this proceeding so that all alleged tortfeasors are at the same table, so to speak.

II. Actions Against the Crown

[20] At the heart of this motion is the MTO’s argument that the defendant lacks a legal basis to assert his proposed third party claim against the Crown.

[21] Historically, and in particular prior to 1963, the Crown was generally immune from being sued. Only when a petition of right was granted to a claimant by special fiat of the Lieutenant Governor could an action against the Crown be instituted: see S.M. v. Ontario, 2003 ONCA 22812, [2003] O.J. No. 3236 (C.A.) at para. 55. The common law continues to reflect this immunity, but of course the Crown may sue or be sued where a statute specifically provides as much.

[22] The first iteration of PACA arrived in 1963. It provided broadly for the right to sue the Crown without a special fiat.

[23] The current iteration of PACA continues that broad right of action. It includes the following relevant sections:

Acts not affected

2 (1) This Act does not affect and is subject to the Expropriations Act, the Public Transportation and Highway Improvement Act, the Land Titles Act and the Registry Act, as to claims against The Land Titles Assurance Fund, the Motor Vehicle Accident Claims Act, Parts V.1 (Debt Retirement Charge) and VI (Special Payments) of the Electricity Act, 1998, the Workplace Safety and Insurance Act, 1997 and every statute that imposes a tax payable to the Crown or the Minister of Finance.

Right to sue Crown without fiat

3 A claim against the Crown that, if this Act had not been passed, might be enforced by petition of right, subject to the grant of a fiat by the Lieutenant Governor, may be enforced as of right by a proceeding against the Crown in accordance with this Act without the grant of a fiat by the Lieutenant Governor.

Liability in tort

5 (1) Except as otherwise provided in this Act, and despite section 71 of the Legislation Act, 2006, the Crown is subject to all liabilities in tort to which, if it were a person of full age and capacity, it would be subject,

(a) in respect of a tort committed by any of its servants or agents;

(b) in respect of a breach of the duties that one owes to one’s servants or agents by reason of being their employer;

(c) in respect of any breach of the duties attaching to the ownership, occupation, possession or control of property; and

(d) under any statute, or under any regulation or by-law made or passed under the authority of any statute.

Application of law as to indemnity and contribution

6 The law relating to indemnity and contribution is enforceable by and against the Crown in respect of any liability to which it is subject, as if the Crown were a person of full age and capacity.

[24] PACA, in one iteration or another, has been in place now for 55 years. The Court of Appeal has described the statutory right to sue the Crown as “an accepted part of our legal landscape”: Mattick Estate v. Ontario (Minister of Health) (2001), 2001 ONCA 24086, 52 O.R. (3d) 221, at para. 14. Any justification for narrowly or strictly construing the provisions of PACA, or any other statute that authorizes actions against the Crown, have long faded away.

[25] In my view, a plain ready of PACA would support the right of a party, including Mr. Jeffery, to sue the Crown as though the Crown were any other ordinary party. There is nothing in PACA that limits the mechanism for the claim against the Crown to be advanced. In other words, the Act does not suggest that the Crown cannot be added to a claim by way of a third party action.

[26] In this instance, Mr. Jeffery’s action is brought under s. 33 of the PTHIA. That section provides that the MTO is to maintain and keep in repair “the King’s Highway”. The Crown is liable for the damages sustained by any person by reason of the Crown’s default in its maintenance and repair obligations. The section is a long and detailed one. Its relevant provisions are as follows:

Ministry to maintain and repair

33 (1) The King’s Highway shall be maintained and kept in repair by the Ministry and any municipality in which any part of the King’s Highway is situate is relieved from any liability therefor…

Liability for damage in case of default

(2) In case of default by the Ministry to keep the King’s Highway in repair, the Crown is liable for all damage sustained by any person by reason of the default, and the amount recoverable by a person by reason of the default may be agreed upon with the Minister before or after the commencement of an action for the recovery of damages.

Notice claim

(4) No action shall be brought for the recovery of the damages mentioned in subsection (2) unless notice in writing of the claim and of the injury complained of, including the date, time and location of the happening of the injury, has been served upon or sent by registered letter to the Minister within ten days after the happening of the injury, but the failure to give or the insufficiency of the notice is not a bar to the action if a judge finds that there is reasonable excuse for the want or insufficiency of the notice and that the Crown is not thereby prejudiced in its defence.

Counterclaims and third party proceedings

(8) Despite any general or special Act, in an action against the Crown under this section, the defendant may set up by way of counterclaim any right or claim, whether the right or claim sounds in damages or not, and may claim contribution or indemnity from or any other relief over against any person not a party to the action, and every such counterclaim and claim may be instituted and carried on and judgment may be given as if such counterclaim or claim was made by a subject of Her Majesty against another subject.

[27] The position of the MTO is that the broad provisions of PACA do not apply to the defendant’s proposed third party claim. The MTO says that s. 2 of PACA specifically provides that its terms do not apply to actions commenced under the PTHIA. Accordingly, actions commenced under the PTHIA are governed by the complete mini-code established by s. 33 of that Act. In other words, the provisions of the PTHIA cannot be supplemented by the provisions of PACA. They rely upon, as support for this submission, a number of cases including, most recently, Cristante v. Grubb, 2016 ONSC 5029, in particular paras. 18-20.

[28] The MTO submits that the defendant’s third party action is not viable under s. 33 for a combination of reasons which include:

(a) Subsection 33(2) exposes the MTO to actions for damages. The defendant’s action is not for damages, but rather contribution and indemnity. Claims for contribution and indemnity are equitable claims based on principles of restitution. They are qualitatively different than damage claims;

(b) Subsection 33(4) requires that the claimant provide the MTO with notice of the circumstances of the claim within ten days of the incident giving rise to it. That section was not complied with and the defendant’s claim is therefore precluded.

[29] I am not persuaded by these submissions.

[30] First, the suggestion that the PTHIA contemplates and permits actions for damages, but does not allow claims for an apportionment of damages against the Crown as a joint tortfeasor, makes no sense to me. It is an unjustifiably narrow reading of the provisions of the PTHIA in my view.

[31] Moreover, subsection 33(8) specifically provides that the Crown, as a defendant, may institute a third party claim seeking contribution and indemnity against any person not otherwise a party to the action. The MTO is essentially asking that the court find that the PTHIA permits the Crown to claim contribution and indemnity through a counterclaim, crossclaim or third party claim, but for some reason it prevents any other party from doing the same. I do not accept the MTO’s argument.

[32] I need not address the question of whether the provisions of the PTHIA oust any application of PACA because I find that the third party claim against the MTO is available through s. 33 of the PTHIA. Having said that, to the extent that the two Acts are not inconsistent, it seems to me that they may act in harmony. In my view, any finding to the contrary is inconsistent with the purpose and intent of PACA and inconsistent with the comments expressed by the Court of Appeal in Mattick Estate, as above.

III. The Notice Issue

[33] Subsection 33(4) of the PTHIA provides that no action may be commenced against the MTO unless written notice has been provided within ten days of the date of loss. Such notice undoubtedly is intended to enable the MTO to investigate the claim and the conditions complained of while those conditions are still likely to be extant, or at least not a distant memory.

[34] Mr. Jeffrey contends that the notice provision applies only to plaintiffs. His counsel says it makes little sense to apply the provision to a defendant because a defendant does not know that an action is going to be commenced until he or she is given some form of notice to that effect.

[35] I do not accept that s. 33(4) should be interpreted so narrowly. Presumably any involved party to a motor vehicle collision will have a good sense, right away, whether road conditions were a factor in the collision and whether the MTO ought, therefore, to be put on notice about the prospect that they will be included in any future litigation. The fact is, the parties to the collision are, due to their involvement in it, on notice of the incident, of the particulars of the incident and of the road and weather conditions at the time of the collision. The MTO is not on notice unless and until someone tells them about the incident. The ten day notice provision tends to put the MTO on level footing with other parties to any potential litigation over the incident.

[36] At the time of the collision the involved parties were not immediately sorted into plaintiffs and defendants. If Mr. Jeffery was involved in a collision and if he was of the view that a material contributor to the collision was the condition of the highway, then he would be aware that he had a potential claim, or claim over, against the MTO. In my view, the notice requirement applies to him.

[37] The next question is whether Mr. Jeffery can demonstrate that he had a reasonable excuse for not providing notice within the time provided for and that the Crown is not prejudiced in its defence by his lack of notice.

[38] The excuse offered by Mr. Jeffery is two-pronged. First, he says he did not provide notice of his claim because he did not know he had a claim until he was actually sued by the plaintiff. Second, he says he initially thought the roadway was maintained by the Township of Midland or the County of Simcoe. He effectively gave notice of his claim against the MTO after he came to learn that the MTO was responsible for maintaining the highway where the collision occurred.

[39] In considering the reasonableness of Mr. Jeffery’s proffered excuse, I must start with the proposition that the phrase “reasonable excuse” is to be given a broad and liberal interpretation: see Crinson v. Toronto, 2010 ONCA 44 at para. 20. This is because the MTO has the additional protection of the requirement that the defendant demonstrate that the MTO has not been prejudiced by the lack of notice.

[40] The circumstances a court may wish to consider, when assessing reasonableness, include whether the party had the capacity to form the intention to sue the MTO during the notice period; the length of the delay; and the explanation(s) offered. Lack of awareness of the notice requirement, on its own, is not a reasonable excuse but it may be considered as part of the constellation of prevailing circumstances. See Azzeh (Litigation Guardian of) v. Legendre, 2017 ONCA 385.

[41] Mr. Jeffery’s explanation for not giving notice to the MTO boils down to this: he did not think, as a defendant, that he was obliged to give such notice. I think it clear that he (meaning his counsel) continued to be of that view even after he became aware of a potential claim for contribution and indemnity against the MTO in October 2017. He did not promptly give notice to the MTO when he became aware of that potential claim. In fact his “notice” to the MTO ultimately consists of his request for their consent to be added as a third party, given at least four months after he became aware that the MTO had the obligation to maintain the intersection where the accident occurred.

[42] I am somewhat sympathetic to Mr. Jeffery. To my knowledge no case to date has tackled the issue of who, amongst the parties to a motor vehicle accident, has the obligation to give notice of a potential claim to the MTO. His is not a great excuse, but it’s not an unreasonable one either.

[43] At the same time, I am of the view that the two factors referenced in s. 33(4) must be considered together and not in isolation. In my view, the primary driver of these two factors is the issue of prejudice. And “reasonableness”, in the context of the excuse for non-compliance, is relative to the issue of prejudice. In other words, if the absence or insufficiency of notice causes no prejudice to the MTO, then the threshold for “reasonableness” will in turn be low. But as prejudice increases, one would expect that the excuse for non-compliance must in turn become that much more compelling.

[44] In this instance, I am satisfied that the MTO will suffer very little prejudice as a result of the absence of notice under s. 33(4).

[45] The MTO raised the following factors as prejudicial:

(a) The inability to obtain data from the crash data recorder of the defendant’s vehicle;

(b) The MTO does not know if any photos or witness statements were taken at the time of the collision. Even if photographs were taken, some of them might not have been preserved, given that people switch phones and computers where photos are stored; and,

(c) There may have been some surveillance video from a local Ford dealership that will no longer be available.

[46] All of the factors raised by the MTO are entirely speculative.

[47] First, there is no evidence before me that the defendant’s vehicle was equipped with a crash data recorder. In any event, the defendant’s vehicle was apparently destroyed. Moreover, the accident report records the defendant travelling at 70 km/hr at the time of the collision. Presumably that information came from the defendant and is admissible against him under the admissions exception to the hearsay rule.

[48] Second, there is no evidence that any photographs ever existed, nor any evidence that photographs have been lost.

[49] Finally, the surveillance camera referenced by the MTO was located at the rear of the Ford dealership. The best that can be said is that it may have captured some part of the intersection where the collision occurred. Then again, it may not have. Apparently no one has actually checked any footage from the camera to find out.

[50] At the same time, there will undoubtedly be readily available reports regarding weather conditions on the date in issue. I take judicial notice of the fact that the MTO has in place road maintenance crews and snow plows to maintain the highways under their jurisdiction. Counsel to the MTO gave no indication that any of their maintenance and plow records have been lost or destroyed.

[51] I conclude that there will be little, if any, prejudice to the MTO as a result of any failure on the part of the defendant to comply with the notice provisions of s. 33(4) of the PTHIA. The excuse provided by the defendant for non-compliance is sufficiently reasonable, in the circumstances, in my view, to relieve the defendant from any consequence for that non-compliance.

IV. The Applicable Rule(s)

[52] Earlier I listed the Rules of Civil Procedure that the defendant submitted were applicable to this motion.

[53] In my view, the amendment of a pleading to add a party is governed by a combination of Rules 5.04 and 26.02. In this instance, the proposed third party did not consent to be added. Accordingly, the amendment can only be made with leave of the court.

[54] In considering whether to grant leave, the court must consider those factors referred to in Rule 5.04. In particular, whether prejudice would result from the amendment that could not be compensated for by costs or an adjournment.

[55] Given my earlier findings on the issue of prejudice, I am satisfied that granting the requested amendment to add the MTO will not result in non-compensable prejudice.

V. Dismissal on the Merits

[56] Counsel to the MTO argued that the defendant’s claim for contribution and indemnity, even if legally viable, is so obviously weak that it should, for reasons of judicial economy, not be permitted to proceed.

[57] This argument is easily disposed of. This is not a motion for summary judgment, where the merits of the action would be carefully considered. I lack a sufficiently detailed evidentiary record to draw any conclusions about the merits of the proceeding one way or the other.

Conclusion

[58] In conclusion, I find that the PTHIA does permit the Crown to be added as a third party in a negligence action where the claim against the Crown is for contribution and indemnity.

[59] I further find that the defendant had an obligation to give notice of the subject collision to the MTO under s. 33(4) of the PTHIA. He has, however, offered a reasonable excuse for his failure to do so and the MTO will not suffer prejudice as a result of the lack of notice.

[60] In the result, the defendant’s motion is granted.

[61] If the parties cannot agree on the issue of costs, they may make written submissions, not to exceed two pages in length (not including cost outlines) on a 14 day turnaround. The defendant’s submissions are to be served and filed by November 19, 2018 and the MTO’s by December 3, 2018. Any reply is to be delivered by December 10, 2018. All submissions are to be filed electronically with my assistant at Bev.taylor@ontario.ca.

Boswell J.

Released: November 5, 2018