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Monday Morning Case Bites for January 11, 2021

Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.

Edited by Tony Slemko Q.C. & Steven Graham

Pace v Economical Mutual Insurance, 2021 ABCA 001
Amendment to Pleadings

Pecanac v Camrose (City), 2021 ABQB 15
Governmental Immunity | Summary Dismissal

Pace v Economical Mutual Insurance, 2021 ABCA 001

The Plaintiff was injured as a passenger in an ATV accident. She commenced a claim for injuries against the driver of the ATV, as well as various treatment providers. Economical Mutual Insurance Company (“Economical”) was the insurer of the ATV driver, and added to the action as a third party by order. Economical defended the claim, and issued notices to co-defendants for contribution and indemnity. When the Plaitniff discontinued the claim against the treatment providers, Economical applied for leave to amend its Statement of Defence to include a pleading of novus actus interveniens and that the treatment providers were responsible for contributing to the Plaintiff’s injuries:

[33]           On May 24, 2019 Economical Mutual reapplied claiming that the amendments “are necessary to … mount a proper defence in light of discontinuances      against the various medical professional Defendants that may have negligently treated      the Plaintiff.”[37]

The Chambers Judge granted leave to Economical to amend its pleading, finding sufficient evidence to support the amendment, and finding that it would cause no serious prejudice to the Plaintiff:

[34]           Justice Jerke, the case management judge, granted Economic Mutual leave to amend its statement of defence.[39]

[35]           The case management judge applied the test for pleading amendment set out in Attila Dogan Construction and Installation Co. v. AMEC Americas Ltd.[40]

[36]           He noted that “Economical has provided some evidence to support the amendment. Medical imaging of Ms. Blackwater’s entire cervical spine was not ordered. Dr. Brosz performed two chiropractic manipulations; during the treatment, she told Dr. Brosz that – ‘there was a flash of electricity that went through me’”.[41]

[37]           The case management judge was convinced that there was no reason to deny Economical Mutual leave to amend.[42]

[38]           He rejected the notion that the amendment introduced a hopeless proposition – that the medical professionals’ negligence exacerbated the appellant’s injuries. The fact that the appellant’s statement of claim alleged negligence on the part of medical professionals completely undermined this argument.[43]

[39]           Justice Jerke also rejected the appellant’s argument that Economical Mutual’s proposed amendment seeks to add a new party or a new cause of action:[44]

[T]he amendment neither adds the medical professionals or anyone else as a party, nor does it actually add any new cause of action. … [T]he amendment adds a new defence, but the amendment is not a claim, for which Economical seeks a remedial order, such as contemplated by the Limitations Act. It is purely a defence which is not a claim for a remedial order. Generally, a defence need not be raised within any particular limitation period.

[40]           The appellant’s argument that the third party by order could have filed a third-party claim against the medical professionals had no traction:[45] “I know of no law which obligates a third party by order, to file a further third party claim instead of a defence with respect to a particular allegation”.

[41]           The case management judge rejected the appellant’s argument that the amendment application evidenced bad faith. Not so said the judge:[46] “Prior to the plaintiff’s discontinuance of the action, against the healthcare professionals, there was no real need for Economical to raise this defence as the defendant had an active claim of indemnity against them. The plaintiff’s discontinuance makes it necessary for Economical to raise the defence as a way of, in effect, advancing the claim of indemnity”.

[42]           The case management judge was clearly aware of the implications of the plaintiff’s decision to discontinue her claims against the medical practitioners and the hospital. But he failed to see how this justified dismissing Economical Mutual’s application:[47] “The fact that the remedy Economical seeks with the defence will affect the plaintiff, rather than the healthcare professionals, does not raise an issue of bad faith. Economical is entitled to consider its own interests. And it was the plaintiff herself who created this possibility by discontinuing the claims”.

[43]           Justice Jerke also dismissed, as without merit, the appellant’s assertion that the proposed amendment will seriously prejudice the appellant’s litigation interests.[48] The appellant complained that the proposed amendment reinstates the complication associated with allocating responsibility for the appellant’s injuries between the driver of the all-terrain vehicle and the medical professionals – a controversy the appellant intended to avoid by discontinuing her claims against the medical professionals. The following passage captures the essence of Justice Jerke’s reasons on this point:[49]

I agree that the proposed amendment will significantly complicate the plaintiff’s claim now, since the … filing of the … various discontinuances. The removal of the healthcare professionals from the proceedings by the discontinuances, left the plaintiff with a far less complex case to advance. Adding the proposed amendment re-engages many of the complexities, although the plaintiff now enjoys the benefit that the onus is now on Economical to prove the defence, not on the plaintiff to prove its claim against the healthcare professionals. But here, the plaintiff chose to discontinue its claim against the healthcare professionals in the face of claims by the defendant to full or partial indemnification from them. There’s no indication Economical consented to the discontinuances occurring.

… Once the claims against the [medical professionals and hospital] defendants were discontinued … the notices to the co-defendants were of no effect. The result is that due to the actions of the plaintiff, Economical, is prejudiced if the amendment is not allowed, because it would be unable to advance any part of the position it took by virtue of the notice to co-defendants.

In conclusion, I do not find that the amendment will cause the plaintiff serious prejudice.

The Court of Appeal confirmed the Rules of Court and case law permit amendments to pleadings unless the non-moving party establishes a compelling case not to:

[49]           The bar for the moving party that needs leave to amend a pleading is very low. In AARC Society v. Canadian Broadcasting Corp.,[58] the Court opined that there is a “presumption in favor of allowing amendments”.

[50]           Amendments are appropriate if they “identify the real issues in dispute”[59] and ensure that within the umbrella of one action “all matters in controversy between the parties can be completely determined”.[60]

[51]           At the same time, courts must be alive to the concern that very late amendments – those sought after questioning has concluded – may delay the resolution of the dispute and engage more public and private resources than is appropriate. “The public interest is promoted by protocols that resolve litigation as quickly as reasonably possible without the expenditure of more public and private resources than is reasonably necessary”.[61]

[52]           Courts, when assessing the merits of very late amendments, must be mindful of the need to be careful stewards of scarce judicial resources and not to sanction processes that unreasonably absorb private resources. Professor Zuckerman, England’s leading academic lawyer in the field of civil procedure, has emphasized this point:[62]

Such an attitude [allowing very late amendments] may have been understandable in the past, when the interests of the administration of justice, the need for economy in the use of litigant and court resources, and the need for expeditious resolution counted for little. But it cannot be maintained in a system governed by the overriding objective.

[53]           A court should allow a party, after the close of pleadings, to amend its pleading unless the nonmoving party can advance a compelling reason not to.[63]

[54]           A compelling reason exists if the amendment would cause the nonmoving party significant prejudice not compensable in costs or by any other order, it advances a hopeless position or is the product of bad faith.[64]

The Court of Appeal ultimately concluded that the Plaintiff/Appellant had not demonstrated that the amendment would cause significant prejudice, advanced a hopeless position, or is the product of bad faith.

The Court of Appeal also rejected the Plaintiff’s position that discontinuing the claim against the treatment providers removes them from consideration:

[64]           We reject the appellant’s vigorous submission that her discontinuance of the actions against the medical professionals forecloses any further consideration of the impact their treatment had on the injuries the appellant claims she has suffered.

[65]           The fact that the plaintiff discontinued her claims against the medical professionals does not make this issue disappear.

[66]           Economical Mutual did not consent to the discontinuances.

[67]           Economical Mutual wishes to have this issue resolved and it is entitled to present it as defence in its statement of defence.

[68]           Had the appellant not discontinued her claims against the medical professionals Economical Mutual would not have needed to apply for permission to amend its defence.

[69]           In reality, any prejudice the appellant may experience as a result of the amendment order is the result of Economical Mutual’s totally predictable response to the appellant’s decision to discontinue her claims against the medical professionals. The prejudice which the appellant claims is completely the result of her own litigation strategy.

[70]           We agree, without reservation, with Justice Jerke’s assessment of the appellant’s position:[67]

Once the claims against the [medical professionals and hospital] defendants were discontinued … the notices to the co-defendants were of no effect. The result is that due to the actions of the plaintiff, Economical is prejudiced if the amendment is not allowed, because it would be unable to advance any part of the position it took by virtue of the notice to co-defendants.

[71]           The amendment is not hopeless. It adopts a position the appellant herself advanced in her statement of claim filed on August 8, 2014. A number of physicians who have examined the appellant and the medical treatment she received after the all-terrain vehicle incident expressed opinions that support the claim that the care the medical professionals provided may have exacerbated the appellant’s injuries.[68]

[72]           There is nothing in this record to support the appellant’s claim that the amendment manifests bad faith on the part of Economical Mutual. The amendment application was the proper and predictable response to the appellant’s decision to discontinue her action against the medical professionals.

As such, the Appeal was dismissed.

Pecanac v Camrose (City), 2021 ABQB 15

The Plaintiff was injured when she stepped on a sideway lane apron and fell. She claimed against the City for negligence. The City defended, relying on s.530 of the Municipal Government Act which provides immunity from liability to municipalities for decisions regarding inspections and maintenance.

[14]           The City relies on section 530 of the Municipal Government Act which it says protects Alberta municipalities from liability arising from their decisions about how and when to conduct maintenance and inspections. Under this section, the City cannot be held liable for damage caused by a system of inspection or maintenance, including the manner in which inspections and maintenance are performed, or the frequency, infrequency, or absence of inspections and maintenance.

[15]           Under this section, the City’s system of winter maintenance for its roads and pedestrian sidewalks is not subject to review by the Court. Consequently, the City cannot be held liable for its decisions to perform winter maintenance only on designated sidewalks, prioritize snow clearing and ice control, and perform winter maintenance on lanes only in circumstances where the lane is deemed “impassable”.

[16]           Further, section 531 (1) of the MGA states that:

A municipality is only liable for an injury to a person or damage to property caused by snow, ice or slush on roads or sidewalks in the municipality if the municipality is grossly negligent.

[17]           Gross negligence is a statutory concept that has been defined by the common law. It is commonly understood as meaning “very great negligence”: Duret v Calgary (City), [1990] AJ No 1052 (QB), “very marked departure from standards by which responsible and competent people typically govern themselves”: Nelson v Grande Prairie (City), 2018 ABQB 537 at para 20 citing McCulloch v Murray, 1942 CanLII 44 (SCC), [1942] SCR 141 or “flagrant or gross dereliction of duty”: Huycke v The Town of Coburg, 1937 CanLII 93 (ON CA), [1937] OR 682 (CA) at page 5.

[18]           It is a high standard to meet.

The Court reviewed the cases cited and concluded the following regarding establishing gross negligence:

[20]           From the survey of the cases, I see these common elements where gross negligence for a slippery walkway is found:

  • first, the danger posed by the hazard is obvious;
  • second, there is a persistent presence of the danger in that it must exist for at least some period of time;
  • third, there is actual or imputed knowledge on the part of the municipality or its employees; and
  • last, even with knowledge, the municipality must have a meaningful opportunity to remedy the situation.

The Court ultimately found that there was no gross negligence or ability for the City to have done anything even if the City knew about the hazard:

[22]           Here, I find that it was not practically possible for the City to have done anything even if the hazard had been so created and the City had known about it. There was simply nothing to be done between the evening of February 16 and the morning of February 17, when City employees are off duty between 5 p.m. and 8 a.m. Hours of work for City employees are also a function of policy, not a choice made every day.

[23]           On the question whether the City, in failing to act when Ms. Pecanac found the sidewalk “impassable” due to icy conditions, I note the following:

  • Ms. Pecanac (or, more accurately, her counsel) uses the word to describe the condition of the sidewalk where it crosses the lane, not the laneway.
  • In the policy, the requirement for remediation relates to an impassable lane, not a sidewalk.
  • While it is true that the policy contains no definition of the word “impassable”, the words and the policy must be read contextually. The heading under which this policy passage appears is “Streets” (notably, not “Sidewalks”). The policy states that the condition of being impassable relates to emergency services plus the general public. In this context, the condition of being impassable must relate to vehicular traffic, such that emergency vehicles such as fire trucks, ambulances and police vehicles can get to where they need to go.

[24]           Finally, on this point, Ms. Pecanac did not find the lane apron slippery or impassable. She found the sidewalk slippery or impassable and therefore chose to step onto the lane apron.

[25]           Under the policy, the City had no obligation to attend to that particular stretch of sidewalk. It certainly had no obligation to attend to that small patch of lane apron that Ms. Pecanac unfortunately chose to step on.

[26]           Moreover, the City’s maintenance records show that no application of discretion occurred, that is, there is no evidence that the City knew about and then chose not to do anything about that patch of ice. Indeed, there is no evidence of any knowledge of the City’s part of any danger. Therefore there was no operational decision or choice made that can now be second-guessed. This is important for two reasons.

[27]           First, the fact that there was no operational choice made is because there was no knowledge, actual or imputed, that could be attributable to the City so as to give rise to an operational choice. Therefore there is no triable case on the issue of gross negligence.

[28]           Second, I accept there is a dichotomy between government policy and government operations but the distinction does not arise here because there was no operational decision. Whatever flux in the law may exist on this point is not relevant in this case.

[29]           In order for there to be a triable issue with regard to gross negligence, there is a need to develop more evidence. The evidence on the record reveals that no decision was made with regard to the accident site, that there were no employees working between 5 p.m. the previous evening and 5:45 a.m. the following morning when the accident occurred, and no suggestion anywhere of roving crews of City employees taking notes of trouble spots and making decisions. The City produced its complete records and there is no mention of anything regarding this laneway or sidewalk on February 16 or 17th. There is no other evidence. The Plaintiff’s case cannot get better.

The Court summarily dismissed the Plaintiff’s claim.