IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20121004

Docket: M092249

Registry:
Vancouver

Between:

Daphne Middelaer

Plaintiff

And

Carol Ann Berner

Defendant

And

Insurance
Corporation of British Columbia

Third
Party

Before:
The Honourable Mr. Justice Jenkins

Reasons for Judgment

[1]            
The plaintiff claims damages arising from a motor vehicle accident which
occurred on May 17, 2008 in Delta, B.C. (the “Accident”). This application is
to add the Corporation of Delta (“Delta”) as a defendant in this action and for
leave to file an amended notice of civil claim which will include the
allegations against Delta. This matter is contested by Delta as the application
to add Delta is being brought outside the limitation period within which an
action can be commenced against Delta.

[2]            
The defendant has never appeared to this action and has not retained
counsel.

[3]            
The Third Party, The Insurance Corporation of British Columbia (“ICBC”)
takes no position on this application.

Factual Background

[4]            
On May 17, 2008, near the 4400 block of 64^th Street in Delta,
B.C., the plaintiff and her four year old niece, Alexa, were standing in a
grassy area adjacent to 64^th Street when they were struck by a
vehicle driven by the defendant. The vehicle had allegedly veered off the road
onto the grassy area, striking the plaintiff and also striking and tragically
killing Alexa.

[5]            
This action was commenced on May 8, 2009 by the plaintiff’s former
counsel claiming damages arising from the Accident and naming Ms. Berner as the
sole defendant.

[6]            
There are several other actions commenced which relate to the Accident
and they are:

a)       One
action has been commenced by John and Yvette Middelaer who are the parents of
the plaintiff in this action, Daphne Middelaer. At the time of the Accident,
John and Yvette Middelaer were seated in a car that had been parked by the
plaintiff in an area adjacent to the grassy area near 64^th Street. The
car in which John and Yvette Middelaer were sitting was also struck by the
defendant’s vehicle.

b)       Alexa’s
parents, Laurel Middelaer and Michael Middelaer have commenced an action under
the Family Compensation Act R.S.B.C. 1996 c.126 wherein Carol Berner,
Daphne Middelaer and Delta have all been named as defendants.

c)       Laurel
and Michael Middelaer have also commenced separate actions. I am advised that
Laurel and Michael Middelaer have separated since the date of the
Accident. Daphne Middelaer, Carol Berner and Delta have all been named as
defendants in the separate actions commenced by Laurel and Michael Middelaer.

[7]            
This action, in which only Carol Berner was originally named as a
defendant, was commenced by previous counsel for Daphne Middelaer and the
current counsel for Daphne Middelaer in this action was retained in August of
2009, after filing a Notice of Change of Solicitor on October 21, 2009.

[8]            
Current counsel for Daphne Middelaer in this action is not counsel in
any of the other three actions referred to above. Separate counsel is
representing Daphne Middelaer in those actions.

[9]            
On February 10, 2010, ICBC filed a third party notice denying insurance
coverage to the defendant Berner under the terms of a plan of automobile
insurance. Later, on April 22, 2010, ICBC filed a statement of defence of the
third party in which ICBC denied negligence on the part of the defendant,
Berner.

[10]        
The defendant Carol Berner was convicted of impaired driving causing
death and several other charges arising from the Accident and in December 2010
was sentenced to two and one-half years incarceration as a result of the
convictions.

[11]        
On December 6, 2010, ICBC filed an application for production of the
file of the Delta Police Department relating to the Accident and an order for
production was granted on December 16, 2010.

[12]        
Plaintiff’s current counsel has deposed that on June 15, 2012 the
plaintiff provided her with a copy of a report of John Morall, PhD. dated
February 25, 2012. Plaintiff’s counsel learned that Dr. Morral had been
retained by counsel for Delta to provide an opinion with respect to the design
and maintenance of that portion of 64^th Street in Delta where the
Accident occurred. Dr. Morral’s report opined on the design, installation and
maintenance standards with respect to traffic calming on 64^th
Street. The report is twelve pages long and included opinions regarding the
speed limit in the section of 64^th Street at issue, the speed humps in
situ on 64^th Street and whether or not they were the appropriate
speed mitigation device for 64^th Street. Included in the report is
information on the size of the speed humps and their spacing.

[13]        
On June 19, 2012 the plaintiff provided her counsel in this action with
a copy of the transcript of an examination for discovery of Mr. Fraser, a
representative of Delta, conducted on May 3, 2012 in the actions commenced by
Laurel and Michael Middelear. From reading that transcript plaintiff’s counsel learned,
inter alia, of concerns raised by residents of 64^th Street prior
to the installation of speed humps and that Delta’s policy in the installation
of speed humps would have had reference to what are commonly referred to as the
TAC Guidelines published by the Transportation Association of Canada, which
include the maintenance and signage of roadways including guidelines for notice
of the presence of speed humps. Of particular significance were statements in
the transcript regarding the significance of the appropriate spacing of speed
humps.

[14]        
On June 27, 2012, counsel for ICBC delivered to counsel for the
plaintiff the report of Jonathan Lawrence which was dated June 21, 2012. Mr.
Lawrence is a mechanical engineer who is an expert in the field of accident
reconstruction. At page 6 of Mr. Lawrence’s report he stated:

Based on my measurements of the
speed humps at the accident location, they are collector street speed humps.
According to the information quoted above, collector street speed humps with a
50 km/h design speed should be spaced 123 meters apart. The speed humps at the
crash location were 10 meters apart.

[15]        
Mr. Lawrence concluded the speed humps were not in conformity with
sections of the Canadian Guide to Traffic Calming; the significance of which is
that in a vehicle travelling at50 km/h, going over the humps would cause the
vehicle to be more sensitive to any force applied to the steering wheel by the
driver. The inevitable conclusion is that the spacing of the speed humps could
have contributed to the cause of the Accident.

[16]        
Counsel for the plaintiff deposed that it was after her review of the
Lawrence Report, the examination for discovery of Mr. Fraser, and the Morell
Report that she determined that Delta was a necessary defendant to the claim of
the plaintiff. This application was filed on July 26, 2012.

[17]        
In a second affidavit, counsel for the plaintiff stated:

3.         I am advised by the Plaintiff and verily believe
to be true, that in the companion actions that have been brought relating to
the May 17, 2008 motor vehicle accident and in which the Plaintiff has been
named a Defendant, the Corporation of Delta brought an application for summary
dismissal. That application was heard on July 16 by Mr. Justice Leask and denied.
. .

4.         Attached to this my affidavit and marked as
Exhibit “A” is a true copy of the report of Allen Swanson. I am advised by the
Plaintiff and verily believe to be true that this report formed part of the
materials that were relied on in resisting the application of the Corporation
of Delta for summary dismissal.

5.         In his report Mr.
Swanson provides his opinion as to whether the spacing of the speed humps in
the location of the motor vehicle accident was in accordance with the
guidelines contained in the Canadian Guide to Neighbourhood Traffic Calming.
The opinion was responsive to the opinion provided by Dr. Morall. Mr. Swanson
concludes that the use of the dual speed bumps on this street is not in
accordance with the guidelines and that their use may have contributed to the
defendant losing control of her vehicle.

[18]        
There is no evidence before me that counsel for the plaintiff was aware,
prior to receipt of the Morall report on June 15, 2012, followed by the reports
of Mr. Lawrence and Mr. Swanson, of the issue of speed hump spacing as a
possible cause of the Accident or that Delta was responsible for the design,
maintenance and signage of the speed humps.

[19]        
Delta argues that what is relevant is the knowledge of the plaintiff, rather
than the plaintiff’s lawyer, that the plaintiff had grounds to pursue a claim
against Delta. Delta argues the plaintiff, being a defendant in three actions
commenced as a result of the Accident, must have known that Delta was also a
defendant in those actions. The presumption would be that the plaintiff in this
action, Daphne Middelaer, on reading the pleadings in the other three actions,
would have been aware of allegations against Delta that it was responsible for
the design, construction and maintenance of the speed humps, among other duties,
in connection with 64^th Street. Also, Delta submits that the Morall
report, a copy of the transcript of an examination for discovery of a
representative of Delta, and information regarding the refusal by Mr. Justice
Leask to dismiss a companion action against Delta had all been provided by the
plaintiff to her counsel. Delta asserts that it can therefore be assumed that
at some time previous, the plaintiff gained knowledge of a possible claim
against Delta.

The Law

[20]        
The plaintiff makes this application pursuant to Rule 6-2(7)(b) of the Supreme
Court Civil Rules (the “Rules”), which provides:

(7)        At any stage of a proceeding, the court, on
application by any person, may, subject to subrules (9) and (10),

…

(b) order that a person be added or substituted as a party if

(i)         that person ought to
have been joined as a party, or

(ii)        that person’s participation in
the proceeding is necessary to ensure that all matters in the proceeding may be
effectually adjudicated on, …

[21]        
The limitation for the commencement of an action claiming damages was likely
two years from the date the damages were sustained under s.3(2)(a) of the Limitation
Act, R.S.B.C. 1996, c. 266. I say “likely” as it is possible that
discoverability under s.6(4) of the Limitation Act could extend the
period beyond two years. In oral submissions plaintiff’s counsel conceded that
it would be a “fair finding” to conclude that this application was brought
outside the limitation period; however, the plaintiff contends that the date of
discovery, and therefore the date on which time began to run for the purposes
of the Limitation Act, was not the date of the accident, but rather from
some later date. I find that the statutory limitation period has expired,
however, based on my finding below, it is not necessary to delve further into
the issue of discoverability.

[22]        
The plaintiff relies on two decisions of the British Columbia Court of
Appeal, first, McIntosh v. Nilsson Bros. Inc. 2005 BCCA 297 [McIntosh]
and second, Moldovan v. Republic Western Insurance Company, 2011 BCCA
418 [Moldovan] to support the assertion that the balance of justice and
convenience favours the inclusion of Delta under Rule 6-2(7)(b).

[23]        
In McIntosh, Lambert, J.A. stated, at page 4:

[6]        The chambers judge noted
that the limitation period had expired by the time when Bavaria was first added
as a defendant, following the ex parte application. So he referred to
and considered the guidelines in Lui v. West Granville Manor Ltd. (No. 1)
(1985), 61 B.C.L.R. 315, Lui v. West Granville Manor Ltd. (No. 2)
(1987), 11 B.C.L.R. (2d) 273, and Teal Cedar Products (1977) Ltd. v. Dale
Intermediaries Ltd. (1996), 19 B.C.L.R. (3d) 282, where some of the factors
to be considered by a judge exercising the principled discretion conferred by
Rule 15(5)(a) in circumstances where a limitation period has expired were
discussed. The chambers judge noted that prejudice to the defendant sought
to be added could properly be presumed unless the applicant showed that, in the
circumstances, the balance of justice and convenience ought to override that
prejudice. In addition, the chambers judge found actual prejudice in this
case in the face that Randy Marks, who was the manager for Bavaria in October
of 1997, kept a record of fence inspections made at the time the inspections
occurred, but that he destroyed it in the Spring of 2000. That destruction was
six months after the limitation period expired. (Emphasis added.)

[24]        
Moldovan involved an application by the plaintiff to join an
insurer as a defendant outside the two year limitation provided in section 103
of Part 7 of the Insurance (Vehicle) Regulation, B.C. Regulation 447/83.
The action had been commenced against the defendant owner which was insured
under a policy entered into in Arizona with the insurer that did not carry on
business in British Columbia. The chambers judge had ordered the addition of
the insurer as a defendant and Madam Justice Newbury, who delivered the
unanimous decision of the Court of Appeal, stated at page 17:

[34]      Given that the insurer must have
been alerted by the plaintiff’s factum to this issue, and given that the Master
dealt with it at length, it seems to me that it would be appropriate for us to
proceed to decide whether RWIC should be added as a defendant in this action
pursuant to the Rule, rather than to remit it to the Supreme Court.

[35]      The
circumstances surrounding the plaintiff’s claim, which need not be rehearsed
here, were reviewed by the Master. Most important, he found that the
plaintiff’s delay “resulted not from any tactical decision designed to
gain an advantage for the plaintiff but from solicitor inadvertence or an
honest error in judgment.” As against this, RWIC has not alleged any particular
prejudice.

[25]        
On the issue of balancing of prejudice, Newbury
J. continued:

[35]      A helpful summary of the law on the weighing of
relative prejudice in this context is found in the analysis of Martinson, J. in
Wadsworth v. McLeod, supra:

Regard must be had
for the presence or absences of prejudice. There must be a balancing of
prejudices: Teal at p. 299. Prejudice can be assumed, or actual.

Prejudice means
prejudice associated with the delay itself. The fact that an opposing party is
affected negatively by such an amendment does not mean that he is prejudiced.
The prejudice must affect the ability to respond to the amended claim: Bel
Mar Developments Inc. v. North Shore Credit Union, [2001] B.C.J. No. 512,
2001 BCSC 388 at para. 9.

I agree with the
following comments of Master Bolton in Takenaka v. Stanley, [2000]
B.C.J. No. 288, 2000 BCSC 242 at paras. 41 and 42:

Putting aside
any issues of actual prejudice in addition to the prejudice resulting from the
loss of the cause of action or of the limitation defence, I am satisfied that
the prejudice to a plaintiff in the former event will usually be greater than
the prejudice to a defendant in the latter. In the former case the plaintiff
loses the opportunity to ask a court to consider a claim that the defendant has
done something the law of the land considers to be actionable. In the latter,
the defendant loses a windfall opportunity to avoid the issue altogether. Their
respective situations may be precisely balanced in purposely financial terms,
but not, I conclude, as a matter of justice. A
right to seek justice cannot fairly be equated with a right to cut short the
search without an answer.

I believe that his
analysis provides a firmer foundation for the conclusion I reached at paragraph
68 of the Mah decision ([2000] B.C.J. No. 44), that if all else is equal
the balance of prejudice should be resolved in favour of the plaintiff.” [At
paras. 22-4.]

[36] In
the circumstances of this case, it seems to me that the balance of prejudice is
clearly in the plaintiff’s favour, and that it is just and convenient that RWIC
was added as a defendant notwithstanding the time limitation in s. 103 of the Regulation.
(Emphasis added).

[26]        
Finally, I refer to the decision of the B.C. Court of Appeal in Amezcua
v. Taylor , 2010 BCCA 128 in which the court reviewed factors to be
considered on an application to amend pleadings when a limitation period has
expired. In that case, Justice Kirkpatrick stated:

[36]      The factors to be considered on an application to
amend pleadings following the expiry of a limitation period were set out in Teal
Cedar Products (1997) Ltd. v. Dale Intermediaries Ltd. (1996), 19 B.C.L.R.
(3d) 282 (C.A.) [Teal]. In Letvad v. Fenwick, 2000 BCCA 630, sub.
nom. Letvad v. Finley, 82 B.C.L.R. (3d) 296, this Court adopted the
analysis in Teal and applied it in the context of an application to add
defendants after the expiry of a limitation period. Justice Esson, speaking for
the Court, observed that there was an “unfettered discretion” to permit
amendments but noted:

[29]      My understanding of the
phrase “completely unfettered” in this context is that the discretion is not
fettered by the relevant legislation, i.e., the Rule [24(1)] and the Limitation
Act [s.4.4]. It is, however, fettered to the extent that, as
was held in Teal, it must be exercised
judicially, in accordance with the evidence adduced and such guidelines as may
appear from the authorities. It was held in Teal that the
guidelines to which the chambers judge is required to have regard include
these:

– the extent of the delay;

– the reasons for the delay;

– any explanation put forward to
account for the delay;

– the degree of prejudice caused by
delay; and

– the extent of the connection, if
any, between the existing claims and the proposed new cause of action.

McEachern C.J.B.C. in his
concurring reasons said at p. 300:

[74]      Applying the same principles regardless of whether
the application is to add new defendants, as in Ricketts or new causes
of action, as in Med Finance, I believe the most important
considerations, not necessarily in the following order, are the length of the
delay, prejudice to the respon­dents, and the overriding question of what is
just and convenient.

[27]        
I pause to note that plaintiff’s counsel enlightened me to the fact that
Delta has not relied on s.286 of the Local Government Act, R.S.B.C.
1996. c. 323 in this action, despite having plead this section in its defence
to the companion actions. Without making a determination on this issue, I am of
the opinion that s.286(3) would operate to prevent Delta from barring the
maintenance of this action due to the plaintiff’s failure to give notice within
the two month period as specified in s. 286(1).

Analysis:

[28]        
I am of the opinion that in this case, the balance of prejudice falls in
the plaintiff’s favour. To deny the application in this case would deny the
plaintiff the right to assert a claim of negligence on the part of Delta which
would usually be actionable and at the same time provide Delta a “windfall opportunity”
of avoiding altogether adjudication as to its potential liability: Takenaka v. Stanley, [2000] B.C.J. No.
288, 2000 BCSC 242. Delta had been named as a defendant in the companion
actions and has been actively defending those claims. There is no evidence of
any prejudice to Delta involving lost or destroyed evidence, witnesses who are no
longer available, or any other prejudice caused by the passage of time beyond
the limitation period. The only prejudice suffered by Delta is the opportunity
to rely on the statutory limitation period. There is no unfairness to Delta
because it has not lost its ability to defend itself in this action. The very
same actions or inactions of Delta, which form the basis of their defence to
the companion actions, would be at issue in this action.

[29]        
In terms of the explanation for the delay, I accept that the plaintiff’s
circumstance of being represented by separate counsel, and the circuitous route
through which the plaintiff was required to gather documentation from parties
in the other actions to forward to her solicitor in this action, contributed,
through no fault of her own, to the cause of the delay. On the other hand, the issue
of the delayed release of the Delta Police investigation was a matter lying
solely under the control of Delta, and for which no explanation was provided.

[30]        
Here, as in Moldovan, the delay has been caused by solicitor
inadvertence or an honest error in judgment. The plaintiff’s solicitor, who has
had conduct of this matter since August of 2009, was supplied with the report
of Dr. Morall, the transcript of the examination for discovery of a
representative of Delta and the Lawrence report in June 2012, shortly before
bringing this application. It is arguable that plaintiff’s counsel, with further
diligence, could have investigated the companion actions and learned of the
possibility of pursuing Delta; however, as stated above, the prejudice which
would fall to the plaintiff as a result of that failure greatly exceeds any
prejudice to Delta.

[31]        
Counsel for Delta submits that it is the plaintiff’s knowledge, not
necessarily that of the plaintiff’s counsel, that is significant. Counsel says
the plaintiff must have known of a possible claim against Delta having read the
Statements of Claim in the companion actions and in particular the allegations
against Delta relating to the design of the speed humps. In my view, if the
plaintiff had prior knowledge of the claims against Delta in the companion
actions, it is most likely that she did not appreciate the significance of
those claims, nor did she appreciate that the action commenced on her behalf should
have included Delta as a defendant. In fact, in her response to civil claim for
each of the companion actions, the plaintiff, as a defendant in those actions,
responded that the facts alleged against Delta were outside the knowledge of
the defendant, Daphne Middelaer. From the evidence before me it would appear
that as soon as the plaintiff became aware of the merits of the claim against
Delta, she acted dutifully to inform her counsel. It is also clear that once the
plaintiff informed her current counsel of the reports and the examination for
discovery of a representative of Delta, her counsel moved quickly to add Delta
as a defendant.

Conclusion:

[32]        
Considering the discretion referred to in Letvad and Teal, a
balancing of the prejudices to the parties and what is just and convenient,
Delta ought to have been joined as a party and its participation in the proceedings
is necessary to ensure the proper adjudication of the issues. As a result, I order
that Delta be added as a defendant to this action. I also grant leave to the
plaintiff to file a notice of civil claim to include the allegations made
against Delta.

“Jenkins J.”