Reasons for judgement were released recently by the BC Supreme Court, Vancouver Registry, discussing whether a government home improvement loan can create a private law duty of care.
In last month’s case (Benoit v. Banfield) the Plaintiff suffered a serious brain injury when falling from a staircase built by the Defendant. The Defendant reportedly built the stair case “without handrails or guards“.
The construction was financed in part by a forgivable loan provided by the Canada Mortgage and Housing Corporation (“CMHC”). The loan was part of a program called the Canadian Home Renovation Plan. The money was to be advanced “upon satisfactory completion of the work” by the homeowner and CMHC was to conduct two inspections to ensure the work was “completed satisfactorily“.
The Plaintiff sued the homeowner and also the CMHC. The CMHC applied to dismiss the lawsuit arguing that their limited relationship to the plaintiff did not create a private law duty of care. Madam Justice Wedge disagreed and allowed the lawsuit to proceed. In doing so the Court provided the following reasons:
In the present case, CMHC offered grants of up to $3,000 per applicant for a one-year period. The pool of funds from which to draw was limited in the amount of $30 million. Thus, even were one to consider the possibility of a duty of care to all loan recipients, the number of persons is not indeterminate. In the context of the present case, liability extends only to the class of persons who might reasonably be foreseen as users of the defective staircase in question.
Thus, I conclude that on the facts as pleaded by the infant plaintiff, there is a reasonable prospect of successfully establishing proximity. The plaintiff’s claim is grounded in allegations of specific conduct by CMHC concerning the creation of the defective staircase and its negligent inspections.
As noted by the Supreme Court of Canada in Imperial Tobacco at para. 47:
… where the asserted basis for proximity is grounded in specific conduct and interactions, ruling a claim out at the proximity stage may be difficult. So long as there is a reasonable prospect that the asserted interactions could, if true, result in a finding of sufficient proximity, and the statute does not exclude that possibility, the matter must be allowed to proceed to trial, subject to any policy considerations that may negate the prima facie duty of care at the second stage of the analysis.
This case falls squarely within the circumstances described in that passage, and accordingly the motion to strike is dismissed.
Lengthy reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, disposing of a personal injury lawsuit launched by a former NHL enforcer against the Delta Police and others following a 2006 assault which occurred at the Cheers Pub in Delta, BC.
In this week’s case (Burnett v. Moir) the Plaintiff suffered a moderately severe traumatic brain injury after being struck on the head with a bar stool. The injury ended the Plaintiff’s professional hockey career.
There was video surveillance which showed “an assailant striking the plaintiff on the head with a bar stool taken from the premises afer he apparently stumbled and fell to the ground as he and the others were being ejected“. The assailant was never identified.
The Plaintiff sued the owners and managers of the Cheers Pub, the local police, and the local government for compensation for his personal injuries. Prior to trial he settled his case with the Pub. The Plaintiff alleged that the local police and the local government were liable because they “failed to properly identify Cheers as a nuisance to the public, a trap for the unwary, and to take pre-emptive steps to abate the danger it represented to potential patrons”.
The Plaintiff led evidence to support his allegations including evidence that from 1998-2007 “there were a total of 2,410 police service calls to Cheers during that period, 231 of which were for assaults, 9 of which were for uttering threats, 10 of which were obstructing a peace officer, 138 for suspicious person/vehicle occurrences, 200 of which were for creating a disturbance, 217 for “unspecified assistance” and 1,605 of which were for “other”“.
Despite this evidence the lawsuit was dismissed with the Court finding that the Police and Local Government did not owe the Plaintiff a duty of care in these circumstances. Mr. Justice Cullen summarized his analysis as follows :
The presence or absence of a close causal connection between the negligence alleged and the harm caused is a factor in determining proximity. In Odhavji Estate v. Woodhouse, supra,Iacobucci J. held as follows in the context of a proximity analysis at para. 57:
Although a close causal connection is not a condition precedent of liability, it strengthens the nexus between the parties.
Where, as here, the causal connection, insofar as the failure to warn is concerned, is remote and speculative rather than close, it cannot be said that the nexus between the parties is strong or compelling.
For those reasons, while finding some limited evidence of a connection between the Delta Defendants and prospective Cheers patrons arising from the police corporate knowledge that a person entering Cheers was likely to be exposed to an environment involving some violent or turbulent circumstances, I am not satisfied the evidence reaches the level of establishing a close and direct relationship featuring the indicia of proximity identified by Chief Justice McLachlin in Hill v. Hamilton Wentworth, supra, or manifested in other decisions such as Jane Doe, Mooney, orSchacht.
I thus conclude the relationship at issue does not sustain sufficient proximity to found a duty of care. The plaintiff was but one of a large indeterminate pool of potential patrons of Cheers, rather than an identifiable potential victim of a specific threat.
The Supreme Court of Canada recently addressed the legal framework for striking pleadings pursuant to Rule 9-5. In short, the Court repeated the longstanding test that pleadings will only be dismissed under the BC Supreme Court Rules if they have ‘no reasonable prospect of success‘ and that the parties cannot tender evidence in support of these applications.
In the recent case (R v. Imperial Tobacco Ltd.) the Court was faced with a lawsuit by British Columbia seeking to recover health care costs for tobacco related illnesses. In the course of defending the lawsuit the tobacco companies issued Third Party Pleadings against the Government of Canada pleading that if they are held liable to the Government of BC the Federal Government should indemnify the Tobacco Companies for damages payable. The Government of Canada brought an application to dismiss the Third Party Pleadings.
The Supreme Court of Canada granted the application and dismissed the Third Party Pleadings. In doing so the Court provided the following legal framework for Pleading strike applications: This Court has reiterated the test on many occasions. A claim will only be struck if it is plain and obvious, assuming the facts pleaded to be true, that the pleading discloses no reasonable cause of action… Another way of putting the test is that the claim has no reasonable prospect of success. Where a reasonable prospect of success exists, the matter should be allowed to proceed to trial…
The power to strike out claims that have no reasonable prospect of success is a valuable housekeeping measure essential to effective and fair litigation. It unclutters the proceedings, weeding out the hopeless claims and ensuring that those that have some chance of success go on to trial.
This promotes two goods — efficiency in the conduct of the litigation and correct results. Striking out claims that have no reasonable prospect of success promotes litigation efficiency, reducing time and cost. The litigants can focus on serious claims, without devoting days and sometimes weeks of evidence and argument to claims that are in any event hopeless. The same applies to judges and juries, whose attention is focused where it should be — on claims that have a reasonable chance of success. The efficiency gained by weeding out unmeritorious claims in turn contributes to better justice. The more the evidence and arguments are trained on the real issues, the more likely it is that the trial process will successfully come to grips with the parties’ respective positions on those issues and the merits of the case.
Valuable as it is, the motion to strike is a tool that must be used with care. The law is not static and unchanging. Actions that yesterday were deemed hopeless may tomorrow succeed. Before Donoghue v. Stevenson,  A.C. 562 (H.L.) introduced a general duty of care to one’s neighbour premised on foreseeability, few would have predicted that, absent a contractual relationship, a bottling company could be held liable for physical injury and emotional trauma resulting from a snail in a bottle of ginger beer. Before Hedley Byrne & Co. v. Heller & Partners Ltd.,  2 All E.R. 575 (H.L.), a tort action for negligent misstatement would have been regarded as incapable of success. The history of our law reveals that often new developments in the law first surface on motions to strike or similar preliminary motions, like the one at issue in Donoghue v. Stevenson.Therefore, on a motion to strike, it is not determinative that the law has not yet recognized the particular claim. The court must rather ask whether, assuming the facts pleaded are true, there is a reasonable prospect that the claim will succeed. The approach must be generous and err on the side of permitting a novel but arguable claim to proceed to trial.
A motion to strike for failure to disclose a reasonable cause of action proceeds on the basis that the facts pleaded are true, unless they are manifestly incapable of being proven: Operation Dismantle Inc. v. The Queen,  1 S.C.R. 441, at p. 455. No evidence is admissible on such a motion: r. 19(27) of the Supreme Court Rules (now r. 9-5(2) of the Supreme Court Civil Rules). It is incumbent on the claimant to clearly plead the facts upon which it relies in making its claim. A claimant is not entitled to rely on the possibility that new facts may turn up as the case progresses. The claimant may not be in a position to prove the facts pleaded at the time of the motion. It may only hope to be able to prove them. But plead them it must. The facts pleaded are the firm basis upon which the possibility of success of the claim must be evaluated. If they are not pleaded, the exercise cannot be properly conducted…
It is not about evidence, but the pleadings. The facts pleaded are taken as true. Whether the evidence substantiates the pleaded facts, now or at some future date, is irrelevant to the motion to strike. The judge on the motion to strike cannot consider what evidence adduced in the future might or might not show. To require the judge to do so would be to gut the motion to strike of its logic and ultimately render it useless.
This is not unfair to the claimant. The presumption that the facts pleaded are true operates in the claimant’s favour. The claimant chooses what facts to plead, with a view to the cause of action it is asserting. If new developments raise new possibilities — as they sometimes do — the remedy is to amend the pleadings to plead new facts at that time.
Related to the issue of whether the motion should be refused because of the possibility of unknown evidence appearing at a future date is the issue of speculation. The judge on a motion to strike asks if the claim has any reasonable prospect of success. In the world of abstract speculation, there is a mathematical chance that any number of things might happen. That is not what the test on a motion to strike seeks to determine. Rather, it operates on the assumption that the claim will proceed through the court system in the usual way — in an adversarial system where judges are under a duty to apply the law as set out in (and as it may develop from) statutes and precedent. The question is whether, considered in the context of the law and the litigation process, the claim has no reasonable chance of succeeding.
This decision is also worth reviewing for the Court’s discussion of the concepts of proximity, forseeability, and private law duties of care which I will address in a separate post.
Reasons for judgement were released last week by the BC Supreme Court, Victoria Registry, discussing when a government authority can be pursued for damages for the negligent excercise of their powers.
In last week’s case (Sivertson (Guardian ad litem of) v. Dutrisac) the infant Plaintiff was brain injured allegedly “while in the care of…a licensed daycare ‘Kare Bare Child Care’ “. The Plaintiff sued various Defendants including the Capital Health Region “CHR” who were responsible for licensing the Daycare in question.
The CHR brought an application to dismiss the lawsuit against them arguing that even if they inadequately exercised their duties the lawsuit could not succeed because the CHR did not owe the Plaintiff a ‘private law duty of care‘. Madam Justice Boyd agreed and dismissed the lawsuit against the CHR. In doing so the Court provided the following reasons: The overall statutory scheme governing the licensing of daycare facilities provides an efficient framework to ensure the operation of community care facilities “in a manner that will maintain the spirit, dignity and individuality of the person being cared for “(s. 4(1)(a)(i)). …
As in the Cooper decision, the CHR and its inspectors must balance a myriad of competing interests when dealing with the licensing and inspection of daycares, including the daycare owner’s interest in the continued operation of her business and the parents’ and the public’s interest in the protection of children in the care of the daycare owner.
In my view, this balancing of interests is inconsistent with the imposition of a private duty of care. Thus, on a review of all of the authorities, and a consideration of the legislation in issue, I reject the notion that any private law duty of care was owed by the CHR (and its employees) to the infant plaintiff and his family.
If however I am in error, and it is found that such a private duty of law does arise in the circumstances of this case, then I nevertheless find that the application of the second stage of theAnns test yields no different result. As the Ontario Court of Appeal held in Williams v. Canada (Attorney General), 2009 ONCA 378, at para. 17, at the second stage :
…the court considers whether there are “residual policy considerations” that militate against recognizing a novel duty of care. …These are policy considerations that “are not concerned with the relationship between the parties, but with the effect of recognizing a duty of care on other legal obligations, the legal system and society more generally”.
In my view, any private law duty of care which may arise in this case would be negated for overriding policy reasons as in the Cooper case. This is because (i) the licensing officers were exercising both policy and quasi-judicial functions such that any decision required the balancing of both public and private interests. The Director must act fairly or judicially in removing an operator’s license and this is potentially inconsistent with a duty of care to children and families; (ii) the Director must make difficult discretionary decisions in an area of public policy. His decisions are made within the limits of the powers conferred on him in the public interest; and (iii) if there was a private duty of care owed by the Director to the children and parents, it would effectively create an insurance scheme for all those children attending licensed daycares within the Province, at great costs to the taxpaying public. As the Court held in Edwards, there is no indication here that the Legislature intended that result. Indeed the statutory immunity from liability provision suggests the contrary.
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When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.
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