Court File and Parties
COURT FILE NO.: CV 15-25-A1
DATE: March 24, 2021
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: George Taylor, Plaintiff
AND:
Sean Mayes and Diana Story, Defendants
AND:
Her Majesty the Queen, in Right of the Province of Ontario, Represented by the Ministry of Transportation of Ontario, Third Party
BEFORE: Muszynski J.
COUNSEL: C. Dorey, for the Plaintiff S. Baldwin, for the Defendants A. Choi, for the Third Party R. Moss, for the Proposed Third Party
HEARD: February 11, 2021
Decision on motion to add third party
[1] This action arises out of a motor vehicle accident that occurred on Highway 401 on February 27, 2013 when the plaintiff, George Taylor, was struck by a vehicle owned and operated by the defendants, Sean Mayes and Diane Story.
[2] Following receipt of the statement of claim, the defendants initiated a third party claim against Her Majesty the Queen in Right of the Province of Ontario, represented by the Ministry of Transportation of Ontario (“HMQ”) alleging that the accident occurred due to the poor road conditions on Highway 401, which HMQ was responsible for maintaining.
[3] The defendants now bring this motion seeking leave to amend the third party claim to add Cruickshank Construction Limited (“Cruickshank”), as an additional third party. Cruickshank was the independent contractor hired by HMQ to perform winter maintenance on Highway 401 at the location of the accident at the material time.
[4] HMQ and the proposed third party, Cruickshank, oppose this motion on the basis that the claim against Cruickshank is statute barred by virtue of the Limitations Act 2002, SO 2002, c 24, Sch B.
ISSUE
[5] Should the defendants be granted leave to amend the third party claim to add Cruikshank as a third party?
RESULT
[6] The defendants are granted leave to amend the third party claim to add Cruickshank as a third party as set out in the proposed amended third party claim contained in the defendants’ motion record. The defendants’ third party claim against Cruickshank is not statute barred by virtue of the Limitations Act.
POSITION OF THE PARTIES
[7] The defendants submit that the claim against Cruickshank is not statute barred because they only discovered that HMQ hired an independent contractor on November 19, 2019 when HMQ’s representative was finally examined for discovery. The defendants state that the delay in proceeding to discoveries was caused by HMQ’s refusal to comply with the relevant rules of procedure.
[8] HMQ and Cruickshank take the position that the defendants failed to exercise due diligence and that they “ought to have known” that Cruickshank was the contractor well before the expiry of the limitation period. It is on this basis that HMQ and Cruickshank submit that the amendment should not be allowed.
BACKGROUND FACTS
[9] The motor vehicle accident occurred on February 27, 2013 when the defendants’ vehicle struck the plaintiff. The plaintiff was an on duty OPP officer at the material time and was conducting a traffic stop on the side of Highway 401.
[10] The plaintiff’s statement of claim was served on the defendants on or about May 12, 2015 wherein the plaintiff alleges that the defendants were responsible for the accident and seek damages arising from the plaintiff’s alleged injuries.
[11] The defendants served their statement of defence on or about November 7, 2016.
[12] On November 10, 2016, the defendants issued a third party claim against HMQ for contribution and indemnity.
[13] HMQ served its defence to the third party claim on or about January 6, 2017.
[14] Examinations for discovery of the plaintiff and the defendants were completed on May 28, 2018. Counsel for HMQ participated in the examinations, but HMQ refused to produce a representative for examinations for discovery.
[15] The defendants brought a motion to compel HMQ to produce a representative for examinations for discovery and to produce a list of documents. The motion was heard on July 26, 2019 before Justice Ryan Bell.
[16] Justice Ryan Bell released her decision on the motion on October 1, 2019 wherein HMQ was ordered to produce a representative for examinations for discovery and to produce a list of documents together with schedule “A” productions.
[17] HMQ provided a list of documents, and schedule “A” productions, to the defendants on October 25, 2019.
[18] Examination for discovery of the HMQ representative was completed on November 19, 2019. There were various undertakings and refusals arising out of HMQ’s discovery.
[19] The HMQ’s undertakings were partially fulfilled on March 9, 2020, but the defendants continued to make requests for further and/or complete answers by way of letters dated April 27, 2020, May 26, 2020, June 29, 2020, July 7, 2020 and August 12, 2020.
[20] The defendants brought an undertaking and refusals motion which was heard on January 6, 2021 before Justice Tranmer.
[21] The decision of Justice Tranmer was released on January 14, 2021 where he ordered HMQ to produce relevant documentation, including parts of the contract between HMQ and Cruickshank.
[22] This motion brought by the defendants to add Cruickshank as a third party was heard on February 11, 2021.
ANALYSIS
Relevant Statutory / Regulatory Provisions
[23] Rule 5.04(2) of the Rules of Civil Procedure states:
At any stage of proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[24] Rule 5.04(2) must be read in concert with s. 21 of the Limitations Act which states:
21(1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.
[25] The two-year limitation period and principle of discoverability is codified in ss. 4 and 5 of the Limitations Act:
- Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
5.(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 or damage was caused by or contributed to by an act or omission,
(iii) That the act or omission was that of the person against whom the claim is made, and
(iv) That, in 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).
[26] Section 18 of the Limitations Act sets out the application to third party claims for contribution and indemnity:
18(1) For the purposes of subsection 5(2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer’s claim is based took place.
When was the claim against Cruickshank discoverable?
[27] In Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429, the court confirmed that the principle of discoverability applies in the context of third party claims for contribution and indemnity:
Properly interpreted, s. 18 works with other provisions of the Limitations Act, 2002 to create a presumed start date for the running of the limitation period. That presumed limitation period start date will result in a claim for contribution or indemnity being statute-barred two years after the party seeking contribution or indemnity is served with a claim in the proceeding in which contribution or indemnity is sought, unless that party proves that the claim for contribution or indemnity was not discovered and was not capable of being discovered through the exercise of due diligence until some later date. [See para 54].
[28] At the hearing of the motion, counsel agreed that the main issue is when the defendants knew or ought to have known that Cruickshank was hired by HMQ to maintain this portion of Highway 401 at the material time. In other words, when was the claim against Cruickshank discoverable by the defendants?
[29] In Morrison v. Barzo, 2018 ONCA 979, the court confirmed that there is a two-stage approach when attempting to add a party to a proceeding after the apparent expiry of a limitation period:
…. First, the plaintiff must overcome the presumption in s. 5(2) that he or she knew of the matters referred to in s. 5(1)(a) on the day the act or omission on which the claim is based took place, by leading evidence as to the date the claim was actually discovered (which evidence can be tested and contradicted by the proposed defendant). The presumption is displaced by the court's finding as to when the plaintiff subjectively knew he had a claim against the defendants: Mancinelli, at para. 18. To overcome the presumption, the plaintiff needs to prove only that the actual discovery of the claim was not on the date the events giving rise to the claim took place. It is therefore wrong to say that a plaintiff has an onus to show due diligence to rebut the presumption under s. 5(2): Fennell, at para. 26.
32 Second, the plaintiff must offer a "reasonable explanation on proper evidence" as to why the claim could not have been discovered through the exercise of reasonable diligence. The evidentiary threshold here is low, and the plaintiff's explanation should be given a "generous reading", and considered in the context of the claim: Mancinelli, at paras. 20 and 24.” [See paras. 31 – 32].
1. Section 5(1)(a): When did the defendants know of their claim against Cruickshank?
[30] The two-stage approach endorsed in Morrison essentially mirrors sections 5(1)(a) and 5(1)(b) of the Limitations Act.
[31] In determining when the defendants first knew of their claim against Cruickshank it is necessary to address when the defendants first knew the elements of the claim identified in s. 5(1)(a) of the Limitations Act:
(i) That the injury, loss, or damage had occurred;
(ii) That the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) That the act or 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.
[32] With respect to the first stage, HMQ and Cruickshank submit that the defendants knew about the potential claim against Cruickshank as early as the date they were served with the plaintiff’s statement of claim (i.e. May 12, 2015).
[33] I agree with HMQ and Cruickshank with respect to factors (i)(ii) and (iv). I find that on May 12, 2015, the defendants knew that the injury, loss or damage had occurred, that the injury loss or damage was caused by or contributed to by an act or omission and that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it. This is evident by the defendants’ admission that the accident was caused by snow and ice and the fact that the third party claim was initiated against HMQ.
[34] However, I accept the defendants’ evidence on this motion that they did not have subjective knowledge that the act or omission was that of Cruickshank until the HMQ representative gave evidence at examinations for discovery on November 19, 2019. The defendants have rebutted the presumption that they knew of the claim against Cruickshank on May 12, 2015.
2. Section 5(1)(b): When ought a reasonable person to have first known of the claim against Cruickshank?
[35] The second stage of the analysis requires a consideration as to: “the date 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).” At this stage, the due diligence of the party seeking the amendment is one factor that a court may take into consideration.
[36] HMQ and Cruickshank submit that, even if the defendants did not have the subjective knowledge at the time, they first ought to have known of the claim against Cruickshank on May 12, 2015, the date they were served with the statement of claim. Alternatively, HMQ and Cruickshank take the position that the defendants would have discovered that Cruickshank was the maintenance contractor at the material place and time if they had exercised reasonable diligence before the expiry of the limitation period (i.e. May 12, 2017).
[37] In support of their position, HMQ and Cruickshank rely on a 2020 decision of Master McGraw: Ali v. City of Toronto, 2020 ONSC 5888. In Ali, the plaintiff brought a motion seeking leave to amend to add an additional defendant. The plaintiff in that case slipped and fell on a municipal sidewalk and originally only named the City of Toronto as a defendant. As it turned out, Toronto had hired an independent contractor to maintain the sidewalk where the plaintiff had fallen. The plaintiff did not find out that information until it was disclosed by an insurance adjuster for the city after the limitation period had expired.
[38] In Ali, Master McGraw dismissed the plaintiff’s motion to add the contractor and stated: “the presence of snow and ice on a City sidewalk was a trigger which should have caused the Plaintiff or her counsel to inquire into the existence of a winter maintenance contractor for the City.” [See para. 28].
[39] In Mancinelli v. Royal Bank of Canada, 2018 ONCA 544, the court confirmed that the evidentiary burden on the moving party on this type of motion is low and whether due diligence was exercised must be considered in context. [See para 24].
The Third Party Pleadings
[40] In this case, the defendants allege they were under the impression that HMQ alone was responsible for the winter maintenance of Highway 401 at the location of the accident at the material time. In support of their position, the defendants rely on the pleadings.
[41] The defendants’ third party claim against HMQ contains the following allegations:
a. “The collision of the motor vehicles was caused and contributed by snow and slush on the road causing a condition of non-repair which had not been properly nor reasonably remedied through winter maintenance to correct the condition of the non-repair.” (para. 3)
b. “The Third Party, Her Majesty the Queen in Right of the Province of Ontario is the Crown in Right of Ontario and the Ministry of Transportation of Ontario is the representative of the Crown responsible for, amongst other things, the winter maintenance of Ontario’s Provincial Highways including the relevant portions of Highway 401 at issue in the proceeding.” (para.10)
c. “The winter maintenance includes the responsibility for patrols, inspection, monitoring and deployment of equipment to identify a hazardous road condition by reason of a winter storm event and to sand, salt and plow the Highway to remove snow and ice from the Highway within a reasonable period of time so that a condition of non repair of the Highway does not unreasonably develop or persist.” (para. 11)
d. “Without admitting liability or damages, the Defendants, state that, if the Plaintiff suffered damages, injuries or losses as alleged, the same were caused and contributed to by the negligence of the Third Party, the particulars or which include the following:
a. Failure to perform adequate and reasonable winter maintenance procedures;
b. Failure to train and supervise winter maintenance personnel;
c. Contracting out winter maintenance procedures to sub contractor(s) having inadequate training and supervision;
d. Failure to supervise and monitor the competence and adequacy of the winter maintenance personnel and sub contractors;
e. Failure to ensure the adequacy of equipment, supplies and resources required to monitor and deploy reasonable winter maintenance procedures;
f. Failure to warn the public of the inadequacy of the winter maintenance resources available to the Highway;
g. Failure to follow and require the known standards of care required for the reasonable deployment of winter maintenance resources to maintain and restore the Highway to a condition of non repair; and
h. The failure to abide by tried and true winter maintenance procedures.” (para. 15)
[42] The third party claim contains allegations that are typical of pleadings of this nature and are, to some extent, boilerplate.
[43] HMQ’s defence to third party claim, contains the following relevant information:
a. “HMQ has some statutory responsibilities in connection with Highway 401, but does not admit the entirety of the responsibilities alleged against it, and puts any party alleging same to the strict proof thereof. Any pertinent responsibilities that HMQ may have had in connection with the highway at or about the material time were met. Even if there had been some omission to comply with some such obligation (which is not admitted but denied), it was immaterial, and the accident was not caused by any omission or any failure of HMQ.” (para. 3)
b. “HMQ states that it took all reasonable steps to comply with any duties it may have had as alleged, or at all. HMQ or its agents met any applicable standards of care and are entitled to the benefit of any statutory and/or regulatory limitations, defences or restrictions on the claims being advanced against HMQ directly or indirectly.” (para. 11)
[44] Perhaps more notably, HMQ’s defence to third party claim makes no mention of an independent contractor whatsoever.
[45] Rule 25.06(1) provides: “Every pleading shall contain a concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved.” The fact that HMQ hired an independent contractor to conduct the winter maintenance is a material fact that one would have expected to see in the defence to third party claim.
[46] By the time that HMQ delivered its defence to third party claim, on January 6, 2017, I find that it was reasonable for the defendants to assume that HMQ was responsible for the winter maintenance of this section of Highway 401 at the material time. The failure of HMQ to plead any material facts regarding the involvement of an independent contractor should not be to the detriment of the defendants.
Delay in Proceedings
[47] Following the delivery of HMQ’s defence to third party claim, counsel for HMQ advised the other parties that they would not agree to produce a representative of HMQ for examination for discovery until all other information was provided by the other parties. Subsequently, HMQ took the position that they did not have to produce a representative to be examined for discovery as the third party claim was prohibited pursuant to s. 29(4) of the Workplace Safety and Insurance Act, 1998, S.O. 1997, c. 16, sched. A, and the s. 33(4) of the Public Transportation and Highway Improvement Act, R.S.O. 1990, c.P.50.
[48] The examinations for discovery of the plaintiff and the defendants proceeded on May 28, 2018. HMQ refused to produce a representative on this date and refused to provide documentary disclosure.
[49] As noted above, the defendants brought a motion to compel HMQ to submit to documentary and oral discovery. Justice Ryan-Bell released her decision on the motion on October 1, 2019 and concluded that HMQ was subject to the discovery provisions in s. 8 of the Proceedings Against the Crown Act, R.S.O. 1990, c. P. 27 [PACA]. HMQ was ordered to deliver its list of documents, together with copies of its schedule “A” documents and to produce a representative to attend an examination for discovery.
[50] Patrol records that included the Cruickshank logo were contained in HMQ’s schedule “A” productions. These documents were produced on or about October 25, 2019. At the examination for discovery of the HMQ representative it was revealed that HMQ hired Cruickshank to maintain the section of Highway 401 where the accident occurred at the material time.
[51] At the hearing of the subject motion, HMQ attempted to re-litigate the issue that was before Justice Ryan-Bell at the prior motion by arguing HMQ was justified in withholding an opportunity for discovery. The decision of Justice Ryan-Bell was not appealed and is conclusive with respect to HMQ’s discovery obligations.
[52] If HMQ had made timely documentary disclosure in accordance with its obligations, the Defendants would have had an opportunity to inspect the patrol records and identify that an independent contractor was involved in maintaining this section of Highway 401 at the material time. The failure of HMQ to make timely and appropriate documentary disclosure and HMQ’s initial refusal to produce a representative for an examination for discovery should not be to the detriment of the defendants.
Evidence of HMQ
[53] HMQ submits that the defendants could have taken reasonable steps to discover that an independent contractor was responsible for maintaining the roadway and that the defendants’ failed to do so within the limitation period.
[54] Firstly, HMQ’s affiant suggests the defendants should have noticed a sign posted alongside Highway 401 that identified the contractor responsible for maintaining the relevant section of the roadway. To be clear, the accident took place outside of Belleville. The evidence of HMQ was that a sign would have been located alongside the Highway 401 in Port Hope. Further, the evidence provided by HMQ on this motion is by way of a photograph of the sign that was present in September of 2012. That sign identifies Cruickshank as the contractor.
[55] The speed limit on Highway 401 is 100 km/hr. Whether or not the sign would have been evident to a reasonable person driving down the highway in the first place is questionable. Regardless, what has been overlooked by HMQ is the fact that, by the time that the defendants were served with the statement of claim, over two years had passed since the accident. There was no evidence regarding what sign was in place, if any, in May of 2015 after the defendants were served with the statement of claim. Further, the sign was located so far from the accident location that I am not convinced that a reasonable person would have made the connection.
[56] Secondly, HMQ states that the defendants could have conducted internet searches that would have revealed that Cruickshank was the independent contractor for the relevant section of Highway 401 at the material time. In support of their position, HMQ’s affiant includes printouts of historic versions of the Ministry of Transportation’s website that were accessed using the “Wayback Machine”.
[57] The evidence put forward by HMQ regarding the hypothetical internet searches the defendants could have conducted is problematic. There is no information about how one would access a “Wayback Machine” to allow the court to consider whether this is something a reasonable person ought to have done. Further, HMQ has again failed to appreciate that the relevant time frame is not the date of the accident, but rather is the date on which the defendants were served with the statement of claim. Based on the evidence before me on this motion, I am not satisfied that if the defendants conducted an internet search when they were served with the statement of claim that they would have been able to determine that Cruickshank was hired by HMQ to maintain Highway 401 at the material time and place.
[58] Finally, HMQ submits that the defendants should have known that Cruickshank was the independent contractor well before the expiry of the limitation period because counsel for the plaintiff’s law office had previously commenced an action that included Cruickshank as a party, in addition to HMQ, related to an accident on Highway 401. To be clear, HMQ is suggesting that the defendants should have been aware of unrelated litigation involving a different plaintiff, a different accident, and which counsel for the defendants’ office was not involved whatsoever. I reject this submission. I do not accept that a reasonable person should have known that Cruickshank was the independent contractor at the material time and place because of Cruickshank’s involvement in unrelated litigation.
SUMMARY
[59] The caselaw relied upon by HMQ and Cruickshank emphasizes that, on a motion to add a party after the expiry of the presumed limitation period, evidence of the moving party’s due diligence is necessary: Laurent-Hippolyte v. Blasse et al, 2018 ONSC 940 and Pepper v. Zellers Inc. 2006 42355 (ON CA), 2006, 83 O.R. (3d) 648. I agree. However, this case can be distinguished to the ones referred to by HMQ and Cruickshank for the following reasons:
a. HMQ did not plead material facts that identified that it hired an independent contractor in its defence to third party claim;
b. HMQ refused to provide documentary disclosure until it was compelled to do so by order of this court after the defendants were forced to bring motions; and
c. HMQ refused to produce a representative to attend at an examination for discovery until it was compelled to do so by order of this court after the defendants brought a motion.
[60] In this case, the parties were not on an even playing field. HMQ had relevant information in its possession and did not produce it to the defendants until ordered by the court despite its obligations to do so under the procedural regime in place at the time [PACA].
[61] While HMQ relies on the fact that the defendants never specifically inquired about an independent contractor prior to the expiry of the presumptive limitation period, I am not satisfied that HMQ would have even provided an answer given the history of motions to compel disclosure and relevant information. This is one of the reasons that this case can be distinguished from Ali.
[62] The defendants submit that the claim against Cruickshank was only discoverable on November 19, 2019 when the HMQ representative was finally examined for discovery. I disagree. I find that the defendants’ claim against Cruickshank was discoverable as early as October 25, 2019 when HMQ finally disclosed patrol records that included the Cruickshank logo. The Cruickshank logo should have triggered the defendants to make an inquiry as to whether HMQ hired a maintenance contractor at the material place and time.
[63] I find that the defendants’ third party claim against Cruickshank is not statute barred by virtue of the Limitations Act. Consequently, Cruickshank is not at liberty to plead a limitation defence to the third party claim.
ORDER
[64] An order shall issue as follows:
The defendants are granted leave to amend the third party claim to add Cruickshank as a third party as set out in the proposed amended third party claim contained in the defendants’ motion record.
The defendants’ claim against Cruickshank is not statute barred by virtue of the Limitations Act.
COSTS
[65] Costs of this motion are reserved. If the parties cannot come to an agreement on costs of the motion on or before April 26, 2021, counsel shall file cost outlines in accordance with the following schedule: the defendants shall serve and file their cost outline on or before May 10, 2021; HMQ and Cruickshank shall serve and file their respective cost outlines on or before May 25, 2021; after which time I will determine the issue of costs based on the material filed.
[66] Counsel shall file their respective cost outlines by sending them by email to the Superior Court of Justice civil trial coordinator in Kingston assigned to this matter.
Muszynski J.
Date: March 24, 2021