James Ingles
Appellant
v.
The Corporation of the City of Toronto
Respondent
BASTARACHE J. --
I. Introduction
1 The issue to be resolved in
this appeal is the liability of a public authority for breach of its duty of
care in the exercise of a function that it has undertaken pursuant to a policy
decision to that effect.
II. Factual Background
2 The appellant Mr. Ingles
and his wife own an 80-year-old home in Toronto. In 1990, they decided to
renovate the basement of the home, lowering it by18 inches, and to build a patio
at the rear of the house. Lowering the basement would necessitate installing
underpinnings under the existing foundations of the house to keep the walls from
cracking and the house from falling down. They hired a contractor, Tutkaluk
Construction Limited ("Tutkaluk") to do the work. The contract
specified that the contractor would apply for and obtain a building permit and
offered him an extra $500 for doing so. Mr. Ingles knew that a building permit
was required to ensure that an inspection of the renovations would take place.
He wanted such an inspection to ensure that the construction was being done
properly.
3 Tutkaluk informed Mr.
Ingles and his wife that the work would be delayed if it had to obtain a
building permit before starting the renovations. Mr. Ingles reluctantly agreed
that the work should begin as soon as possible, without the permit. Both Mr.
Ingles and his wife asked the contractor several times in the following weeks to
apply for the permit. The respondent, City of Toronto, received and approved the
application for the permit two weeks after construction had begun. At this
point, the underpinning work had already been completed, but the concrete for
the new basement floor had not yet been poured.
4 The respondent added the
following conditions to the permit before approving the application: first, that
the underpinning be carried out to the satisfaction of the building inspector;
second, that the building inspector be notified before proceeding with the
underpinning and pouring of the concrete; and third, that the underpinning be at
least as wide as the existing footings.
5 The morning after the
permit was issued, Mr. Tecson, a building inspector with the city, noticed that
there was construction under way at the Ingles' residence, and that the permit
was not posted. After asking to see the permit, Mr. Tecson began to inspect the
construction. He conducted a 30-minute inspection of the visible portions of the
work. Because the underpinning had already been installed, it was not possible
to determine visually whether the underpinning continued for the full width of
the footing as required by the building permit. It was also not possible to
determine visually the depth of the underpinning. Therefore, the inspector
looked at the colour of the concrete and struck it with a hammer to see if it
had set. It was raining the day of the inspection, and hence it was not possible
to dig a hole next to the underpinning to determine its depth. With respect to
the width of the underpinning, Mr. Tecson relied on Tutkaluk's assurances that
everything was done in accordance with the drawings attached to the building
plan. Mr. Tecson noted on his building card that the underpinning had been done
prior to his inspection. This was contrary to the specifications on the permit,
which required that an inspector be notified before starting the underpinning
work.
6 Approximately two weeks
later, Mr. Grimaldi, the regular building inspector for the area, also visited
the site. By this time, the basement floor had been laid and visual inspection
of the underpinning as a whole was even less possible than it had been at the
time of Mr. Tecson's inspection. Mr. Grimaldi carried out the same inspection as
had Mr. Tecson. In addition he noticed that the concrete was smooth and without
voids, an indication that it had been packed down adequately. On the job card he
wrote that the underpinning appeared to be complete.
7 Within weeks of the
completion of the project, the appellant began to experience flooding in his
basement. He hired another contracting company to remedy the drainage problems.
In the course of their work, the contractors discovered that the initial
underpinning construction was completely inadequate. The underpinning was only 6
inches wide, instead of the 24 inches specified in the permit. In several
places, the underpinning had not been installed to the depth stated in the
plans. In fact, neither the width, nor the depth of the underpinning was in
accordance with the specifications, and neither met the requirements of the Building
Code Act, R.S.O. 1980, c. 51.
III. Judicial History
8 Conant J. of the Ontario
Court (General Division) examined the basic duties and responsibilities for the
regulation and inspection of construction in Ontario as set out in the Building
Code Act ((1994), 24 M.P.L.R. (2d) 293). He found that it was clear from the
statutory provisions that municipalities have a duty to appoint inspectors as
are necessary to enforce the Act. The purpose of conducting inspections before
issuing building permits was to ensure that permits were issued only for those
plans that would conform with the building code. The purpose of conducting
inspections after the permits were issued was to ensure that all construction
was carried out in conformity with the plans. Conant J. concluded that the
province had made a policy decision that cities inspect building plans and
construction, and, as a result, that cities owe a duty of care to all who it is
reasonable to conclude might be injured by the negligent exercise of those
powers.
9 Having found that the city
owed a duty of care to Mr. Ingles, Conant J. proceeded to determine the
appropriate standard of care for a municipal inspector. Following the decision
of La Forest J. in Rothfield
v. Manolakos, [1989] 2 S.C.R. 1259, he found that the city must show
reasonable care in the exercise of its powers of inspection. The standard would
not hold the city to the standard of an insurer, bound to discover every latent
defect in the project and every derogation from the building code requirements.
Instead, the city would be liable for those defects which it could reasonably be
expected to have detected and to have ordered remedied.
10 Conant J. found that the
city failed to meet the standard of care in its inspection of the construction
at Mr. Ingles' home for two reasons. First, he found that it was not reasonable
for Mr. Tecson to rely on Tutkaluk's assurance that the construction met the
specifications. Mr. Tecson should have been wary of the contractor's assurances
for the following reasons: the contractor did not apply for the permit until
after the underpinning had been put in; the contractor did not give notice as to
the status of the project, despite the requirements on the building permit; the
permit was not posted outside the home; and Mr. Tecson did not know the
contractor or his work. Second, he found that a more thorough inspection was
reasonable because the underpinning was a major structural element. A defect in
that element could lead to a collapse of the entire house. Conant J. concluded
that the inspector could have used his investigatory powers to determine the
width and depth of the underpinnings and was negligent in failing to do so.
11 As for the appellant's
negligence, Conant J. found that he knew, or should have known, what he was
doing in agreeing to a delay in obtaining a building permit. As such, he was
required to bear some of the responsibility for the damage. However, Conant J.
also found that the appellant and his wife did not participate in a conscious
effort to prevent the building inspector from examining the underpinnings. They
were not disentitled from recovering against the city, which failed to discharge
its obligations. Tutkaluk was found 80 percent liable for the damage and the
city was found to be 20 percent liable. The city's liability was reduced by a
further 30 percent to account for the appellant's contributory negligence.
12 In a subsequent addendum
to the original judgment ((1995), 24 M.P.L.R. (2d) 308), Conant J. clarified the
apportionment of liability as between the co-defendants, and the effect of the
reduction on the award against the respondent city. He found that the respondent
and the contractor were jointly and severally liable for the damages. The net
effect of this finding was that the $52,520 in damages was apportioned 6 percent
to the appellant, 14 percent to the city and 80 percent to Tutkaluk, with a
judgment against both the city and Tutkaluk for $49,368.80 representing 94
percent of the damages. In a second addendum, he also awarded prejudgment
interest fixed at the statutory rate of 12.9 percent.
13 Sharpe J. (ad hoc),
writing for the Ontario Court of Appeal, allowed the appeal, solely on the
ground that the trial judge erred in failing to address whether the appellant
had removed himself from the scope of the city's duty of care: (1998), 38 O.R.
(3d) 384.
14 Sharpe J. applied the
test set out in Kamloops (City of ) v. Nielsen, [1984] 2 S.C.R. 2, and
agreed with the trial judge that the city had made a policy decision to inspect
building plans and construction, and thus that it owed a duty of care to any
person reasonably within its contemplation as someone to be injured by a breach
of its duty. Sharpe J. then proceeded to apply the two-step analysis of the duty
of care as set out in Kamloops v. Nielsen. Namely, he asked whether the
city was in a relationship of proximity with the appellant such that it could
contemplate that carelessness in its inspection would harm the appellant.
Second, he asked whether there were any policy considerations which would negate
the duty in these circumstances.
15 Sharpe J. answered both
questions in the affirmative. Although there was a relationship of proximity
between the city and the appellant, the Court of Appeal also found that there
were considerations that removed the appellant from the class of persons to whom
the city owed a duty of care. Sharpe J. based this finding on the remarks of
La Forest J. in Rothfield v. Manolakos, supra, followed in Hospitality
Investments Ltd. v. Lord (Everett) Building Construction Ltd. (1993), 143
N.B.R. (2d) 258 (Q.B.), to the effect that an owner-builder could exclude
himself from the municipality's duty of care when he knowingly flouted the
applicable building regulations. In his view, the appellant "[went] along
with Tutkaluk's scheme" to proceed with the underpinning work without a
permit. The appellant knew that this would preclude inspections while the
underpinning work was being done and that it would make the inspection much more
difficult afterwards. In the opinion of the Court of Appeal, this course of
action was simply incompatible with the appellant attempting to recover from the
city.
IV. Analysis
A. Duty of Care
16 This Court recently
affirmed in Ryan
v. Victoria (City), [1999] 1 S.C.R. 201, that the test set in Anns v.
Merton London Borough Council, [1977] 2 All E.R. 492 (H.L.), adopted by this
Court in Kamloops v. Nielsen (the "Anns/Kamloops" test)
is the appropriate test for determining whether a private or public actor owes a
duty of care. These cases provide the basis for determining whether the law can
impose on a public authority a private law duty towards individuals, enabling
individuals to sue the authority in a civil suit, and for determining whether a
duty of care is owed by a public authority in particular circumstances. To
determine whether a private law duty of care exists, two questions must be
asked. These questions are set out by Wilson J. at pp. 10-11 of the decision in Kamloops
v. Nielsen as follows:
(1)is there a sufficiently close relationship
between the parties (the local authority and the person who has suffered the
damage) so that, in the reasonable contemplation of the authority, carelessness
on its part might cause damage to that person? If so,
(2)are there any considerations which ought to
negative or limit (a) the scope of the duty and (b) the class of persons to whom
it is owed or (c) the damages to which a breach of it may give rise?
17 The first step of the Anns/Kamloops
test presents a relatively low threshold. A prima facie duty of care will
be established if it can be shown that a relationship of proximity existed
between the parties such that it was reasonably foreseeable that carelessness on
the part of the public actor would result in injury to the other party; see, for
example, Ryan v. Victoria, supra, at para. 22. However, as Lord
Wilberforce recognized in Anns, only in certain circumstances will a
public authority owe a private law duty of care towards individuals. Thus, under
the second step of the test, the court must examine the legislation which
governs the public authority to determine whether a private law duty should be
imposed in the circumstances. Wilson J. summarized the types of legislation
identified by Lord Wilberforce, at p. 11 of Kamloops v. Nielsen, supra,
as follows:
(1) statutes conferring powers to interfere with the rights of individuals in
which case an action in respect of damage caused by the exercise of such powers
will generally not lie except in the case where the local authority has done
what the legislature authorized but has done it negligently;
(2) statutes conferring powers but leaving the
scale on which they are to be exercised to the discretion of the local
authority. Here there will be an option to the local authority whether or not to
do the thing authorized but, if it elects to do it and does it negligently, then
the policy decision having been made, there is a duty at the operational level
to use due care in giving effect to it.
18 Inspection schemes fall
within the second type of legislation identified by Lord Wilberforce. To
determine whether an inspection scheme by a local authority will be subject to a
private law duty of care, the court must determine whether the scheme represents
a policy decision on the part of the authority, or whether it represents the
implementation of a policy decision, at the operational level. True policy
decisions are exempt from civil liability to ensure that governments are not
restricted in making decisions based upon political or economic factors. It is
clear, however, that once a government agency makes a policy decision to
inspect, in certain circumstances, it owes a duty of care to all who may be
injured by the negligent implementation of that policy; see, for example, Just
v. British Columbia, [1989] 2 S.C.R. 1228, at p. 1243, per Cory
J.; Rothfield v. Manolakos, supra, at p. 1266, per
La Forest J.
19 While I have stated above
that a government agency will not be liable for those decisions made at the
policy level, I must emphasize that, where inspection is provided for by
statute, a government agency cannot immunize itself from liability by simply
making a policy decision never to inspect. The decisions in Anns v. Merton
London Borough Council, supra, and Kamloops v. Nielsen, supra,
establish that in reaching a policy decision pertaining to inspection, the
government agency must act in a reasonable manner which constitutes a bona
fide exercise of discretion. In the context of a municipal inspection
scheme, we must bear in mind that municipalities are creatures of statute which
have clear responsibilities for health and safety in their area. A policy
decision as to whether or not to inspect must accord with this statutory
purpose; see, for example, Kamloops v. Nielsen, at p. 10.
20 Once it is determined
that an inspection has occurred at the operational level, and thus that the
public actor owes a duty of care to all who might be injured by a negligent
inspection, a traditional negligence analysis will be applied. To avoid
liability, the government agency must exercise the standard of care in its
inspection that would be expected of an ordinary, reasonable and prudent person
in the same circumstances. Recently, in Ryan v. Victoria, supra,
at para. 28, Major J. reaffirmed that the measure of what is reasonable in the
circumstances will depend on a variety of factors, including the likelihood of a
known or foreseeable harm, the gravity of that harm and the burden or cost which
would be incurred to prevent the injury. The same standard of care applies to a
municipality which conducts an inspection of a construction project. While the
municipal inspector will not be expected to discover every latent defect in a
project, or every derogation from the building code standards, it will be liable
for those defects that it could reasonably be expected to have detected and to
have ordered remedied; see, for example, Rothfield v. Manolakos, supra,
at pp. 1268-69.
(1) Did the City Owe the Appellant a Duty of
Care?
21 Both the trial judge and
the Court of Appeal found that the city owed the appellant a prima facie
duty of care in these circumstances. I agree with their finding in this respect.
It is certainly foreseeable that a deficient inspection of the underpinnings of
a home could result in damage to the property of the homeowners, or injury to
the homeowners or others. As a result, I agree that there was a sufficient
relationship of proximity between the appellant and the city such that the city
owed the appellant a prima facie duty to conduct an inspection of the
renovations of the appellant's home and to do so with reasonable care. The first
stage of the Anns/Kamloops test has been met.
22 Having found that the
city owed the appellant a prima facie duty of care, I now turn to the
legislative scheme which governs municipal inspections in Ontario to determine
whether there is any policy reason to limit the prima facie duty of care.
The relevant provisions of the Building Code Act, R.S.O. 1990, c. B.13,
are as follows:
3.--(1) The council of each municipality
is responsible for the enforcement of this Act in the municipality.
(2) The council of each municipality shall
appoint a chief building official and such inspectors as are necessary for the
purposes of the enforcement of this Act in the areas in which the municipality
has jurisdiction.
5.--(1) No person shall construct or
demolish or cause to be constructed or demolished a building in a municipality
unless a permit has been issued therefor by the chief official.
6.--(1) The chief official shall issue a
permit except where,
(a) the proposed building or the proposed
construction or demolition will not comply with this Act or the building code or
will contravene any other applicable law;
. . .
(3) No person shall make a material change or
cause a material change to be made to a plan, specification, document or other
information on the basis of which a permit was issued without notifying the
chief official and filing details of such change with him or her for the purpose
of obtaining his or her authorization.
. . .
(5) No person shall construct or cause to be
constructed a building in a municipality except in accordance with the plans,
specifications, documents and any other information on the basis of which a
permit was issued or any changes thereto authorized by the chief official.
8.--(1) Subject to section 11, an
inspector may, for the purpose of inspecting a building or site in respect of
which a permit is issued or an application for a permit is made, enter in or
upon any land or premises at any time without a warrant.
(2) Where an inspector finds that any provision
of this Act or the building code is being contravened, the inspector may give to
the person whom he or she believes to be the contravener an order in writing
directing compliance with such provision and may require the order to be carried
out forthwith or within such time as he or she specifies.
(3) Where an inspector gives an order under
this section, the order shall contain sufficient information to specify the
nature of the contravention and its location.
. . .
(5) Where an order of an inspector made under
this section is not complied with within the time specified therein, or where no
time is specified, within a reasonable time in the circumstances, the chief
official may order that all or any part of the construction or demolition
respecting the building cease and such order shall be served on such persons
affected thereby as the chief official specifies and a copy thereof shall be
posted on the site of the construction or demolition and no person except an
inspector or the chief official shall remove such copy unless authorized by an
inspector or the chief official.
(6) Where an order to cease construction or
demolition is made under subsection (5), no person shall perform any act in the
construction or demolition of the building in respect of which the order is made
other than such work as is necessary to carry out the order of the inspector
made under subsection (2).
9.--(1) An inspector or chief official
may issue an order prohibiting the covering or enclosing of any part of a
building pending inspection and where such an order is issued, an inspection
shall be made within a reasonable time after notice is given by the person to
whom the order is issued that the person is ready for the inspection.
(2) Where a chief official has reason to
believe that any part of a building has not been constructed in compliance with
this Act and such part has been covered or enclosed, contrary to an order made
by an inspector or chief official under subsection (1), the chief official may
order any person responsible for the construction to uncover the part at the
person's own expense for the purpose of an inspection.
10.--(1) Subject to section 11, an
inspector may enter in or upon any land or premises at any time without a
warrant for the purpose of inspecting any building to determine whether such
building is unsafe.
(2) Where an inspector finds that a building is unsafe, he or she may serve upon
the assessed owner and each person apparently in possession of the building an
order in writing setting out the reasons why the building is unsafe and the
remedial steps that the inspector requires to be taken to render the building
safe and may require the order to be carried out within such time as the
inspector specifies in the order.
(3) Where an order of an inspector under
subsection (2) is not complied with within the time specified therein, or where
no time is specified, within a reasonable time in the circumstances, the chief
official may by order prohibit the use or occupancy of the building and such
order shall be served on the assessed owner and each person apparently in
possession and such other persons affected thereby as the chief official
specifies and a copy thereof shall be posted on the building, and no person
except an inspector or the chief official shall remove such copy unless
authorized by an inspector or the chief official.
(4) Where the chief official has made an order
under subsection (2) and considers it necessary for the safety of the public,
the chief official may cause the building to be renovated, repaired or
demolished for the purpose of removing the unsafe condition or take such other
action as he or she considers necessary for the protection of the public and,
where the building is in a municipality, the cost of the renovation, repair,
demolition or other action may be added by the clerk to the collector's roll and
collected in like manner as municipal taxes.
11.--(1) For the purposes of an
inspection under section 8 or 10, the inspector may,
(a) require the production of the drawings and
specifications of a building or any part thereof, including any drawings
prescribed by the regulations, for his or her inspection and may require
information from any person concerning any matter related to a building or part
thereof;
(b) be accompanied by any person who has
special or expert knowledge of any matter in relation to a building or part
thereof;
(c) alone or in conjunction with such other
person or persons possessing special or expert knowledge, make such
examinations, tests, inquiries, or, subject to subsections (2) and (3), take
such samples or photographs as are necessary for the purposes of the inspection;
(d) order any person responsible for the
construction to take and supply at the person's own expense such tests and
samples as are specified in the order.
23 The legislative scheme
is designed to ensure that uniform standards of construction safety are imposed
and enforced by the municipalities. Sections 5 and 6 of the Act require that
building plans and specifications be inspected before a permit is issued to
ensure that they conform with the building code. Sections 8 to 11 set out the
powers of the inspector to ensure that all work that is being completed conforms
with the permit and, as a result, with the building code. Inspectors are given a
broad range of powers to enforce the safety standards set out in the code, from
ordering tests at the owners' expense, to ordering that all work cease in
general. Section 9 grants inspectors the power to order builders not to cover
work pending inspection, or to uncover work when there is reason to believe that
any part of the building has not been constructed in compliance with the Act.
The purpose of the building inspection scheme is clear from these provisions: to
protect the health and safety of the public by enforcing safety standards for
all construction projects. The province has made the policy decision that the
municipalities appoint inspectors who will inspect construction projects and
enforce the provisions of the Act. Therefore, municipalities owe a duty of care
to all who it is reasonable to conclude might be injured by the negligent
exercise of their inspection powers.
24 It would appear from the
use of the word "may" in ss. 8 to 11 that municipalities have the
discretion under the Act to decide whether to inspect and enforce the safety
standards after construction has begun. Therefore, it may be open to the
municipalities to make policy decisions as to whether to inspect in certain
circumstances. Of course, all such policy decisions must be made in good faith
and in a way that is consistent with the overall purpose of ensuring the health
and safety of the public. Such decisions can only be immune from civil action
when they accord with the overall purpose of the statutory scheme. Here, the
evidence is that the city had made a policy decision to inspect construction,
even if the permit was issued after the construction had begun. At trial, Fred
Breeze, the city's Director of Inspections, testified as follows:
Q. Well, if the inspector is not in the
position to do proper inspection because of the lateness of the building permit,
can you tell me why the city doesn't simply refuse to do such inspections and
insist that the owner get an inspection from an independent engineer, for
instance?
A. Well, that's not our policy. Our policy
is to inspect once a permit has been issued, and we will inspect to the best the
inspector can do at the time on what they can see while they are there.
[Emphasis added.]
This policy has since been codified in the Building
Code Act, 1992, S.O. 1992, c. 23, s. 13(6), which grants powers to the chief
building official to order work to be uncovered when notice to inspect is not
given in a timely fashion. While the Act gave the city the discretion to decide
when to inspect, the city made a policy decision to inspect even when a permit
was received late. Once the city chose to implement this decision, and exercised
its power to enter upon the premises to inspect the renovations at Mr. Ingles'
home, it owed a duty of care to all who it is reasonable to conclude might be
injured by the negligent exercise of that power.
25 Following the Anns/Kamloops
test, the city owed Mr. Ingles a duty of care to conduct an inspection of the
renovations on their home and to exercise reasonable care in doing so, despite
the fact that the building permit was obtained late. Therefore, the city could
be found negligent if it ignored its own scheme and chose not to inspect the
renovations. It could also be found negligent for conducting an inspection of
the renovations without adequate care.
(2) The Negligent Owner-Builder
26 The Ontario Court of
Appeal found that, despite the fact that the inspection scheme was operational,
there were considerations that removed the appellant from the class of persons
to whom the city owed a duty of care. Relying on the decision of La Forest
J. in Rothfield v. Manolakos, supra, the court found that
owner-builders could be excluded from the ambit of a municipality's duty of care
regarding building inspections if they are seen as the sole source of their
loss. After reviewing the appellant's negligence, the Ontario Court of Appeal
concluded that the appellant had knowingly flouted the building code by agreeing
with Tutkaluk's scheme to apply for the permit late. In doing so, the court
found, the appellant removed himself from the ordinary inspection scheme and
from the scope of the city's duty of care.
27 With respect, the
Ontario Court of Appeal erred in its interpretation of the meaning of the
decision in Rothfield v. Manolakos. While there may be some ambiguity in
the language of that decision, Rothfield v. Manolakos stands for the
proposition that an owner's negligence may, in very rare circumstances, be
considered as a complete defence to a finding of negligence on the part of
municipal inspectors. The decision does not stand for the proposition that an
owner's negligence can remove him or her from the scope of a municipality's duty
of care.
28 The facts of the case of
Rothfield v. Manolakos were quite similar to the facts of the case at
bar. The plaintiffs were owners of a home who hired contractors to build a
retaining wall in their backyard. The contractors applied for a building permit
and presented the building inspector with a rough sketch of the project. The
inspector exercised his discretion and granted a permit despite the fact that
the plans had not been certified by an engineer. Neither the owners, nor the
contractors, advised the city, as required by the by-law, that the project had
come to a stage where inspection was required. When the inspector did come to
inspect the construction, most of the wall had been put in place and it was not
possible to conduct a standard inspection.
29 La Forest J., for
the majority of the Court, began his analysis of facts by applying the Anns/Kamloops
test. After examining the legislative scheme, he found that once the city had
made a policy decision to inspect building plans and construction, it owed a
duty of care to all who it is reasonable to conclude might be injured by the
negligent exercise of those powers. He then proceeded to consider whether
owner-builders, as a class, should be excluded from the scope of a
municipality's duty of care under the second portion of the Anns/Kamloops
test. He could see no reason why an owner-builder would not fall within the
scope of the duty of care owed by a municipality. Owner-builders are no better
versed in the technical aspects of building construction than other members of
the public, and cannot see to it that their contractors comply with the building
codes. Owner-builders thus rely on the disinterested expertise of building
inspectors to ensure that construction work is safe. In addition, La Forest
J. found that owner-builders are also ratepayers in the municipality, members of
the public for whose benefit the by-law was passed. Therefore, it is clear that
La Forest J. decided that owner-builders are a class of persons to whom a
duty is owed by municipal inspectors.
30 Having decided that
municipal inspectors owe a duty of care to owner-builders, La Forest J.
proceeded to discuss the implications of the owner-builder's negligence. He
considered the dictum of Lord Wilberforce in Anns v. Merton London
Borough Council, supra, that no duty is owed "to a negligent
building owner, the source of his own loss"; see Rothfield v. Manolakos,
supra, at p. 1271. La Forest J. found that this principle was
applicable only in the narrowest of circumstances. At p. 1271, he states:
It is to be expected that contractors, in the
normal course of events, will fail to observe certain aspects of the building
by-laws. That is why municipalities employ building inspectors. Their role is to
detect such negligent omissions before they translate into dangers to health and
safety. If, as I believe, owner builders are within the ambit of the duty of
care owed by the building inspector, it would simply make no sense to proceed on
the assumption that every negligent act of an owner builder relieved the
municipality of its duty to show reasonable care in approving building plans and
inspecting construction.
Negligent owners would be viewed as the sole
source of their own loss where they, for example, knowingly flouted the
applicable building regulations or the directives of the municipality, or
totally failed to acquit themselves of the responsibilities that properly rested
on them, none of which apply in this appeal. La Forest J. concluded that
the conduct of the plaintiffs in Rothfield v. Manolakos, supra,
was not such as to make them the sole source of their own loss.
31 There is some ambiguity
in the decision in Rothfield v. Manolakos as to where in the traditional
tort law analysis the consideration of an owner-builder's negligence should take
place, namely whether the analysis should take place in the determination of
whether a municipality owes a duty of care to the negligent owner-builder, or
whether the negligence of an owner-builder can serve as a defence to a finding
of negligence on the part of a municipal inspector. This ambiguity stems from
the fact that La Forest J. began his analysis of the consequences of the
negligence of an owner-builder by quoting the dictum of Lord Wilberforce
in Anns v. Merton London Borough Council, supra. At p. 504, Lord
Wilberforce states:
To whom the duty is owed. There is, in
my opinion, no difficulty about this. A reasonable man in the position of the
inspector must realise that if the foundations are covered in without adequate
depth or strength as required by the byelaws, injury to safety or health may be
suffered by owners or occupiers of the house. The duty is owed to them, not of
course to a negligent building owner, the source of his own loss.
Lord Wilberforce's dictum does imply
that an examination of the negligence of an owner-builder will take place within
the two-step analysis of whether a duty of care is owed by a municipality in
conducting an inspection. As a result, the analysis of the consequences of the
negligence of an owner-builder in Rothfield v. Manolakos, supra,
also uses language which implies that the inquiry into whether a municipality is
liable for its negligent inspection will end at the duty stage of the analysis
if the plaintiff's conduct is found to be such as to make him or her the sole
source of his or her own loss. Upon further examination, however, it is my view
that the true intention of the decision in Rothfield v. Manolakos was to
create a defence available to municipalities in a very limited set of
circumstances.
32 There are several
passages in the reasons of La Forest J. in Rothfield v. Manolakos
which make it clear that the negligent conduct of an owner-builder should not
absolve a municipality of its duty to take reasonable care in its inspection.
For example, at p. 1273, he states:
It cannot be disputed that the owners were
negligent in failing to give timely notice for the pre-pour inspection. The
by-law places this obligation squarely on every property owner. But the fact
remains that when the inspector did attend at the site he was confronted with a
situation in which it must have been at once clear to him that the retaining
wall was potentially substandard. As I have just pointed out, there is no
mystery to the fact that uninspected foundations may give rise to hidden
defects.
Again, at p. 1274, he states:
. . . when he attended at the site,
[the inspector] was confronted with a situation which, if left unremedied,
manifestly stood to pose a threat to the health and safety of the public,
including the neighbours and the owner builder. Of course, the cause of the
problem would have been evident if the inspector had been asked to come at the
proper time. But this does not absolve the inspector of his duties. It must be
remembered that the inspector was, at the time, armed with all the powers
necessary to remedy the situation. As I see the matter, it was incumbent on the
building inspector, in view of the responsibility that rested on him, to order
the cessation of the work, and the taking of whatever corrective measures were
necessary to enable him to ensure that the structure was up to standard.
In light of these two passages, it is apparent that an inspector who attends at
a site owes a duty of care to the public, to third-party neighbours, and to
owner-builders to ensure that all renovation and construction projects meet the
standards set out in the by-laws. This duty arises regardless of the conduct or
negligence of the owner-builder.
33 Having found that a
municipality whose inspector conducts a site inspection owes a duty to conduct a
reasonable inspection, despite the negligence of the owner-builder,
La Forest J. proceeds to set out a defence that may be available to
municipalities in limited circumstances. He underlines that it may be open to a
municipality to argue in its defence that an owner-builder's conduct was such
that it was impossible to fulfill the duty to take reasonable care in its
inspection. He sets out the test as follows, at pp. 1273-74:
The key question, it seems to me, is whether it
is reasonable to conclude that despite the negligence of the owners, the
inspector was still in a position to acquit himself of the responsibility that
the by-law placed on him, i.e., to take reasonable care to ensure that all
building was done in accordance with the applicable standards of the by-law. In
other words, is it reasonable, in the circumstances, to conclude that a due
exercise by the inspector of his powers, even though he was summoned late, could
have avoided the danger?
The test assumes that inspectors owe a duty to
take reasonable care to ensure that all construction is done in accordance with
the standards. A municipality will only be absolved completely of the liability
which flows from an inspection which does not meet the standard of reasonable
care when the conduct of the owner-builder is such as to make it impossible for
the inspector to do anything to avoid the danger. In such circumstances, for
example when an owner-builder determines to flout the building by-law, or is
completely indifferent to the responsibilities that the by-law places on him or
her, that owner-builder cannot reasonably allege that any damage suffered is the
result of the failure of the building inspector to take reasonable care in
conducting an inspection.
34 La Forest J.'s
interpretation of Lord Wilberforce's dictum in Anns v. Merton London
Borough Council, supra, is consistent with the interpretation
provided by the English Court of Appeal. In Acrecrest Ltd. v. Hattrell &
Partners, [1983] 1 All E.R. 17, Donaldson L.J. found that the principle does
not exclude negligent builder-owners from the ambit of a municipality's duty of
care, but rather that it serves as a defence. He interprets the Lord
Wilberforce's dictum as follows, at p. 31:
. . . the local authority's duty of
care extends to the building owner and the builder-owner to the same extent as
to future owners and present and future occupiers. The difference in the
position of the building owner or builder-owner is not in the ambit of the duty,
but in the fact that they may have more difficulty in proving a causal
connection between the damage and the building inspector's negligence and may
also be faced with allegations of contributory negligence which may partially or
even wholly defeat their claim. This, I think, is what Lord Wilberforce meant
when in the Anns case . . . he said:
"The duty is owed to them [the owners or
occupiers of the house], not of course to the negligent building owner, the
source of his own loss."
If the building owner's negligence was the
effective source of his loss, he would fail on the ground that there was a break
in the chain of causation or on the ground that it was just and equitable that
the damages recoverable should be reduced to nothing, having regard to the
building owner's share in the responsibility for the damage. . . .
Clearly, the English Court of Appeal
interpreted Lord Wilberforce's dictum as a defence to a claim of
negligence on the part of an owner-builder who was the sole source of his or her
own loss. Such a defence could be invoked, either to show that the negligence of
an inspector could not in any way be the cause of the owner-builder's loss, or
as a complete bar to recovery for the owner-builder's contributory negligence.
35 La Forest J.'s
interpretation of Lord Wilberforce's dictum as a defence to a finding of
negligence against a municipality, rather than as a principle which excludes a
class of negligent builder-owners from the scope of a municipality's duty of
care, is also consistent with this Court's approach to other defences in tort
law which focus on the plaintiff's conduct. In the context of the defence of ex
turpi causa non oritur actio, this Court has ruled that it is inappropriate
to consider the effect of the conduct of a plaintiff within the duty of care
analysis. In Hall
v. Hebert, [1993] 2 S.C.R. 159, McLachlin J., for the majority of the
Court, found that it is inconsistent with the conceptual role of the duty of
care within the traditional tort law analysis to consider the plaintiff's
conduct as a consideration which can remove him or her from the scope of a duty
which would otherwise be owed to him or her. She found that a duty of care
should be grounded in considerations of proximity and foreseeability. The
legality or morality of the plaintiff's conduct is an extrinsic consideration.
As such, she found, in those cases where the conduct of the plaintiff does
become an issue to be considered, it should be done by way of a defence, rather
than by distorting the notion of the duty of care owed by the defendant to the
plaintiff; see Hall v. Hebert, supra, at p. 182. It would be
inconsistent with this Court's jurisprudence to develop an area of negligence
law where the conduct of the plaintiff is determinative of whether he or she is
owed a duty of care when this Court has specifically pronounced that a
plaintiff's conduct may not be considered in determining whether a duty of care
is owed to him or her in other areas of negligence law.
36 The respondent city argues
that to interpret the decision of La Forest J. in Rothfield v. Manolakos,
supra, as setting out the parameters for a defence to a claim of
negligence by a negligent owner-builder against a municipality would necessitate
overruling this Court's decision in Hospitality
Investments Ltd. v. Everett Lord Building Construction Ltd., [1996] 3 S.C.R.
605. This decision consists of one paragraph which restores the judgment of
the New Brunswick Court of Queen's Bench at (1993), 143 N.B.R. (2d) 258, and is
set out, at p. 606, as follows:
We agree with the trial judge that no duty of
care was owed to the respondent in the circumstances of this case. Accordingly,
the appeal is allowed, the judgment of the Court of Appeal (1995), 166 N.B.R.
(2d) 241, is reversed, and the trial judgment (1993), 143 N.B.R. (2d) 258, is
restored, the whole with costs throughout.
This decision does appear to contradict the
decision in Rothfield v. Manolakos, supra, as it seems to exempt
the municipality from liability at the first stage of the negligence analysis.
However, the Court did not adopt the reasons of the trial judge in the case and
wrote only one sentence in disposing of the appeal. To the extent that the
decision can be read as departing from the analysis of Rothfield v. Manolakos,
it should not be followed.
37 The respondent city also
relies on the decision of the British Columbia Court of Appeal in McCrea v.
White Rock, [1975] 2 W.W.R. 593, to support its contention that a duty of
care is not owed to the appellant in the case at bar. That case is also
distinguishable from the case at bar. In that case, the plaintiffs had hired a
contractor to renovate their grocery store. The contractor applied for and
received a building permit on the basis of a plan which he submitted to the
inspector. He did not, however, follow the plan when installing a beam into the
renovations and eventually the building collapsed. The by-law which governed
inspections in the City of White Rock provided for a scheme of inspections to
occur at various stages of the construction. A duty was placed on the owners of
the building to notify the inspector at various stages of the construction to
receive inspections. The city had made a policy decision not to inspect until
notified of the need for an inspection. The contractor called the inspector on
behalf of the owners, and received three inspections pursuant to the by-law.
There was evidence that the practice in White Rock was for the contractor to
call for inspections on behalf of the owner. No further calls for inspection
were made and as a result the inspector did not inspect the beam and did not
conduct any further inspections of the site.
38 While three separate and
concurring sets of reasons were delivered in that case, all three of the judges
of the British Columbia Court of Appeal agreed that the by-law imposed a duty to
inspect the construction only when the inspector was notified by the owners that
the construction had reached one of the stages where inspection was required by
by-law. A municipal inspector could not be expected to attend at a site
continuously to ensure that the construction met the specifications in the
permit. Since the owners had failed to notify the inspector of the need to
inspect the work, the inspector owed no duty to them. Two of the sets of reasons
were careful to distinguish the case from those cases where inspectors had
attended at construction cites and been negligent in conducting their
inspections. This case is distinguishable from the case at bar, where the owners
did notify the inspector of a need to inspect, and the inspector did attend at
the site to conduct the inspection.
39 To summarize, despite
some ambiguity in the language used in his decision, it is clear that
La Forest J. created a complete defence for municipalities that could be
used to militate against a finding of negligence only in the rarest of
circumstances, namely, when the owner-builder's conduct was such that a court
could only conclude that he or she was the sole source of his or her own loss.
This complete defence may encompass those situations where an owner-builder
never applies for a building permit, or never notifies the inspector of the need
for an inspection, or those situations where the inspector receives notification
so late that it would be impossible, upon full exercise of the powers granted
under the governing legislation, to discover any hidden defects. In other cases,
such as Rothfield v. Manolakos, supra, itself, it will still be
open to municipalities to show that a plaintiff was contributorily negligent,
and to seek an apportionment of the damages accordingly. It is also clear that
once a municipality chooses to implement a policy decision to inspect, it owes a
duty to all who might be injured by the negligent exercise of those powers,
including builder-owners, to take reasonable care in conducting that inspection.
As a result, I must disagree with the findings of the Ontario Court of Appeal in
this case. The city owed a duty to the appellant to conduct a reasonable
inspection of the renovations to his home.
B. Standard of Care
40 As I have stated above,
to avoid liability the city must show that its inspectors exercised the standard
of care that would be expected of an ordinary, reasonable and prudent inspector
in the same circumstances. The measure of what constitutes a reasonable
inspection will vary depending on the facts of each case, including the
likelihood of a known or foreseeable harm, the gravity of that harm, and the
burden or cost which would be incurred to prevent the injury; see, for example, Ryan
v. Victoria, supra, at para. 28. For example, a more thorough
inspection may be required once an inspector is put on notice of the possibility
that a construction project may be defective. In addition, a municipal inspector
may be required to exercise greater care when the work being inspected is
integral to the structure of the house and could result in serious harm if it is
defective. While in some circumstances a more thorough inspection will be
required to meet the standard of care, municipalities will not be held to a
standard where they are required to act as insurers for the renovation work. The
city was not required to discover every latent defect in the renovations at the
appellant's home. It was, however, required to conduct a reasonable inspection
in light of all of the circumstances; see, for example, Rothfield v.
Manolakos, supra, at pp. 1268-69.
41 The inspection scheme
set out in the 1990 Building Code Act delineates the powers that are
available to municipal inspectors to discover defects in a construction project.
The city can only be held liable for those defects which the municipal inspector
could reasonably be expected to have detected and had the power to have
remedied.
42 I turn now to the
inspection that took place at the appellant's home. In examining whether the
inspection was reasonable in the circumstances, we must bear in mind that the
determination of whether a defendant has met the standard of care required in
the circumstances is a question of fact. While it is open to an appeal court to
find that a trial judge applied the wrong standard of care, once it is
determined that he or she applied the correct standard, an appeal court can
reverse a trial judge's findings with respect to whether that standard was met
by the defendant only if it can be established that he or she made some palpable
and overriding error which affected the assessment of the facts; see, for
example, Ryan v. Victoria, supra, at para. 57; Stein v. The
Ship "Kathy K", [1976] 2 S.C.R. 802, at p. 808.
43 After conducting a
thorough examination of the facts in this case, Conant J. concluded that the
city's inspection fell short of meeting a reasonable standard in the
circumstances. He accepted the appellant's submission that the behaviour of the
contractor should have made the inspector wary. The contractor did not apply for
the building permit until after the underpinning had been put in. The contractor
had ignored the instructions in the permit, which specified that the inspector
was to be notified before proceeding with the underpinning. The contractor had
also failed to post the permit outside the appellant's home. Mr. Tecson
testified that he did not know the contractor and had no basis for relying on
him. The trial judge concluded that, given these circumstances, it would have
been reasonable to inspect further. It was simply insufficient for the inspector
to rely on the contractor's assurances that the work, which was not readily
visible, had been completed according to the specifications. Indeed, it has been
recognized by this Court that it is to be expected that contractors, in the
normal course of events, will fail to observe certain aspects of the building
by-laws. It is for this reason that municipalities employ building inspectors;
see, for example, Rothfield v. Manolakos, supra, at p. 1271. It
is, therefore, unreasonable for an inspector to conclude that a project has met
the standards in the building code simply because the contractor has said so.
Such a conclusion is especially unreasonable when the inspector has been put on
notice of the contractor's willingness to contravene the instructions in the
building permit.
44 Conant J. also found
that a more thorough inspection was reasonable in this case because of the
nature of the work that was being carried out. He found that the risk of harm
was great, requiring a higher standard of care. The construction work consisted
of the installation of underpinning, which was to bear the weight of the entire
house. It was a major structural element, and a serious defect in its
construction could have led to the collapse of the entire house. While the tests
conducted by the inspector could help to ascertain the quality of the materials
used, they could not help to ascertain whether the dimensions of the
underpinning were in accordance with the plan. Given the importance of the
underpinning to the safety of the entire house, verification that its
construction met the specifications of the plan was necessary.
45 The city argued that the
inspector lacked the power to do anything further than the inspection that he
conducted. The underpinning had been laid before his arrival and it was
impossible to determine visually whether it continued for the full width of the
footing. The basement was dug up for the laying of the drains, and only a few
inches of the depth of the underpinning were visible because of the piles of
dirt from the excavation. The city argued that the powers of the building
inspector to uncover work were limited. Section 9(2) restricted those powers to
situations where there was a reason to believe that a part of the building had
not been constructed in compliance with the Act and there was a pre-existing
order not to cover. At trial, Conant J. accepted that the preconditions to
satisfy granting an order pursuant to s. 9(2) of the Act were absent in this
case. However, he rejected the argument that this was the only power available
to the municipality to remedy the defect.
46 The trial judge found
that, pursuant to s. 11(1)(d) of the 1990 Act, the inspector had the power to
order the appellant to call in an engineer to saw through the underpinning to
determine its width. Furthermore, pursuant to s. 9(1) of the Act, the inspector
could have ordered that the basement floor not be laid. He could then have
returned after the drains had been installed, when it was not raining, and dug
down to determine the depth of the underpinning. The city argues that this
places too high a standard on the inspector. He had no reason to believe that
the underpinning did not meet the specifications in the plan. His inspection
indicated that the work had been done properly. I find no error in the findings
of the trial judge in this respect. The inspector reached his conclusion that
the depth and the width of the underpinning met the specifications in the plan
on the assurance of a contractor who had already shown disregard for the
requirements of the building permit, and tests which concluded that the other
aspects of the underpinning had met the standard. Given the nature of the work,
it was unreasonable to conclude that the width and the depth of the underpinning
met the requirements of the building code without actually inspecting that
aspect of the work.
47 The trial judge applied
the correct principles in determining that the inspector failed to conduct a
reasonable inspection in the circumstances. He recognized that in the
circumstances, especially in light of the importance of the underpinning to the
structural safety of the home, a more vigilant inspection was required. The Act
granted the power to the inspector to conduct such an inspection. By failing to
exercise those powers to ensure that the underpinning met the specifications in
the plan, the inspector failed to meet the standard of care that would have been
expected of an ordinary, reasonable and prudent inspector in the circumstances.
I therefore agree with Conant J. that the municipality was negligent in
conducting the inspection of the renovations on the appellant's home.
C. The Negligent Owner-Builder
48 Having found that the
city owed a duty to the appellant to conduct a reasonable inspection, and that
its inspector failed to conduct a reasonable inspection in the circumstances, I
must now examine whether the conduct of the appellant in this case was
negligent, absolving the city of some of its liability for its insufficient
inspection. The appellant's conduct may even have been such as to justify
absolving the city of all liability for its negligence.
49 Mr. Ingles had specified
in his contract that Tutkaluk was to apply for a building permit. Tutkaluk told
him that the work would be delayed if it had to obtain a building permit before
it began. The trial judge found that the appellant knew or should have known
what he was doing in agreeing to a delay in obtaining a building permit, and
found that he was negligent in allowing the construction to begin without a
permit. On the other hand, the trial judge also found that it was impossible to
conclude that the appellant and his wife participated in a conscious effort to
prevent the building inspector from examining the underpinnings of their home.
The Court of Appeal found that the appellant and his wife were "sadly
mistaken" in relying on Tutkaluk's advice that it was appropriate to
proceed with the underpinning without a permit. It is clear that the appellant
was negligent. That negligence may reduce, in part, the city's liability.
However, for the city to avail itself of the complete defence described in
Rothfield v. Manolakos, supra, it must show that the appellant's
conduct was such as to make him the sole source of his own loss.
50 As I have discussed
above, the defence described in Rothfield v. Manolakos applies only in
the narrowest circumstances. To avail itself of the defence, the municipality
must show that the owner-builders knowingly flouted the applicable building
regulations or the directives of the building inspector, or that the
owner-builders totally failed to acquit themselves of the responsibilities that
rested on them, such that the inspector was no longer in a position to take
reasonable measures to ensure that the construction was done in accordance with
the applicable standards. In delineating the type of conduct which might be
considered "flouting" of the building regulations, or a total failure
to meet the requirements of the legislative scheme on the part of the owner, it
is important to consider the fact that the defence absolves municipalities of
all liability. As a result it serves as a complete bar to recovery for certain
plaintiffs. The scope of the defence must be consistent with the purposes of a
system of tort law, and with tort law principles themselves.
51 The contributory
negligence bar, where a plaintiff was denied any means of recovery once he or
she was seen to have contributed to his or her own loss, is no longer a part of
our system of tort law. It has been replaced by statutory schemes which
apportion liability between negligent defendants and contributorily negligent
plaintiffs. This Court recently reaffirmed its disapproval of the bar in Bow
Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., [1997] 3 S.C.R.
1210. In the course of determining whether the contributory negligence bar
could still apply in maritime law, McLachlin J. states (at para. 94):
The considerations on which the contributory
negligence bar was based no longer comport with the modern view of fairness and
justice. Tort law no longer accepts the traditional theory underpinning the
contributory negligence bar -- that the injured party cannot prove that the
tortfeasor "caused" the damage. The contributory negligence bar
results in manifest unfairness, particularly where the negligence of the injured
party is slight in comparison with the negligence of others. Nor does the
contributory negligence bar further the goal of modern tort law of encouraging
care and vigilance. So long as an injured party can be shown to be marginally at
fault, a tortfeasor's conduct, no matter how egregious, goes unpunished.
In light of this Court's approach to the
contributory negligence bar, a municipality cannot avail itself of the defence
set out in Rothfield v. Manolakos, supra, simply because a
plaintiff acted negligently. To allow the municipality to do so would amount to
a reintroduction of the contributory negligence bar into the sphere of municipal
inspection. It would be inconsistent with the modern goal of tort law of
encouraging care and vigilance to absolve a municipality of all liability for a
negligent inspection simply because its inspectors were contacted late.
Municipalities, having made a policy decision to inspect even when a permit is
obtained late, would be able to conduct unreasonable inspections, while being
assured that there would be no financial sanction for doing so. As I have stated
above, the contributory negligence of a plaintiff may still be relevant to the
apportionment of liability. In Bow Valley v. Saint John Shipbuilding, supra,
McLachlin J. reduced the plaintiff's recovery by 60 percent due to its
negligence. In the case at bar, the liability will also be apportioned in
accordance with the appellant's negligence. In the rarest of circumstances, such
as those described in Rothfield v. Manolakos, a defendant may be absolved
of all liability because it is shown that the owner-builder is entirely
responsible for the damage and did not rely on the inspection.
52 The concept of
"flouting", therefore, must denote conduct which extends far beyond
mere negligence on the part of an owner-builder. The word suggests that the
owner-builder in fact mocks the inspection scheme. Certainly, an owner-builder
who submitted false plans and documents to receive a permit would be mocking the
scheme. Similarly, an owner-builder who never contacted an inspector to conduct
an inspection would show a lack of respect for the inspection scheme and
certainly no reliance on it. However, in this case the appellant did not act in
these ways. He certainly acted negligently. The trial judge, however, found that
he did not participate in a conscious effort to undermine the building code
regime. In my view, such conduct does not amount to a "flouting" of
the building code. As a result, I find that the Court of Appeal erred in
absolving the city of all liability.
D. Damages
53 The appellant contends
that this Court does not have the jurisdiction to review the trial judge's award
of damages in this case because the respondent city did not apply for leave to
cross-appeal pursuant to Rule 29 of the Rules of the Supreme Court of Canada,
SOR/83-74. The relevant provisions of Rule 29 provide as follows:
29. (1) A respondent who seeks to set
aside or vary the whole or any part of the disposition of the judgment appealed
from shall apply for leave to cross-appeal within 30 clear days after the
service of the application for leave.
. . .
(3) A respondent who seeks to uphold the
judgment on a ground or grounds not raised in the reasons for the judgment
appealed from may do so in the respondent's factum without applying for leave to
cross-appeal, and the appellant may serve and file a factum in reply in
accordance with Rule 41.
The appellant argues that since the city's
arguments with respect to apportionment, damages, and joint and several
liability do not seek to uphold the Court of Appeal judgment on a ground not
raised in the reasons for judgment, the city must apply for leave to
cross-appeal pursuant to Rule 29(1).
54 The Court of Appeal did
not find that the city was negligent in this case, and as such, did not comment
upon the apportionment of the damages by the trial judge. In asking this Court
to review the trial judge's apportionment of fault in this case, the city is not
seeking to set aside or vary any part of the Court of Appeal judgment. In
addition, the city is not seeking to uphold the judgment on a ground or grounds
not raised in the reasons for judgment. The city is merely responding to the
appellant's position that the appellant's negligence is properly considered in
the apportionment of fault, and not in the determination of whether a duty of
care was owed by the municipality. Therefore, I find that the city's arguments
do not fall within Rule 29 and that this Court has the jurisdiction to review
the apportionment of fault by the trial judge.
55 The trial judge found
that Tutkaluk was 80 percent liable for the damage suffered by the appellant.
The city was 20 percent liable for its negligent inspection. He then turned to
the appellant's negligence. Having found that the appellant should bear some of
the responsibility for his loss, the trial judge reduced the city's liability by
30 percent to account for the appellant's negligence. It appears that the trial
judge took this approach to ensure that Tutkaluk would not benefit from the
finding of negligence against the appellant, by having his damages reduced in
proportion to the appellant's fault. With respect, this initial apportionment is
not consistent with the Negligence Act, R.S.O. 1990, c. N.1. Sections 1
and 3 of that Act read as follows:
1. Where damages have been caused or
contributed to by the fault or neglect of two or more persons, the court shall
determine the degree in which each of such persons is at fault or negligent,
and, where two or more persons are found at fault or negligent, they are jointly
and severally liable to the person suffering loss or damage for such fault or
negligence, but as between themselves, in the absence of any contract express or
implied, each is liable to make contribution and indemnify each other in the
degree in which they are respectively found to be at fault or negligent.
3. In any action for damages that is
founded upon the fault or negligence of the defendant if fault or negligence is
found on the part of the plaintiff that contributed to the damages, the court
shall apportion the damages in proportion to the degree of fault or negligence
found against the parties respectively.
When there are two or more tortfeasors, and a
plaintiff has also been found negligent, the proper approach to apportionment is
to first reduce the extent of the recoverable damages in proportion with the
plaintiff's negligence, and then to apportion the remaining damages between the
defendants, in accordance with their fault; see, for example, Fitzgerald v.
Lane, [1988] 2 All E.R. 961 (H.L.); Bow Valley v. Saint John Shipbuilding,
supra; Colonial Coach Lines Ltd. v. Bennett, [1968] 1 O.R. 333.
56 In his subsequent
addendum, however, the trial judge clarified that his intention was to apportion
fault so that the appellant would be 6 percent liable, the city would be 14
percent liable and Tutkaluk would be 80 percent liable. In assessing the
damages, he corrected his previous error, and subtracted the portion of the
damages that could be attributed to the plaintiff in accordance with his
findings of fault.
57 The city has asked this
Court to overturn the trial judge's apportionment of fault in this case. It
argues that his apportionment is inconsistent with other apportionments in
similar situations; see, for example, Rothfield v. Manolakos, supra,
at p. 1278. The apportionment of liability is primarily a matter within the
province of the trial judge. Appellate courts should not interfere with the
trial judge's apportionment unless there is demonstrable error in the trial
judge's appreciation of the facts or applicable legal principles; see Bow
Valley v. Saint John Shipbuilding, supra, at para. 78. While the
trial judge applied an unorthodox method of apportionment in his original
judgment, his subsequent addendum clearly shows his intention to apportion fault
between the plaintiff and the defendants as follows: 6 percent to the appellant;
14 percent to the city; and 80 percent to the contractor. The trial judge was
well apprised of all of the facts in the case, and based his final apportionment
on these facts. In my view, there is no demonstrable error in the trial judge's
appreciation of the facts in this case to justify interfering with his
apportionment.
58 The city also argues
that it should not be held to be jointly and severally liable with the
contractor and that it should be liable only for its portion of the fault. To
support this contention, the city relies on authorities from British Columbia
that have held that where the plaintiff is contributorily negligent, multiple
tortfeasors will only be liable to the extent of their fault; see, for example, Leischner
v. West Kootenay Power & Light Co. (1986), 24 D.L.R. (4th) 641 (B.C.C.A.).
I do not find these authorities to be applicable in this case. The legislation
in British Columbia differs significantly from the legislation in Ontario.
Section 2(c) of the Negligence Act, R.S.B.C. 1979, c. 298, reads as
follows:
. . . as between each person who has
sustained damage or loss and each other person who is liable to make good the
damage or loss, the person sustaining the damage or loss shall be entitled to
recover from that other person the percentage of the damage or loss sustained as
corresponds to the degree of fault of that other person. [Emphasis added.]
Therefore, it is possible to read the British
Columbia legislation as allowing contributorily negligent plaintiffs to recover
only the percentage of the damage sustained that corresponds to the degree of
fault of each of the individual tortfeasors.
59 The Ontario legislation
has been interpreted differently, and joint and several judgments have been
awarded to contributorily negligent plaintiffs; see Menow v. Honsberger Ltd.,
[1970] 1 O.R. 54 (H.C.), aff'd [1971] 1 O.R. 129 (C.A.), aff'd on other grounds,
[1974] S.C.R. 239 (sub nom. Jordan House Ltd. v. Menow). Similarly, in Bow
Valley v. Saint John Shipbuilding, supra, this Court ruled that
defendants would be jointly and severally liable for a negligent plaintiff's
damages in the context of the Canada Shipping Act, R.S.C., 1985, c. S-9.
The purpose of a regime which imposes joint and several liability on multiple
defendants is to ensure that plaintiffs receive actual compensation for their
loss. Given the wording of the Ontario Negligence Act, I can see no
reason to deny this benefit to a plaintiff who contributes to his or her loss.
His or her responsibility for the loss is accounted for in the apportionment of
fault. There is no reason to account for it again by denying him or her the
benefit of a scheme of joint and several liability when the wording of the
legislation does not intend it to be so.
60 In light of the
foregoing analysis, I would allow the appeal and restore the apportionment of
fault by the trial judge. As a result, the damages of $52,520 will be reduced by
$3,151.20, representing 6 percent of the damages, to account for the appellant's
negligence. I would thus restore the judgment of $49,368.80 against both the
city and the contractor. The city is entitled to have judgment for indemnity
against the contractor for $42,016.
61 I turn now to the
prejudgment interest that was awarded by the trial judge. The trial judge
awarded prejudgment interest at the rate of 12.9 percent. The city has asked
this Court to review that award to account for the fluctuations in the market
interest rates that occurred between the date that the action was commenced and
the date of judgment. The Courts of Justice Act, R.S.O. 1990, c. C.43, s.
130, grants trial judges the discretion to award prejudgment interest at a
different rate than the prescribed interest rate to account for changes in
market interest rates. The trial judge did not find that this was an appropriate
case to lower the prejudgment interest rate from the one prescribed. He did not
find that he was prevented from adjusting the interest rate, but simply chose
not to do so. I find no reason to interfere with the trial judge's exercise of
his discretion on this matter.
62 I would accordingly
allow the appeal, set aside the judgment of the Court of Appeal and restore the
decision of the trial judge, with costs throughout.
Appeal allowed with costs.
Solicitor for the
appellant: Philip Anisman, Toronto.
Solicitor for the respondent: City
Solicitor, Toronto.
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