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Ontario Court Ruling - Auto Insurance

Canadian Underwriter

Ontario court ruling helps clarify municipalities' legal obligations to motorists: lawyer

By: Greg Meckbach, Associate Editor

A recent Court of Appeal for Ontario ruling will be "very well received by municipalities" concerned about legal liability for keeping roads and bridges in a reasonable state of repair, a municipal liability and auto insurance expert with Lerners LLP suggests.

In a decision released Dec. 11, the province's appeal court overturned a ruling that made the Municipality of Dutton-Dunwich 50% liable for an incident in which a driver was injured after running a stop sign and sued the government.

On Jan. 16, 2007, Andrew Fordham went through a stop sign at the intersection of two gravel roads, under the jurisdiction of Dutton-Dunwich, about 50 km southwest of London.

There was a sharp curve beyond the intersection and the vehicle slid into a concrete abutment. Court records indicate that Fordham, 16 at the time, suffered brain damage and has no memory of the collision. Police and an expert witness described the intersection as "offset" while the municipality described it as "skewed."

There was no checkerboard sign warning of a change in the alignment of the road, noted Madam Justice Johanne N. Morissette, of the Ontario Superior Court of Justice, in a ruling released in 2012.

Justice Morissette ruled that Dutton-Dunwich was 50% liable for Fordham's injuries. If it were not for Fordham's failure to stop at the stop sign, and for the municipality's "failure to warn motorists of the hazard ahead, this accident would not have occurred," she wrote.

But her ruling was overturned, in a decision released Dec. 11, by the Court of Appeal for Ontario, which dismissed Fordham's lawsuit and awarded costs to the municipality.

Every municipality in Ontario is required, under Section 44 of the Municipal Act, to keep a highway or bridge under its jurisdiction "in a state of repair that is reasonable in the circumstances, including the character and location of the highway or bridge."

The Court of Appeal noted there is a four-step test, established by case law in Ontario, in analyzing a cause of action against a municipality under that law.

The first step requires the plaintiff to prove, "on a balance of probabilities that the municipality failed to keep the road in question in a reasonable state of repair," wrote Mr. Justice John Laskin, on behalf of himself and the other two judges hearing Dutton-Dunwich's appeal.

"A municipality's duty of repair is limited to ensuring that its roads can be driven safely by ordinary drivers exercising reasonable care," Justice Laskin wrote in the unanimous ruling. "A municipality has no duty to keep its roads safe for those who drive negligently."

The first, "non-repair" step, in the test cited by the court, is "an objective one," said Kirk Boggs, a Lerners partner based in Toronto, in an interview with Canadian Underwriter. "It's whether an ordinary driver exercising reasonable care can travel that section of road safely."

Some trial judges, Boggs added, "were not applying the 'objective ordinary driver exercising reasonable care' test properly."

The second step is causation. When a plaintiff proves a municipality failed to keep a road in a reasonable state of repair, it must then prove that the "non-repair" caused the accident, Justice Laskin wrote.

"If you have a curve in the road that's unmarked, but the evidence is that the person fell asleep at the wheel or they dropped a cigarette butt into their lap and went off the road, then the potential non-repair is not causative," Boggs told Canadian Underwriter. "So you have established a breach of the duty of repair but you have not proved that it was causative of the accident on the 'but for' test."

The third step cited by Justice Laskin is to see if the municipality has any of three defences available under the Municipal Act. For example, a municipality would not be liable if it could prove it "could not reasonably have been expected" to know about the defect at the time.

The fourth step - if a municipality if found liable - is that the defendant can try to show that the plaintiff's driving contributed to his or her injuries.

"This represents a clarification of the law that I think both the bar and judiciary will be able to use in analyzing cases going forward," said Boggs, whose areas of expertise include auto claims, municipal liability and statutory accident benefits. "It's an extremely well written concise analysis of the law in this area that I think will be very well received by municipalities in terms of clarifying what their obligations are to the driving public."

In Fordam vs Dutton-Dunwich, some witnesses testified that drivers in the area often went through stop signs, including the one near the collision scene, at Willey Road and Erin Line.

"Clearly, it is a local practice in this rural area for drivers do go through stop signs if they consider it safe," Justice Morissette wrote in 2012 when she found Dutton-Dunwich 50% liable for Fordham's injuries. "Ordinary rural drivers do not always stop at stop signs and the defendant knew that. Proper signage was inexpensive at only $800."

But her finding was "unreasonable," Justice Laskin contended, citing a Supreme Court of Canada decision from 1991 - over occupiers' liability - in which the highest court ruled against Marvin and Roberta Malcolm. The Malcolms were sued by Norman Waldick, who injured his head after slipping on ice on property they were renting. The Malcolms argued few residents in their area salted or sanded their laneways.

"No amount of general community compliance will render negligent conduct reasonable in all the circumstances," wrote Mr. Justice Frank Iacobucci of the Supreme Court of Canada in Waldick vs Malcom.

In the case of Fordham vs Dutton-Dunwich, Justice Laskin found that "local practice," in the Dutton area, of driving through stop signs, "nonetheless amounts to negligent driving."

In finding Dutton-Dunwich 50% liable, the lower court "in effect created two categories of drivers: ill-defined ordinary rural drivers who frequently run stop signs, and all other ordinary drivers who habitually obey stop signs," Justice Laskin wrote. "In the trial judge's opinion, a municipality's duty of repair extends to both categories of drivers. This is, as Dutton-Dunwich says in its factum, 'an invitation to traffic chaos.' It is also not the law in this country."

Courtesy: Canadian Underwriter - December 17, 2014

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