Ipsofactoj.com: International Cases  Part 3 Case 2 [SCC]
SUPREME COURT OF CANADA
- vs -
27 SEPTEMBER 2001
This is an appeal from an order granting summary judgment to the respondent, that was upheld by the Ontario Court of Appeal. The issue is whether the appellants' action against the respondent is statute-barred. I conclude that it is not and that the summary judgment should be set aside.
In the 1960s, the Ontario Department of Highways (now the Ministry of Transportation Ontario ("MTO")) reconstructed a highway near the appellants' farm. Waste asphalt was generated by the highway construction project. A substantial quantity of this waste asphalt was deposited on the appellants' farm as fill. Although the evidence presently before this Court is untested, it appears from the pleadings that the removal and disposal of asphalt waste was carried out by a contractor, not by the Department of Highways itself. It also seems that the contractor responsible for the removal of the waste asphalt entered into an agreement with a previous owner of the appellants' farm to bury the asphalt on the farm. There is no evidence as to the nature of this agreement, but the respondent submits that the usual practice was for an oral agreement to be struck between the contractor and the landowner.
The appellants Bernard and Maria Berendsen are originally from the Netherlands, and shortly following their arrival in Canada they purchased the farm in question in 1981. At the date of purchase, they were not aware of the buried asphalt. They operated a dairy farm on the premises, but claim to have experienced a number of operational difficulties throughout the 1980s, including cattle and chicken deaths, deformed calves, and low milk production. The appellants themselves also claim to have suffered a number of health problems during this period. From an early date, it appears that the appellants suspected that water contaminants might have been responsible for these events. In 1982 and again in 1988, the appellants asked the Ontario Ministry of the Environment ("MOE") to test the water at the farm, but both rounds of testing failed to detect any contamination.
The appellants were confident in their farming abilities, and continued to believe that an extraneous factor was responsible for their difficulties. In 1989, they began making inquiries of their neighbours with respect to the farm. As a result of these inquiries, they learned about the buried asphalt. They immediately suspected that the asphalt might be the root cause of their troubles. The appellants set out to gather scientific evidence to substantiate their suspicions, and they also attempted to remedy their water problems. They drilled a second well as far from the asphalt as possible, stopped drinking the well water, and hired independent consultants to conduct tests on their water and on animals that had died. Apparently acting pursuant to existing policies, the MOE constructed an underground water tank on the farm, and paid for water to be trucked in until it had completed further testing of the ground water. This round of MOE testing once again found that all contaminants were within acceptable limits, and the MOE eventually discontinued paying for water to be trucked to the farm. The consultants hired by the appellants, however, found additional contaminants in the water and, by 1993, claim to have linked these contaminants to the health problems of the cattle.
Litigation with respect to this issue was not initiated when the appellants first learned about the buried asphalt in 1989. In fact, a statement of claim was not served on the respondent until March, 1994. The appellants submit that there are two explanations for this delay.
First, they did not wish to initiate legal proceedings until they were reasonably certain that the asphalt was indeed responsible for the health problems experienced on the farm. They were waiting for scientific confirmation before claiming that such a link exists.
Second, the appellants claim that they delayed commencing litigation because of a number of promises made to them by various representatives of the Ontario government, including statements by the Minister of Agriculture and Food that the "cheque was in the mail" to settle this issue.
Before this case could go to trial, the respondent brought a motion to dismiss the action because it was not brought within the applicable time period. The respondent submits that the applicable limitation period is six months from the discovery of the cause of action, as set out in the Public Authorities Protection Act, R.S.O. 1990, c. P.38 ("the Act"). Section 7(1) of the Act contains the six-month limitation period:
No action, prosecution or other proceeding lies or shall be instituted against any person for an act done in pursuance or execution or intended execution of any statutory or other public duty or authority, or in respect of any alleged neglect or default in the execution of any such duty or authority, unless it is commenced within six months next after the cause of action arose, or, in case of continuance of injury or damage, within six months after the ceasing thereof.
The respondents argue that the Act applies as the burial of the waste asphalt was done pursuant to a public duty to construct highways.
The appellants submit that the Act does not apply, because the burial of the asphalt was an operational decision based on a private contractual arrangement. Although the construction of the highway was carried out pursuant to a public duty, the decision with respect to how to dispose of waste asphalt from the construction project was not made pursuant to a public duty. Furthermore, the eventual problems that the appellants claim were caused by the negligent disposal of the asphalt arose from a private contract. Negligence in the disposal stage therefore raises a duty owed only to the landowner involved, not to the public at large. The appellants further submit that, even if the Act is held to apply, their claim is not statute-barred because:
the applicable discoverability date is October 1993 and therefore the claim was initiated within the six-month limit;
this is a case of "continuance of injury or damage" within the meaning of s. 7 of the Act, and therefore the limitations period clock has not even begun to run; and alternatively
the statements made by various representatives of the Ontario government mean that the doctrines of waiver and promissory estoppel apply, thereby again bringing the claim within the six-month limitation period.
On August 5, 1998, Grossi J. of the Ontario Court (General Division) granted the respondent's motion for summary judgment.
First, he held that the Act applied to this action, on the grounds that there "is a nexus between the removal of the asphalt in repairing the highway and its disposal."
Second, Grossi J. concluded that the appellants' case "was complete" by August 1992, and that this was therefore the applicable discoverability date. As the statement of claim was not served until March 1994, the action was commenced outside the six-month limitation period imposed by s. 7 of the Act.
Third, he held that "continuance of injury" in s. 7 of the Act "does not refer to the consequences of an allegedly negligent act but rather is restricted to continuance of an act complained of." Therefore, there was no continuance of injury in this case.
Finally, he held that the respondent's actions in dealing with the appellant did not constitute waiver or estoppel, on the grounds that the comments of various government representatives did "not come close to meeting [the] standard" to make out such a claim, namely of "`intend[ing] to affect the legal relations' between the parties."
Grossi J. therefore concluded that this was an appropriate case to grant summary judgment.
On March 23, 1999, the Ontario Court of Appeal dismissed the appellants' appeal of Grossi J.'s decision:  O.J. No. 1018 (QL). In a brief endorsement, which I reproduce in its entirety, Krever J.A. stated for the court):
We called on the respondent only with respect to the appellants' submissions on the issues of continuing injury and waiver and estoppel. We do not agree that there were continuing duties on the part of the respondent such as a duty to warn and therefore agree with Grossi J. that there was no continuance of injury or damage within the meaning of s. 7 of the Public Authorities Protection Act. In the light of the letter from the appellants' counsel to the Minister of May 25, 1993, the appellants cannot rely on any alleged acts of waiver or estoppel that occurred after the date of that letter and therefore, the action having been commenced on March 7, 1994 is caught by s. 7 of the Act. The appeal is dismissed. The respondent does not ask for costs.
The decision implicitly accepts that the Act applies and that the discoverability date was more than six months prior to March 7, 1994, the date the statement of claim was issued.
I should point out, however, that both this decision and the decision of Grossi J. were rendered prior to the release of Des Champs v Conseil des écoles séparées catholiques de langue française de Prescott-Russell,  3 S.C.R. 281, where this Court set out guidelines to assist in determining when s. 7 of the Act applies.
In the reasons that follow, I respectfully disagree with the courts below that the Act applies in this case. As a result, and as no alternative was argued, the usual six-year limitation period set out in s. 45(1)(g) of the Limitations Act, R.S.O. 1990, c. L.5, applies, not the abbreviated six-month limitation period provided for by s. 7 of the Act. I need not determine the precise discoverability date, as it was no earlier than 1989, when the appellants first learned of the asphalt on their land. Since the statement of claim was issued in March 1994, it is within the six-year limitation period. In light of this conclusion, I also need not discuss the issues with respect to what constitutes "continuance of injury or damage" within the meaning of s. 7 of the Act or whether the doctrines of waiver or estoppel apply.
1. The Applicable Test
The appellants acknowledge that the MTO and its agents are public authorities that may attempt to rely on the six-month limitation period in s. 7 of the Act: see e.g. Attorney-General for Ontario v Palmer (1979), 28 O.R. (2d) 35 (C.A.), at p. 50. The issue in dispute is whether the disposal of the waste asphalt on the appellants' farm is an action that comes within this section.
This Court recently considered s. 7 of the Act in Des Champs, supra. Des Champs affirmed the principle that not every duty and power of a public authority comes within the protections of the Act. Writing for the majority, Binnie J. stated, at para. 12:
The wording of s. 7 of the Act indicates that the legislature did not intend to throw the protective net of s. 7 around public authorities in Ontario as a matter of status. The reference to the "intended execution of any statutory or other public duty or authority" (emphasis added) limits the protection to public duties and powers and confirms inferentially that a public authority may well have other duties and powers that are essentially of a private nature. In drawing the line between the public aspects and private aspects, the general principle is that the wording of s. 7 is to be read narrowly and against the party seeking its special protection. This produces an inevitable line drawing exercise that requires the court to examine the nature of the statutory power or duty imposed on the defendant public authority as well as the character of the particular conduct about which the plaintiff complains.
[Emphasis in original]
Binnie J. provided examples of duties and powers to which s. 7 would apply, and to which it would not apply (at para. 12):
The School Board, to take this case, is required to provide educational services to the public. In order to carry out its program, it has to build schools and hire teachers. If the Board were sued by an injured child for operating an unsafe school, or by parents for wrongly refusing to admit their child to classes, the claims would properly engage the public duties of the school, and be covered by the special limitation. On the other hand, a claim by a disgruntled builder under a school construction contract, or an unpaid caterer who had provided food services, would stand on a different footing. Although the subject matter of their claim clearly relates to the execution by the school of its public mandate, it is incidental thereto. The builder or caterer would be asserting private rights under private contracts. Their claims would not be within the intended scope of the disability imposed by the special limitation period.
As pointed out by Binnie J. in Des Champs, the approach of drawing a distinction between public and private duties for the purposes of the Act is not new. The House of Lords relied on this approach almost a century ago, in Bradford Corp. v Myers,  1 A.C. 242. Lord Buckmaster L.C. stated, at pp. 247-48:
.... it is not because the act out of which an action arises is within their power that a public authority enjoy the benefit of the statute. It is because the act is one which is either an act in the direct execution of a statute, or in the discharge of a public duty, or the exercise of a public authority. I regard these latter words as meaning a duty owed to all the public alike or an authority exercised impartially with regard to all the public. It assumes that there are duties and authorities which are not public, and that in the exercise or discharge of such duties or authorities this protection does not apply.
This distinction is well illustrated by the present case. It may be conceded that the local authority were bound properly to dispose of their residual products [coke waste from gas production]; but there was no obligation upon them to dispose by sale, though this was the most obvious and ordinary way. Still less was there any duty to dispose of them to the respondent. No member of the public could have complained if the respondent had not been supplied; nor had any member of the public the right to require the local authority to contract with him.
See also Clarke v St. Helens Borough Council (1916), 85 L.J.K.B. 17 (C.A.); Edwards v Metropolitan Water Board,  1 K.B. 291 (C.A.); Greenwood v Atherton,  1 K.B. 388 (C.A.); and Griffiths v Smith,  A.C. 170 (H.L.), all of which draw a similar distinction between public and private acts by a public authority.
This approach was subsequently adopted into Canadian law in McGonegal v Gray,  2 S.C.R. 274. Although this Court divided 4-3 in McGonegal over whether or not a mishap stemming from a teacher's making of soup in a schoolhouse came within the Act, there was unanimous agreement that a distinction should be drawn between public and private acts. For example, Rand J. stated, in one of the majority judgments, at p. 289:
I have given the facts of these cases in some detail to indicate the strict application which the courts have from the outset made of this drastic enactment [now s. 7 of the Act]. The distinction made in Myers which confined the scope of the public service to those acts in direct performance of it, as contrasted with those of a private interest although incidental to the undertaking and authority as a whole, and in Clarke between primary and direct public acts and those which are subordinate or incidental to them, indicates the line of distinction for the purposes here.
The majority of the Court held that s. 11 (now s. 7) of the Act did not apply, as the teacher was making soup for her own consumption (a private act), not for the children in the class (a public act).
The Court returned to this issue in Berardinelli v Ontario Housing Corp.,  1 S.C.R. 275. Estey J., for the majority, affirmed this approach, at p. 283:
It therefore follows that the reference in s. 11 [now s. 7 of the Act] to "any statutory or other public duty" applies in the context of s. 6(2) of The Housing Development Act to those aspects of the statutory powers and duties there established which have a public aspect or connotation, and does not comprehend those planning, construction and managerial responsibilities (to paraphrase s. 6(2)) which have a private executive or private administrative application or are subordinate in nature. To read the section otherwise would be to bring within the protective umbrella of the limitation imposed by [s. 7] every aspect of the powers enunciated in s. 6(2) including operational matters, however insignificant in the spectrum of management activities for example, and would as already mentioned create different conditions of owner liability for two apparently similar housing facilities.
Estey J. envisioned a spectrum between purely public and purely private acts, on which every action can be located. He concluded, at p. 286, that the removal of snow by the housing authority was "a private and operational matter". This conclusion was bolstered by his observation that the removal of snow from walkways "is something done every winter by almost every householder in Canada" (p. 286).
The case law regarding s. 7 of the Act was canvassed in considerably greater detail by Binnie J. in Des Champs, supra. A similar exercise need not be repeated here, however, because this Court in Des Champs set out guidelines to determine whether or not a public authority can rely on s. 7 of the Act. Binnie J. stated, at paras. 50-51:
A court confronted with a pleading under s. 7 of the Act or similarly worded limitations statutes may wish to proceed as follows:
If the answer to question five is in the affirmative, the limitation period applies.
[Emphasis in original]
2. Application to this Appeal
I will address each of the Des Champs guidelines. With respect to the first question, regarding whether the defendant is a public authority within the class of entities or individuals for whom the limitation protection was intended, it has already been noted that the appellants do not challenge the respondent's status as a public authority.
Turning to the second question, it is evident that the respondent was disposing of waste asphalt resulting from the repair of a highway. The repair of the highway itself is unquestionably a public duty. Section 33(1) of the Highway Improvement Act, R.S.O. 1960, c. 171 (now the Public Transportation and Highway Improvement Act, R.S.O. 1990, c. P.50), states:
The King's Highway shall be maintained and kept in repair by the Department [of Highways] and any municipality in which any part of the King's Highway is situate is relieved from any liability therefor, but this does not apply to any sidewalk or municipal undertaking or work constructed or in course of construction by a municipality or which a municipality may lawfully do or construct upon the highway, and the municipality is liable for want of repair of the sidewalk, municipal undertaking or work, whether the want of repair is the result of nonfeasance or misfeasance, in the same manner and to the same extent as in the case of any other like work constructed by the municipality.
The issue is whether the decision as to the manner in which the waste asphalt ought to be disposed of was a decision mandated by the public duty to maintain the highway. It is sufficient at this stage to simply note that, at the time of the disposal at issue in this case, there was no statutory requirement to dispose of waste asphalt - for those projects that generated waste asphalt - in any particular fashion, and certainly no statutory requirement to bury waste asphalt on private lands.
These comments are closely tied to the third question of whether the power or duty relied on as part of the plaintiff's cause of action is properly classified as entailing a public aspect, or should more properly be viewed as being of a private or subordinate nature? On this question, it seems to me that there can be little doubt that the duty of repairing a public highway entails a public aspect, given that highways are for public benefit and are maintained by the MTO. However, just as the act of downsizing was held to "invariably have both public and private aspects" in Des Champs, supra, at para. 56, the act of repairing a highway will also generally involve both public and private activities. This is therefore a case where it is the activity at issue, not the duty at issue, that is the critical component of the inquiry.
This brings us to the fourth consideration of the Des Champs approach - whether the activity of the defendant that is at issue is inherently of a public nature, or whether it is more of an internal or operational nature having a predominantly private aspect. The activity at issue in this case is the disposal of waste asphalt. The appellants submit that the method of disposal must be an operational decision because the method of disposal is not mandated by statute. The respondent submits that, at least in the 1960s, a highway could generally not be repaired without generating waste asphalt, so the disposal of that waste was necessarily part of the public duty to build and maintain highways.
Looking at all the relevant circumstances, I conclude that the appellants' position should prevail, and that the decision regarding the manner in which the waste asphalt was disposed of is predominantly of an operational nature, as I will now discuss.
In the first place, while the MTO may owe a duty to every member of the public to repair highways, the disposal of waste asphalt on private land gives rise to a duty of care owed only to the landowner involved and possibly a few other individuals who could be impacted by the disposal. In other words, the courts must examine who could bring an action against the government for the negligent disposal of waste asphalt. When asphalt has been disposed of on private land, and is only causing harm to a restricted number of individuals, it is only those individuals affected, not any member of the public, who could bring such a claim.
In addition, the disposal of the asphalt was apparently arranged pursuant to a private agreement between the contractor hired by the MTO and the owner of the farm at the time of disposal. In an affidavit filed by the respondent, Malcolm MacLean, a professional engineer employed by the MTO, states that the "responsibility for the management of reclaimed asphalt pavement was primarily left to the contractor working on behalf of MTO". If the original agreement for disposal had been breached, it is debatable whether the contractor would have been able to rely on the protections of s. 7 of the Act. Indeed, whether the contractor involved in disposing of the waste asphalt in the case at bar should be viewed as an agent of the MTO is an issue that may arise at trial. Returning to the examples of where the line is to be drawn between actions of a public nature and of a private nature set out by Binnie J. in Des Champs, supra, I am of the view that the agreement for disposal of waste asphalt is similar to "a claim by a disgruntled builder under a school construction contract, or an unpaid caterer who had provided food services" (para. 12). It is an agreement that is incidental to the public duty being carried out.
Finally, the MTO, or its agent, was not under a duty to dispose of the waste asphalt on private lands. As the MacLean affidavit states, it was also possible that the "contractor could use the material for other projects, or haul it to a disposal site". While the MacLean affidavit goes on to state that disposal on private lands as fill was the most common practice during the 1960s, the frequency with which an activity was carried out has little, if anything, to do with whether or not that activity is public in nature. I therefore conclude that the activity of disposing of waste asphalt is an operational decision of a predominantly private character, at least in the circumstances of this case.
This brings us to the final element of the Des Champs approach, namely whether, from the plaintiff's perspective, the plaintiff's claim or alleged right correlates "to the exercise by the defendant public authority of a public power or duty or does it relate to the breach of a public duty or does it complain about an activity of a public character, thus classified?" From the discussion above, it is clear that the appellants' claim does not relate to the exercise by the respondent of a public power or duty. Instead, it relates to an operational decision made incidentally to the exercise of a public duty. Indeed, the private nature of the agreement pursuant to which the asphalt was disposed of will be an evidentiary issue at trial, given that the appellants must establish that the respondent owed them a duty of care. This inquiry will consider the effect, if any, of the fact that the land in question has changed ownership at least once during the time period at issue.
A parallel can be drawn between the case at bar and Bradford Corp. v Myers, supra. In Myers, an action was brought owing to the negligent delivery of a load of coke by an agent of the Bradford Corporation. A mistake during delivery resulted in the coke being "discharged through the respondent's shop window instead of into his cellar" (p. 244). Much like the case at bar, the Bradford Corporation argued that "the sale of coke was a transaction in execution of an Act of Parliament or of a duty or authority cast upon them by the various statutes under which they supply gas to the district" (p. 245). Lord Buckmaster L.C. rejected this argument. He noted, at p. 246, that the negligent act "arose in the execution of a private obligation which the appellants [Bradford Corporation] owed by contract to the respondent [Myers], for breach of which no one but the respondent [Myers] was entitled to complain." In a passage that could apply directly to the case at bar, the Lord Chancellor concluded, at pp. 247-48:
It may be conceded that the local authority were bound properly to dispose of their residual products; but there was no obligation upon them to dispose by sale, though this was the most obvious and ordinary way. Still less was there any duty to dispose of them to the respondent [Myers]. No member of the public could have complained if the respondent [Myers] had not been supplied; nor had any member of the public the right to require the local authority to contract with him.
The Lord Chancellor therefore held that the Bradford Corporation was not entitled to take advantage of the six-month limitation period in s. 1 of the Public Authorities Protection Act, 1893 (U.K.), 56 & 57 Vict., c. 61.
Just as the negligent delivery of coke to Mr. Myers was held to be too remote from the execution of the public mandate for which Parliament had intended protection, the negligent disposal of asphalt on the appellants' farm is too remote from the execution of the public mandate to maintain highways for which the Ontario Legislature had intended protection. Similarly, in Des Champs, supra, Binnie J. concluded that the "actions by the Board were not the inevitable consequence of the decision to downsize its complement of superintendents" (para. 58). That is equally the case here, where the disposal of waste asphalt on the appellants' farm, and in the particular location chosen, was not the inevitable consequence of the decision to repair the highway.
The six-month limitation period in s. 7 of the Act does not apply in this case. It has not been argued that any other special limitation periods are applicable, so the applicable limitation period is the usual six-year limitation period set out in s. 45(1)(g) of the Limitations Act and as the appellants advance. Nothing in these reasons is to reflect on the merits of the negligence claim against the respondent.
I would therefore allow the appeal, set aside the judgment of the Ontario Court of Appeal, and set aside the order for summary judgment, substituting therefor an order directing the appellants' action to be restored to the trial list as sought by the appellants. Pursuant to the appellants' request, the appellants shall have their costs in this Court and in the Ontario Court of Justice (General Division).
Des Champs v Conseil des écoles séparées catholiques de langue française de Prescott-Russell,  3 S.C.R. 281; Attorney-General for Ontario v Palmer (1979), 28 O.R. (2d) 35; Bradford Corp. v Myers,  1 A.C. 242; Clarke v St. Helens Borough Council (1916), 85 L.J.K.B. 17; Edwards v Metropolitan Water Board,  1 K.B. 291; Greenwood v Atherton,  1 K.B. 388; Griffiths v Smith,  A.C. 170; McGonegal v Gray,  2 S.C.R. 274; Berardinelli v Ontario Housing Corp.,  1 S.C.R. 275.
Highway Improvement Act, R.S.O. 1960, c. 171 [now the Public Transportation and Highway Improvement Act, R.S.O. 1990, c. P.50], s. 33(1).
Limitations Act, R.S.O. 1990, c. L.5, s. 45(1)(g).
Public Authorities Protection Act, R.S.O. 1990, c. P.38, s. 7(1).
Richard D. Lindgren and Donald R. Good, for the appellants (instructed by Canadian Environmental Law Association, Toronto).
William J. Manuel and James W. Smith, for the respondent (instructed by The Attorney General for Ontario, Toronto).
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