



COURT OF APPEAL FOR ONTARIO

CITATION: Laughlin v. Esmaeili, 2016 ONCA 826

DATE: 20161107

DOCKET: C61111

Hoy A.C.J.O., Benotto and Huscroft JJ.A.

BETWEEN

Julia Laughlin
and
    Edward Kennis

Plaintiffs

and

Manouchehr Esmaeili also known as Manouchehr
    Esmaeiliaghabagher and Soheila Babaei,
The Corporation of
    the Town of Markham
,
The Corporation of the City
    of Toronto
, John Doe and Aviva Canada Inc.

Defendants (
Respondent
/
Appellant
)


Danette C. Cashman, for the Defendant (Respondent in
    Motion/Appellant), the Corporation of the City of Toronto

David Boghosian, for the Defendant (Applicant in
    Motion/Respondent in Appeal), the Corporation of the Town of Markham

Heard:  October 3, 2016

On appeal from the judgment of Justice Mark L. Edwards of
    the Superior Court of Justice, dated September 3, 2015, with reasons reported
    at 2015 ONSC 5490, and from his costs order, dated January 29, 2016, with
    reasons reported at 2016 ONSC 750.

BY THE COURT:

[1]

The plaintiffs
    vehicle struck a concrete curbstone that had somehow made its way into the curb
    lane of Steeles Avenue East.

[2]

Under s. 44(1) of
    the
Municipal Act, 2001
, S.O. 2001, c. 25, the municipality that has
    jurisdiction over a highway is required to keep it in a state of repair that
    is reasonable in the circumstances, including the character and location of the
    highway.  Steeles Avenue is the border between the appellant, the City of
    Toronto, and the respondent, the Town of Markham, and the plaintiff sued both
    Toronto and Markham. Toronto then cross-claimed against Markham, alleging that Markham
    caused or contributed to the plaintiffs injuries.

[3]

The motion judge
    granted summary judgment in favour of Markham, dismissing both the plaintiffs
    claim and Torontos cross-claim against it. He found that the curbstone that
    the plaintiff struck emanated from a portion of the grassy boulevard beside the
    north side of Steeles Avenue over which Toronto had exclusive jurisdiction and
    that Markham therefore was not liable to the plaintiff.  He further concluded
    that Markham  which had responsibility for the nearby sidewalk and conducted
    periodic inspections of it and sometimes of the adjacent boulevard  did not
    owe a duty of care to Toronto to notify it of any and all potential problem
    areas.

[4]

The motion judge
    fixed Markhams costs of the action and the summary judgment motion in the
    amount of $51,903.97, inclusive of HST and disbursements. While the motion
    judge dismissed the plaintiffs claim against Markham and acknowledged that
    there had been no finding of liability against Toronto, he noted that it was
    beyond dispute that the plaintiff was the unfortunate victim of striking a
    concrete curbstone in the middle of a roadway. He concluded that it was just
    and fair in all of the circumstances of this case that Toronto alone be
    responsible for Markhams costs and characterized that order as a 
Sanderson
order.

[5]

Toronto appeals the
    motion judges dismissal of its cross-claim against Markham. It also seeks
    leave to appeal the motion judges costs disposition.

The issues on appeal

[6]

Toronto advances
    four arguments:

1.

The motion judge should not have
    granted summary judgment because the plaintiffs claim against it is proceeding
    to trial. It says there will necessarily be a duplication of proceedings and
    there is a possibility of inconsistent findings.

2.

The motion judge made a finding of
    fact  namely, that the curbstone was a hazard that Toronto had an obligation
    to remove  that should have been left to the trial judge.

3.

The motion judge erred in
    concluding that Toronto had exclusive jurisdiction over the portion of the
    grassy boulevard from which the curbstone emanated; that Markham accordingly was
    not liable to the plaintiff; and that Markham did not owe the plaintiff or
    Toronto a duty of care or, at a minimum, he should have concluded that these
    were genuine issues requiring a trial.

4.

The motion judge erred in making a
Sanderson
order, requiring it to pay all of Markhams costs, when
    there had been no finding of liability against it.

[7]

We address these
    arguments in turn.

Analysis

Issues 1 and 2

[8]

We are not
    persuaded that there will be a duplication of proceedings or that there is a risk
    of inconsistent findings, such that it was not in the interest of justice that
    summary judgment be granted.

[9]

With the release
    of Markham from the litigation, the trial will be focussed on whether Toronto
    breached s. 44(1) of the
Municipal Act
and, if so, on the quantum of
    damages suffered by the plaintiff. The trial judge will not need to consider
    whether Markham caused or contributed to the plaintiffs injuries.

[10]

The motion judge
    was clear that no one knows how the curb stone [sic] found its way from the
    grassy boulevard to the travelled roadway on Steeles Avenue. Toronto does not
    appear to take issue with the motion judges finding that the curbstone
    emanated from the grassy boulevard beside Steeles Avenue. Torontos arguments
    that there is a risk of inconsistent findings and that the motion judge made a
    finding that he should have left to the trial judge arise out of what the
    motion judge wrote at para. 23:

The hazard in question, i.e. the curbstone, was located on
    property over which Toronto had exclusive jurisdiction and, as such, in my view
    Toronto had the obligation to remove the curbstone or at least deal with it in
    such a way that it could not become a hazard. Toronto had the obligation under
    section 44 of the
Municipal Act
to keep the roadway in a state of
    repair that was reasonable in the circumstances.

[11]

However, the
    motion judge added this, at para. 24:

Whether the City of Toronto on the facts of this case met its
    duty of care is not for this court to ultimately determine. The only issue that
    this court has to determine is whether Markham had any responsibility with
    respect to the curbstone...

[12]

There is no
    dispute that at the time of the accident the curbstone was in the curb lane of
    Steeles Avenue East and that Toronto had an obligation under s. 44 of the
Municipal
    Act
to keep the roadway in a state of repair that was reasonable in the
    circumstances. To the extent that the motion judge might be argued to have said
    more than this at para. 23, the issue is not
res judicata
. The motion
    judge was clear that he made no binding determination of whether or not Toronto
    breached its obligation under s. 44. Therefore, there is no risk of an
    inconsistent finding at trial.

Issue
    3

[13]

We are not
    persuaded that there is any basis for this court to interfere with the motion
    judges conclusion that Toronto had exclusive jurisdiction over the portion of
    the grassy boulevard beside Steeles Avenue from which he found that the curbstone
    emanated and that Markham accordingly was not liable to the plaintiff. Further,
    we agree with the motion judge that Markham did not owe Toronto a duty of care
    in relation to the boulevard arising out of its periodic inspections of the
    sidewalks and the boulevard.  And we are not persuaded that the motion judge
    erred by failing to conclude that these were genuine issues requiring a trial.

Exclusive
    jurisdiction

[14]

In its statement
    of defence and cross-claim, Toronto admitted that it has jurisdiction over the
    Steeles Avenue East roadway.

[15]

We agree with the
    motion judge that, pursuant to an agreement dated April 8, 1974 (the 1974
    agreement) Toronto assumed jurisdiction over the portion of Steeles Avenue
    where the accident occurred. We reject Torontos argument that the 1974
    agreement created
shared
jurisdiction over Steeles Avenue, and that
    Markham also has jurisdiction over Steeles Avenue.  The 1974 agreement is
    clear. Its recitals provide that the parties have agreed that Steeles Avenue
    comprising the boundary between The Municipality of Metropolitan Toronto and
    The Regional Municipality of York shall be assumed by [Toronto] as a
    metropolitan road And section 2 provides:

... [Toronto] shall have and may exercise all of the rights and
    powers and shall be subject to all of the duties and obligations with respect
    to the portions of Steeles Avenue assumed pursuant to this agreement as is the
    case under the [
Municipality of Metropolitan Toronto Act
, R.S.O. 1970,
    c. 295 (the 
MMTA
)] with respect to roads forming part of the Metropolitan
    Road System and with respect to the assumption of roads.

[16]

One provision in
    the 1974 agreement pointed to by Toronto requires that Toronto give notice of
    the proposed exercise of the powers provided by ss. 90, 91 and 92 of the
MMTA
affecting lands
in York
and that Toronto not exercise these powers
    without the York Regional Councils agreement. The contractual limitations on
    Torontos exercise of those powers to regulate land in York do not negate
    Torontos exclusive jurisdiction to maintain Steeles Avenue.  Toronto also
    relies on a provision that requires Toronto to refer proposed official plans,
    zoning by-laws, and plans of subdivision and amendments thereto to York for
    study and comment. However, this provision similarly does not diminish
    Torontos assumption of jurisdiction.

[17]

The motion judge
    also noted that the plaintiffs survey and the photographic evidence
    established that the curbstone emanated from an area over which Toronto had
    assumed jurisdiction. Indeed, Toronto does not dispute that the boulevard from
    which the motion judge found the curbstone had emanated is within the road
    allowance for Steeles Avenue (and therefore part of the highway for the
    purposes of s. 44(1) of the
Municipal Act
)
.

[18]

As we have
    indicated, s. 44(1) of the
Municipal Act
provides that the
    municipality that has jurisdiction over a highway is required to keep it in a
    state of repair that is reasonable in the circumstances, including the
    character and location of the highway. Therefore, having concluded that Toronto
    had exclusive jurisdiction over the boulevard, the motion judge correctly
    dismissed the plaintiffs action against Markham.

[19]

There were no
    material facts in dispute on this narrow issue before the motion judge. The
    motion judge properly concluded that whether Toronto had exclusive jurisdiction
    over the boulevard was not a genuine issue requiring a trial.

Markham
    did not owe Toronto a duty of care

[20]

Torontos
    assertion that Markham owed it a duty of care to inspect and maintain the
    boulevard and to notify it of hazards on the boulevard that Toronto should deal
    with rested solely on the evidence of one of its Roads Operations Managers,
    Hector Moreno.

[21]

His evidence was
    that, based on information provided to him by other Toronto staff and documents
    still somewhat in draft, he understood that (1) Markham did periodic
    inspections of the sidewalks that entailed at least some rudimentary
    examination of the boulevard; and (2) Toronto relies on the inspection and
    maintenance procedures undertaken by Markham and relies on Markham to notify it
    of hazards that should be dealt with by Toronto.  Toronto was unable to find
    and produce any of the documents referred to by Mr. Moreno.

[22]

The motion judge
    concluded as follows, at para. 22:

The fact that Markham had responsibility for the sidewalk
[1]
and would conduct
    annual inspections of the sidewalk, which would include the grassy boulevard,
    does not attract legal liability to Markham establishing a duty of care to
    notify Toronto of any and all potential problem areas. In that regard,
    Markhams representative in its examination for discovery, was asked what
    Markham would do if a problem on either the sidewalk or right-of-way was
    discovered. Mr. Robert Walker stated that if there was a serious problem it
    would be repaired right away. Further in his examination for discovery, Mr.
    Walker indicated that it was not all hazards that would be reported or
    repaired, as the City of Toronto would have been doing its own patrolling and,
    therefore, there was an expectancy that the City of Toronto would also see the
    hazard.

[23]

The
    Supreme Court of Canada has articulated a two-stage test for the determination
    of a duty of care in a case that does not fit an established category. First,
    the court must determine whether the facts disclose a relationship of
    proximity in which failure to take reasonable care might foreseeably cause harm
    to the plaintiff. If yes, there is a
prima facie
duty of care:
Knight
    v. Imperial Tobacco Canada Ltd.
, 2011 SCC 42, [2011] 3 S.C.R. 45, at para.
    39; see also
Reference re Broome v. Prince Edward Island
, 2010 SCC 11,
    [2010] 1 S.C.R. 360, at para. 14. If the plaintiff establishes a
prima facie
duty, the court must consider whether any residual policy considerations
    relating to the effect of recognizing a duty of care on other legal
    obligations, the legal system and society more generally should negate or
    narrow the
prima facie
duty:
Cooper v. Hobart
, 2001 SCC 79,
    [2001] 3 S.C.R. 537, at para. 37.

[24]

Proximity
    is a broad concept, concerning the relations between the parties, that one
    cannot reduce to a single characteristic, but the Supreme Court has identified
    expectations, representations, reliance, and the property or other interests
    involved as factors relevant to proximity analysis:
Hobart
, at paras.
    34-35. In essence, a finding of proximity reflects a conclusion that a duty
    ought to be imposed in particular circumstances because it is fair and just to
    do so having regard to the connection between the parties. Here, Toronto had
    specifically assumed responsibility from Markham under the 1974 agreement. As a
    result, Toronto owed a statutory duty of care to the plaintiff under s. 44(2)
    of the
Municipal Act
. The motion judge considered the evidence of Mr.
    Moreno and Mr. Walker regarding Torontos and Markhams expectations after the
    1974 agreement had been concluded. In substance, he found that there was not a
    relationship of sufficient proximity between Toronto and Markham because  on
    the evidence of the interactions between them and in this context of an assumed
    statutory duty of care  Toronto did not reasonably rely on Markham to notify
    it of any and all potential problem areas.  In our view, the facts did not
    disclose a relationship of proximity in which failure to take reasonable care
    might foreseeably cause harm to the plaintiff and the motion judge correctly
    found that Markham did not owe Toronto a duty of care.

[25]

Again, there were
    no material facts in dispute on the issue of whether Markham owed Toronto a
    duty of care, as alleged by Toronto. The motion judge properly concluded that
    whether Markham owed Toronto the alleged duty of care was not a genuine issue
    requiring a trial.

Issue 4

[26]

This brings us to
    Torontos argument regarding the motion judges costs disposition. A motion
    judges costs decision is accorded deference. Unless plainly wrong, a motion
    judges costs order,
Sanderson
or otherwise, should not be set aside:
    see
Moore (Litigation Guardian of) v. Wienecke
, 2008 ONCA 162, 90 O.R.
    (3d) 463, at para. 40.

[27]

Toronto argues
    that the motion judges costs order is plainly wrong because he ordered it to
    pay all of Markhams costs of the motion absent a determination that Toronto is
    liable to the plaintiff.

[28]

We agree.

[29]

In a
    multiple-defendant case in which the plaintiff succeeds against some defendants
    but not against others, the general rule is that the plaintiff is entitled to
    costs against the unsuccessful defendant, and the successful defendant is
    entitled to costs against the plaintiff. However, the courts have recognized
    that in some circumstances this general rule can lead to an unjust result. A 
Sanderson
order departs from the general rule and requires the unsuccessful defendant to
    pay the successful defendants costs.

[30]

The usual test
    for determining whether a
Sanderson
order is appropriate has two
    steps. First, the court asks whether it was reasonable to join the defendants
    together in one action. If the answer to that question is yes, then the court
    proceeds to the second step and uses its discretion to consider whether it
    would be just and fair in the circumstances to require the unsuccessful
    defendant to pay the successful defendants costs:
Moore
, at para. 41.

[31]

The motion judge
    first determined that it was entirely reasonable for the plaintiff to join
    Toronto and Markham as defendants in the action until such time as the evidence
    could establish whether one or other of them was responsible for the roadway.

[32]

Exercising his
    discretion, he then concluded that it was just and fair in all of the
    circumstances to issue a
Sanderson
order. He acknowledged that there had
    been no finding of liability as against Toronto. As we have said above, the
    motion judge noted that it was beyond dispute that the plaintiff was the
    unfortunate victim of striking a concrete curbstone in the middle of a roadway.
    Although the issue of whether the plaintiff is contributorily negligent is an
    issue for trial, the motion judge commented that it was difficult to imagine a
    situation where one could fault the plaintiff for what happened.

[33]

The fact that the
    plaintiffs vehicle struck a concrete curbstone is not a basis for a
Sanderson
order.  There was no suggestion that Torontos conduct on the summary judgment
    motion, or in the proceeding, was the basis for the motion judges order. 
    Assuming no such issue arises if Toronto is successful in the action, there will
    be no basis to order it to pay the costs of the action incurred by the other
    successful defendant. The motion judge specifically acknowledged that there had
    been no finding of liability against Toronto. This is a question for trial. At
    this juncture it was premature, and therefore inappropriate, to order Toronto
    to pay Markhams costs of the action.

[34]

Markham is
    entitled to costs against Toronto on the summary judgment motion and the
    cross-claim and costs against the plaintiff of the summary judgment motion and
    the action against the plaintiff.  Each shall be liable to pay Markham
    $25,951.50, which is one half of the total of $51,903.97 fixed by the motion
    judge. If the plaintiff succeeds against Toronto at trial, it shall be open to
    the trial judge in his or her discretion to direct that Toronto reimburse the
    plaintiff for any portion of the $25,951.50 amount that the plaintiff has paid
    to Markham. Alternatively, if the plaintiff succeeds at trial, it will be open
    to the trial judge to direct Toronto to pay any costs that Toronto owes to the
    plaintiff to Markham instead, on account of the $25,951.50 in costs that the
    plaintiff has been ordered to pay to Markham.

[35]

Although the
    plaintiff did not appear at the hearing of this appeal, and did not file any
    material in relation to the costs issue, there was evidence that she was served
    with all of Torontos materials on the appeal and therefore did so with
    knowledge of the position asserted by Toronto in relation to the motion judges
    costs disposition.

Disposition

[36]

We dismiss the
    appeal of the motion judges order granting summary judgment in favour of
    Markham, grant leave to appeal the motion judges costs disposition, and allow
    the appeal of the motion judges costs disposition. Costs of the summary
    judgment motion shall be payable as indicated above.  Markham shall be entitled
    to costs of the appeal, fixed in the amount of $14,500, inclusive of HST and
    disbursements.

Released:  AH  NOV 07 2016

Alexandra Hoy
    A.C.J.O.

M.L. Benotto J.A.

Grant Huscroft J.A.





[1]

It was not in dispute that through the operation of s. 55(1)
    of the
Municipal Act
and the 1974 agreement
    that Markham was responsible for the maintenance of the sidewalk on the portion
    of the north side of Steeles Avenue East where the accident occurred.


