Canadian Pacific Railway Company v. Canadian National Railway Company et al.

Court File No.: CV-20-639457 Motion Heard: 2023-09-15 Superior Court of Justice - Ontario

Re: Canadian Pacific Railway Company, Plaintiff And: Canadian National Railway Company, Procor Limited and Glencore Canada Corporation d/b/a Norfalco Sales, Defendants

Before: Associate Justice Jolley

Counsel: Ian Thompson, counsel for the moving party plaintiff on the motion to amend and respondent on the motion to strike Michael Beeforth and Mark Glynn, counsel for the defendant Canadian National Railway Company, moving party on the motion to strike and responding party on the motion to amend Forrest Hume and Dana Schindelka, counsel for the defendant Procor Limited, observing Aaron Gold, counsel for the defendant Glencore Canada, observing

Heard: 15 September 2023

Reasons for Decision

[1] The plaintiff (“CP”) seeks an order permitting it to amend paragraph 7 of its reply. The issue originally came before the court as a motion to strike the original paragraph 7 brought by the defendant Canadian National Railway Company (“CN”) and supported by the Transportation Safety Board of Canada (“TSB”), which indicated it planned to seek leave to intervene. In response, CP filed this amendment cross motion and a skirmish ensued over which motion should be heard first.

[2] The issue is not entirely moot as, if the amendment is not granted, the reply could be left with the original paragraph 7. However, the plaintiff has represented to TSB that it does not intend to include the offending language from the original paragraph in its reply. On that basis, the original paragraph 7 is struck.

[3] The issue before me is whether the plaintiff will be permitted to plead the proposed amended paragraph in its place.

Background

[4] The claim arises from the derailment of a CP freight train on 20 March 2020. CP alleges that it determined that a wheel set manufactured and assembled by CN had demounted and caused the derailment and it sued CN as the designer and manufacturer of the wheel set.

[5] The plaintiff’s original reply alleged:

7. On April 30, 2020, the Transportation Safety Board of Canada wrote to Transport Canada and concluded that the derailment was caused by the Defective Wheel Set installed by CN in 2005.

[6] CN and TSB took the position that the paragraph improperly pleaded the conclusions of the TSB investigation and were, as a result, in violation of section 33 of the Canadian Transportation Accident Investigation and Safety Board Act, SC 1989, c.3.

[7] CP seeks leave to replace the original paragraph with the following:

7. The Transportation Safety Board of Canada ("TSB") investigated the derailment and examined the Defective Wheelset at CP's Test Department in Winnipeg, Manitoba. The TSB then wrote to Transport Canada on April 30, 2020 to advise of the progress the TSB had made in its investigation and to inquire what action Transport Canada would be taking.

[8] CN takes the position that the proposed amendment is improper and should not be permitted. For the reasons set out below, I agree.

The Law

[9] The rules provide that 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.

[10] Amendments must still comply with the rules on pleadings. A proposed amendment cannot be scandalous, frivolous, vexatious or an abuse of the court’s process, such that it could be struck under rule 25.11.

[11] A reply is only permitted in two instances: (a) where a party intends to prove a version of facts different from that pleaded in the other side’s defence (rule 25.08(1)); and (b) where the party’s response might take the other side by surprise or raise an issue that has not been raised by a previous pleading (25.08(2)).

[12] If a reply is permitted, it must contain a concise statement of the material facts on which the party relies but not the evidence by which those facts are to be proved.

The Proposed Amendment Is Not Proper Reply

[13] I find the proposed paragraph does not meet either requirement of rule 25.08. It does not propose to plead a version of events different from that pleaded by the defence. In its defence, CN admits that it manufactured the wheelsets between 1998 and 2001. It discovered a wheelset anomaly in 2001 and put a plan in place to remove and service the affected wheelsets, including an industry-wide notice to alert participants to cease using them. In early 2008, Transport Canada issued an emergency safety directive requiring CN to take certain steps to identify and remove wheelsets from service. CN pleads that it complied with the directive which was then lifted in December 2008. CN denies that its acts or omissions caused or contributed to the derailment. The statement of defence does not mention the 2020 TSB investigation. The proposed amendment cannot be characterized as one in which CP intends to prove a different version of facts from that pleaded in CN’s defence.

[14] CP argues that the proposed amendment is necessary to prove the derailment because CN has denied it occurred. A review of the statement of defence demonstrates that CN has not denied the derailment – it references the derailment specifically in paragraph 22 of its defence and pleads that, to the extent its acts or omissions caused or contributed to “the derailment at issue”, which is denied, CP was contributorily negligent. It also describes the trip in issue at paragraph 25 as the one “during which the derailment occurred.” Even if CP needed to prove the derailment in the face of a denial, there are other clearer ways to do so than a reference to the fact that TSB investigated the incident.

[15] Nor do I find that CN would be taken by surprise if CP did not plead in its reply that TSB examined the wheelset after the derailment and wrote to Transport Canada on its progress and to ask about Transport Canada’s intentions. The report has been included in the plaintiff’s productions and has been the subject of questions on examinations for discovery.

[16] The proposed amendment is not required for the purposes of rule 25.08 and is denied on that basis.

The Facts Pleaded are not Material Facts on which the Plaintiff Relies for its Claim

[17] I find, in the alternative, that the proposed amendment does not comply with rule 25.06(1) in that it is not a statement of material fact on which the plaintiff relies for its claim.

[18] As stated by Perell, J. in Del Giudice v Thompson 2021 ONSC 5379 (footnotes omitted):

[53] Material facts include facts that the party pleading is entitled to prove at trial, and at trial, anything that affects the determination of the party’s rights can be proved; accordingly, material facts includes facts that can have an effect on the determination of a party’s rights. A fact that is not provable at the trial or that is incapable of affecting the outcome is immaterial and ought not to be pleaded. A pleading of fact will be struck if it cannot be the basis of a claim or defence and is designed solely for the purposes of atmosphere or to cast the opposing party in a bad light. As described by Riddell J. in Duryea v. Kaufman, such a plea is said to be “embarrassing”.

[54] “Material” facts include facts that establish the constituent elements of the claim or defence. The causes of action must be clearly identifiable from the facts pleaded and must be supported by facts that are material.

[19] At a high level, the statement of claim alleges that CN (a) breached its duty of care in the design and manufacture of the wheel set, (b) failed to warn CP of the defect and (c) failed to repair the defect when it became known. The proposed pleading alleges that TSB investigated the derailment, examined the wheelset, and then wrote to Transport Canada. The fact of TSB’s investigation and correspondence cannot go to prove any of the constituent elements of CP’s claims against CN or to refute CN’s defence. Further, the Act is clear that no finding of TSB shall be construed as assigning fault or determining civil liability (see subsection 7(3)), so it cannot be used for that purpose.

[20] TSB objected to the original paragraph on that basis that it included the opinion of the investigator which “is not admissible in evidence in any legal, disciplinary or other proceedings.” (see section 33 of the Act). CP argues in its letter to CN’s counsel of 2 May 2023 that the proposed paragraph does not violate section 33 as it is not an opinion, but contains “relevant evidence that is not precluded by section 33 of the Act and can be fairly referenced in a pleading (emphasis added).”

[21] As noted in Del Giudice, supra at paragraph 55, consistent with rule 25.06(1):

[55] A pleading shall contain material facts, but it should not contain the evidence by which those facts are to be proved. Pleadings of evidence may be struck out. The prohibition against pleading evidence is designed to restrain the pleading of facts that are subordinate and that merely tend toward proving the truth of the material facts.

[22] It remains open to the plaintiff to satisfy a trial judge that the fact that TSB investigated the derailment, examined the wheelset and wrote to Transport Canada is relevant evidence and admissible at trial. But it cannot be construed as a material fact, in my view.

[23] The plaintiff argues that the proposed paragraph should be permitted so that the facts and observations of the investigator, if not his or her opinions or conclusions, can be used by independent experts. To the extent that a party wishes to rely on the TSB report or where its experts have relied upon observations, tests and test results obtained by the TSB investigators, the proper route is a motion under section 32 of the Act. On such a motion, the court will consider whether or not “special cause” is shown on which the court could find that the TSB investigator is a competent witness solely for the purpose of testifying with respect to his observations, tests and test results. This was the process followed in Canadian National Railway Company v ACF Industries LLC et al, 2019 ONSC 307.

[24] I was not presented with any case law to suggest that the existence of the investigation had to be pleaded to ground a motion to compel an investigator to testify under section 32. In fact, the court hearing that section 32 motion in CNR v ACF, supra, admitted the TSB investigator’s observations, tests and test results without there being any reference to the TSB investigation in the pleading.

The proposed amendment violates rule 25.11

[25] If the amendment is not intended to introduce the opinions and conclusions of TSB, then what is left is a pleading that TSB was involved, conducted an investigation and reported to Transport Canada about it.

[26] CN argues that the proposed amendment violates rule 25.11 as being scandalous on the basis that it is both irrelevant and prejudicial.

[27] It argues that pleading the fact of the investigation creates an aura of wrongdoing on CN’s part. It relies on Robert v Brassard 1991 QCCA 2852 QC CA, a medical malpractice case in which the plaintiff pleaded that the coroner investigated the death and supported the plaintiff’s claim against the defendant. The plaintiff also attached the coroner’s report to her statement of claim. In striking the report and references to it, the court accepted the defendant’s argument that pleading the report and conclusions was prohibited by legislation. Further, they prejudiced the defendant by inferring that there was something suspicious about the circumstances of the deceased’s death. The court also found that the allegations were irrelevant to the issues in the wrongful death litigation as they did not advance any of the elements of the cause of action.

[28] The mandate of TSB is to investigate any transportation occurrence, including a “railway occurrence”, defined to mean “(a) any accident or incident associated with the operation of rolling stock on a railway, and (b) any situation or condition that the Board has reasonable grounds to believe could, if left unattended, induce an accident or incident described in paragraph (a).” The only implication of an investigation is that there has been an accident or incident, which is admitted here. It, on its own, does not imply wrongdoing on any particular party. However, this particular pleading of TSB’s involvement, in such proximity to the allegations of negligence against CN, suggests that TSB agreed with CP that CN was negligent and prejudices CN.

[29] If I am wrong in that conclusion, the proposed paragraph is struck on the same basis that the coroner’s report in Robert v Brassard was struck, that is, it is irrelevant to the issues in the civil claim and therefore scandalous.

[30] The defendant’s motion to strike the original paragraph 7 is granted. The plaintiff’s motion to amend is dismissed. If the parties cannot settle the issue of costs by 30 October 2023, they are to advise me via my registrar at Christine.Meditskos@ontario.ca. They may upload a supplementary costs submission to address only the issue of any offers.

Associate Justice Jolley

Date: 20 September 2023