IN THE SUPREME COURT OF BRITISH COLUMBIA

Date:
20100707

Docket:
S110390

Registry: New Westminster

Between:

Daniele
Maccarrone
and Sandra De Marinis

Plaintiffs

And

City
of Burnaby, Kinder Morgan Canada Inc., and
B. Cusano Contracting Inc.

Defendants

Before: The
Honourable Madam Justice S. Griffin

Reasons for Judgment

Introduction

[1]          
The plaintiffs in this action and eleven other related actions seek to
add a new party, R.F. Binnie & Associates Ltd. (“R.F. Binnie”), as a
defendant.  R.F. Binnie opposes the application.

Background

[2]          
This action and the eleven related actions were commenced on December
24, 2007, in the New Westminster Registry.  The related actions are Action
Nos. S110391, S110392, S110393, S110394, S110395, S110396, S110397,
S110398, S110399, S110400, and S110401.  These actions are but a few of the
claims arising out of an accident that occurred on July 24, 2007, when an oil
pipeline was struck by a backhoe operator.  The pipeline burst, spilling oil at
high pressure.  The pipeline rupture occurred in a residential area in the City
of Burnaby.

[3]          
The plaintiffs in this action and the eleven related actions are
residential property owners claiming damages from the oil spill (the “First
Homeowners”).

[4]          
As mentioned above, the First Homeowners commenced their actions by writs
filed December 24, 2007 (the “First Homeowners’ Actions”).  The First
Homeowners named as defendants the City of Burnaby, Kinder Morgan Canada Inc.,
and B. Cusano Contracting Inc. (“Cusano”).  The endorsement on the writ claimed
that the defendants caused damage to real and personal property of the First
Homeowners through negligent acts or omissions and the escape of oil.

[5]          
The First Homeowners’ Actions are only one part of the litigation
picture arising from the oil spill; there are a total of 35 lawsuits brought in
relation to the oil spill.

[6]          
Other litigation includes litigation brought by Trans Mountain Pipeline
LP, Trans Mountain Pipeline Inc. (together “Trans Mountain”), and Kinder Morgan
Canada Inc. (“Kinder Morgan”) against the City of Burnaby, R.F. Binnie,  Cusano
, and John Doe (the “Trans Mountain Action”).  This litigation was commenced on
December 20, 2007, in the Vancouver Registry as Action No. S078716.  The
plaintiffs in the Trans Mountain Action assert that Trans Mountain and Kinder
Morgan owned and operated the pipeline, respectively.  They  claim that the
City of Burnaby engaged R.F. Binnie to oversee a storm sewer upgrade, who then
engaged Cusano to provide excavation services. In short, it is alleged that the
City of Burnaby, R.F. Binnie, and Cusano were negligent and caused the rupture
of the oil pipeline in the course of work for the storm sewer upgrade.

[7]          
In the Trans Mountain Action, the plaintiffs seek damages, including
damages for their legal costs and third party claims in relation to actions
threatened or initiated against them due to the oil pipeline burst.  In this
way, the Trans Mountain plaintiffs seek damages against R.F. Binnie and others,
for any claims of the Homeowners against the Trans Mountain plaintiffs.

[8]          
The City of Burnaby has also commenced litigation against Trans
Mountain, Kinder Morgan, R.F. Binnie, and Cusano and related parties, in
the Vancouver Registry as Action No. S095214 (the “City of Burnaby
Action”).  That action was filed on July 14, 2009.  In the City of Burnaby
Action, the City of Burnaby claims that R.F. Binnie assumed all liability
and is responsible to indemnify the City of Burnaby for all costs and damages
relating to the City of Burnaby’s defence of all claims for damages arising
from the oil pipeline rupture.

[9]          
I will describe the Trans Mountain Action and City of Burnaby Action as
the “Commercial Litigation”.

[10]       
In addition, counsel for the First Homeowners commenced a second set of
homeowners’ claims on January 21, 2008 (the “Second Homeowners’ Actions”).  In
the Second Homeowners’ Actions, new homeowner plaintiffs made claims against
the same defendants as in the First Homeowners’ Actions, and against additional
defendants, including R.F. Binnie. I will refer to the plaintiffs in the
First and Second Homeowners’ Actions as “the Homeowners”.

[11]       
The entire litigation arising out of the oil spill was assigned to me to
case manage in April 2009.

[12]       
At a Case Management Conference on March 30, 2010, I made an order that
all of the related actions be tried at the same time, with evidence in one
action to be evidence in the others.  At the same time, I made certain
directions with respect to closing the pleadings.  These directions included a
direction that notice of any motion adding parties be given by June 30, 2010.

[13]       
As of the March 30, 2010 Case Management Conference, no examinations for
discovery had yet taken place.  In the Commercial Litigation, the parties were
still in the throes of their extensive document discovery.

[14]       
At the same Case Management Conference, counsel for the Homeowners
advised the court and the other parties that he would be seeking to add R.F.
Binnie as a defendant to the First Homeowners’ Actions.  It was agreed that if
this did not get sorted out by consent, then counsel for the Homeowners would
give notice of any application to do so by June 30, 2010.

[15]       
Also at the March 30, 2010 Case Management Conference, I was advised
that the parties to the Commercial Litigation were making some efforts to
resolve the Homeowners’ Actions before trial.

[16]       
Counsel for the Homeowners was unable to obtain the consent of
R.F. Binnie to add it as a party to the First Homeowners’ Actions. 
Therefore, the First Homeowners brought an application dated April 30, 2010, to
add R.F. Binnie as a defendant to the First Homeowners’ Actions.  All of the
other parties did not oppose the application, with the exception of
R.F. Binnie, who does oppose the application.  This is the application
that was heard by me on June 21, 2010.

Legal Test for Adding a Party

[17]       
Rule 15(5)(a) provides as follows:

(5)(a)  At any stage of a proceeding, the court on
application by any person may

(i)  order that a party, who is not
or has ceased to be a proper or necessary party, cease to be a party,

(ii)  order that a person, who
ought to have been joined as a party or whose participation in the proceeding
is necessary to ensure that all matters in the proceeding may be effectually
adjudicated upon, be added or substituted as a party, and

(iii)  order that a person be added
as a party where there may exist, between the person and any party to the
proceeding, a question or issue relating to or connected

(A)  with any relief claimed in
the proceeding, or

(B)  with the subject matter of
the proceeding,

which in the opinion of the court it would be just and
convenient to determine as between the person and that party.

[18]       
R.F. Binnie argues that the limitation period to bring a claim against
it in relation to the oil spill expired two years after the date of the oil
spill: Limitation Act, R.S.B.C. 1996, c. 266, s. 3.

[19]       
There was some hearsay evidence before me filed on behalf of the First
Homeowners to suggest that the running of the limitation period might have been
postponed until the identity of R.F. Binnie and its role was known, pursuant to
ss. 6(3), (4), and (5) of the Limitation Act.  There was not
sufficient evidence before me to determine that issue, and the submissions of
R.F. Binnie proceeded on the basis that the limitation period had expired.  I
have assumed that is so simply for the purposes of this application.

[20]       
The British Columbia Court of Appeal held in Amezcua v. Taylor, 2010
BCCA 128 at para. 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 and the Limitation Act.  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.

[21]       
I will now consider the applicable factors in relation to adding a party
in the context of this case.

Extent of the Delay

[22]       
From the perspective of R.F. Binnie, a two year limitation period with
respect to claims against it arising from the oil spill expired two years after
July 24, 2007.  Further, R.F. Binnie points out that even if the running of the
limitation period was postponed until its identity was known to the First
Homeowners, they must have known about R.F. Binnie’s involvement by at least
January 21, 2008, when the Second Homeowners’ Actions were commenced, naming
R.F. Binnie as a party.  Thus, notice of the First Homeowners’ intention to add
R.F. Binnie as a party was not given until more than two years after both
dates, namely, at the Case Management Conference on March 30, 2010.

[23]       
Our Court of Appeal has noted that the proper time period to assess a delay
on an application such as this, is the limitation period plus one year for
service of the writ: McIntosh v. Nilsson Bros. Inc., 2005 BCCA 297 at
paras. 7-8; Amezcua at para. 40.

[24]       
Here, the notice of the First Homeowners’ intention to seek to add R.F.
Binnie was given on March 30, 2010, and later, by notice of motion dated April
30, 2010.  The motion was argued June 21, 2010.  Given that the oil spill
occurred on July 24, 2007, this was well within the three year period after
which delay is assessed in accordance with McIntosh and Amezcua.

[25]       
In the context of this particular multi-claim litigation, this delay is
inconsequential.  R.F. Binnie has been involved as a key player in this
litigation throughout, and named as a party in the vast number of claims arising
out of the oil spill, including as a party in the Commercial Litigation and the
Second Homeowners’ Actions.

Reasons for the Delay

[26]       
 Counsel for R.F. Binnie submits that the First Homeowners have offered
no reason for the delay in seeking to add it as a defendant.

[27]       
However, in the context of this mega-litigation which I have case
managed, the reason is self-evident.

[28]       
The question of who will be liable for the accident and the oil spill
looms large over the litigation.

[29]       
The document discovery of the parties in the Commercial Litigation is a
mammoth task that has been ongoing.

[30]       
It is fair to say that, in the case management process, the Homeowners have
chosen to ride the coattails of the parties in the Commercial Litigation.  The parties
in the Commercial Litigation have more at stake, are undoubtedly better
financed, and are in a better position to flesh out complex liability issues
than is counsel for the individual Homeowners.

[31]       
Counsel for the First Homeowners has, quite understandably, and to every
other party’s knowledge, been taking a back seat in the litigation.

[32]       
Furthermore, the parties in the Commercial Litigation are trying to
resolve the matter with the individual Homeowners before trial.

[33]       
For this reason, the litigation strategy of the First Homeowners has
been to conserve resources until it is necessary for them to take a step in the
litigation.

[34]       
In many cases, a party’s choice to do little but ride the coattails of
other parties would be risky and might not be a valid excuse for a delay in
adding a party.  But here, where the proposed new defendant is already a key
player in this case managed litigation, named in every other action that is
being tried together with the First Homeowners’ Actions, and the delay is
inconsequential, it does not seem to me to be an unreasonable approach for the
First Homeowners to have delayed until now.  They had not yet filed their statements
of claim and the directions as to the dates for closing pleadings, and adding
parties, were only made on March 30, 2010.

[35]       
I find that the First Homeowners were trying to save litigation costs
and act efficiently, knowing that R.F. Binnie would not be prejudiced if they did
not immediately bring applications to add it as a party.  I consider this to be
a reasonable excuse for the delay that has occurred in bringing this application.

Prejudice

[36]       
R.F. Binnie filed no evidence of prejudice if it were added as a party
to the First Homeowners’ Actions.  The only possible prejudice is the loss of a
limitation period defence, if one is available here.  However, if one considers
the fact that the First Homeowners had two years after the oil spill, plus one
year for service of a fresh writ against the defendant, there is no real
prejudice to R.F. Binnie in this case, as was noted in McIntosh.

[37]       
Furthermore, there is a strong likelihood that R.F. Binnie would be
unlikely to escape liability for damages caused to the First Homeowners simply
by reason of it not being a named defendant by the First Homeowners.   At least
three other key parties, Trans Mountain, Kinder Morgan, and the City of
Burnaby, advance claims against R.F. Binnie, including claims for damages in
the event that these parties are found to be liable to the Homeowners.  In
addition, the City of Burnaby advances a third party claim against R.F. Binnie
in the Trans Mountain Action.  Cusano is planning to do the same.  The
potential liability of R.F. Binnie for any damages caused to the Homeowners
already exists, and adding it as a defendant in the First Homeowners’ Actions
is unlikely to significantly increase its exposure.

[38]       
I conclude that there is no significant prejudice that would be suffered
by R.F. Binnie if it is added as a defendant to the First Homeowners’
Actions.

Extent of Connection

[39]       
The First Homeowners have circulated a proposed statement of claim.  The
facts and subject matter of the pleadings against R.F. Binnie overlap with those
pleaded against the other named defendants.  Clearly the First Homeowners’
claim against R.F. Binnie is not a cause of action that should be tried
separately as it is intimately connected to the central issues of who is
responsible for the oil spill and the damages, if any, suffered by the First
Homeowners.

Overriding Consideration of Justice and Convenience

[40]       
In this case, the delay in seeking to add R.F. Binnie as a defendant was
inconsequential.  None of the parties have been inconvenienced in their conduct
of this massive litigation by the First Homeowners’ decision not to seek to add
R.F. Binnie as a defendant until now.  In this regard, I note that the trial
date for these actions is currently not set to commence until March 2011.  The
First Homeowners’ decision to take minimal steps in the litigation until now
was perfectly understandable in the unusual circumstances of this case,
involving multiple actions being tried together and other parties taking the
lead in the litigation.

[41]       
Further, there is no real prejudice to R.F. Binnie if it were added as a
party.  It is already a party to this massive litigation, one of many key
parties amongst whom potential liability will have to be sorted out.

[42]       
I conclude that it is just and convenient to order that R.F. Binnie be
added as a defendant to this action and the eleven related actions brought by
the First Homeowners.

[43]       
Identical applications were brought in each of the First Homeowners
Actions.  This ruling applies to each.

“S.
Griffin, J.”
The Honourable Madam Justice S. Griffin