IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20120727

Docket: M120037

Registry:
New Westminster

Between:

Donna Haworth

Plaintiff

And

Kevin Haworth

Defendant

And

Her Majesty the
Queen in Right of
the Province of British Columbia and
Argo Road Maintenance (Thompson) Inc.

Third
Parties

Before:
Master Keighley

Reasons for Judgment

[1]            
The plaintiff seeks the following orders:

1.       Her
Majesty the Queen in Right of the Province of British Columbia be added as a
defendant to the action;

2.       Argo
Road Maintenance (Thompson) Inc. be added as a defendant to the action;

3.       the
style of cause be amended accordingly;

4.       the
plaintiff be at liberty to file an Amended Notice of Civil Claim in the form
attached as Exhibit A to the Notice of Application.

Background

[2]            
The plaintiff’s action arises out of a motor vehicle accident which
occurred on November 12, 2007. The plaintiff was a passenger in a vehicle being
driven by her husband, the defendant Kevin Haworth, when, about five miles
south of Kamloops, British Columbia, Mr. Haworth lost control of the
vehicle on the icy roadway. The plaintiff alleges that she suffered a
concussion, injuries to her back, neck, shoulders, hips and wrists.

[3]            
The plaintiff reported her claim to the Insurance Corporation of British
Columbia on or about November 20, 2007 and retained Mr. Sarando Matheos to
represent her interests on or about January 18, 2008.

[4]            
On February 18, 2008, Mr. Matheos received a copy of the police
report together with a sketch of the accident scene. The officer’s notes
indicate “road ‑ extremely icy”.

[5]            
Mr. Matheos commenced this action on behalf of the plaintiff on
May 22, 2009, naming only the plaintiff’s husband, Kevin Haworth, as
defendant. In due course the Writ of Summons and Statement of Claim were served
upon the Insurance Corporation of British Columbia and the defendant, and
thereafter a Defence was filed on behalf of the latter. The Statement of
Defence pleaded “inevitable accident”.

[6]            
On March 9, 2010, counsel for the Defendant Haworth issued a Notice to
Mediate.

[7]            
On August 25, 2010, Mr. Matheos received a copy of the police file
released pursuant to a consent order which contained some comments criticizing
the standard of winter road maintenance.

[8]            
The mediation took place on September 30, 2010 but was unsuccessful.
Examinations for discovery of the plaintiff were conducted by counsel for the
defendant on January 20, 2011 and February 8, 2011. On March 1, 2011, a Notice
of Trial was filed scheduling a five-day trial commencing September 17, 2012.
In the first week of May 2011, counsel for the defendant Haworth agreed to a
voluntary mediation.

[9]            
On May 12, 2011, counsel for the defendant Haworth delivered an
application to add Her Majesty the Queen in Right of the Province of British
Columbia (“HMTQ”) and Argo Road Maintenance Inc. (“Argo”) as Third Parties to
the action.

[10]        
In response to the application, Mr. Matheos wrote to counsel for
the defendant Haworth and the other parties, indicating that he took no
position with respect to the application and that he reserved the right to add
HMTQ and Argo as defendants to the action given the allegations of negligence
raised by the defendant Haworth. Mr. Matheos further indicated that, as
his office received the police file on August 19, 2010, he took the position
that the limitation period with respect to any claim against HMTQ and Argo ran
from that date and that, accordingly, the limitation date against those parties
had not yet run. Mr. Matheos concluded by indicating that he was not
taking steps to add HMTQ and Argo as parties at that time in light of the
upcoming examination for discovery of the defendant Haworth and the voluntary
mediation anticipated to take place shortly thereafter.

[11]        
On July 19, 2011, the defendant Haworth made his application to add HMTQ
and Argo as third parties. The application was unopposed and the order was
granted.

[12]        
The further mediation to which the plaintiff and defendant Haworth were
scheduled to proceed on October 27, 2011 did not take place. Argo declined to
participate, taking the position that it had not been properly named in the
Third Party proceedings. Apparently, Argo was struck from the register on
October 15, 2007 for failure to file annual reports and had been replaced in
its highway maintenance role by Argo Road Maintenance (Thompson) Inc. (“Argo
Thompson”).

[13]        
On February 2, 2012, the defendant Haworth, without leave, amended the
Third Party Notice, renaming Argo Thompson as a Third Party. Argo Thompson
takes the position that the Third Party Notice as amended is a nullity. Counsel
for Argo Thompson advises that he will be bringing an application to set aside
the Amended Third Party Notice.

[14]        
This application was brought by the plaintiff Donna Haworth on May 3,
2012. The relief sought is opposed by HMTQ and Argo Thompson.

Legal basis for the application

[15]        
The application is brought pursuant to Rule 6-2(7)(c) which reads:

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

…

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

(i)  any relief claimed in the
proceeding, or

(ii)  the subject matter of the
proceeding

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

[16]        
The jurisdiction conferred by the Rule is discretionary.

[17]        
The Rule establishes a two-step test. First the applicant must show that
there exists a question or issue between her and the proposed defendant which
relates to the relief claimed in or the subject matter of the proceeding. The
threshold established by this branch of the test is a relatively low one which
has been expressed as simply satisfying the Court that there exists a real
issue between the parties which is not frivolous or that the applicant has a
possible cause of action against the proposed party: Strata Plan VIS3578 v.
Canan Investment Group Ltd., [2010] B.C.J. No. 1280, 6 B.C.L.R. (5^th)
31. This branch of the test may simply be satisfied by reference to the
proposed amended pleading. Supplementally, the applicant may present affidavit
evidence addressing the issue. In the latter case, the Court is not obliged to
weigh the evidence presented with a view to determining whether the allegations
against the proposed party may be proved, but merely considers whether the
evidence supports the possibility that a real issue exists between the parties.

[18]        
In this case, the claimant proposes amending her pleadings to include
the following allegations against HMTQ and Argo Thompson:

Part 1:

4.         At the relevant time, the Defendant, Her Majesty
the Queen In Right Of the Province of British Columbia (“HMTQ”) had a duty and
obligation to inspect, service and maintain the subject highway under the
provisions of the Transporation [sic] Act, RSBC 2004, c. 44.

5.         At all relevant times HMTQ delegated its duties to
inspect service and maintain the subject highway to the Defendant, Argo Road
Maintenance (Thompson) Inc. (“ARGO”).

6.         ARGO is a company with a registered and records
office at 700-275 Lansdowne Street, Kamploops [sic], British Columbia, V2C 6H6.

7.         The Defendants, HMTQ and ARGO owed a duty of care
to the Plaintiff and other users of the highway to inspect, service and
maintain the highway in a safe and serviceable condition.

8.         The Defendants, HMTQ and ARGO breached their duty
of care by failing to inspect, service or maintain the highway in a safe and
serviceable condition.

Part 3

2.         The accident was caused or materially contributed
to by the negligence of the Defendants, HMTQ and ARGO, particulars of which are
as follows:

.1         Failure to properly
inspect the highway at the location of the subject accident for the presence of
ice when under a duty to the Plaintiff and others to do so, and when they know
[sic] or ought to have known that in failing to do so the Plaintiff and other
users of the highway would be at risk;

.2         Failure, without lawful
excuse, to notice and identify the icy conditions of the highway, while under a
duty to identify the icy conditions when they know [sic] or ought to have known
that failure to notice and identify the icy conditions would put the Plaintiff
and other users of the highway at risk;

.3         Failing, without lawful
excuse, to properly maintain the highway in a state reasonably free of ice at
the location of the subject accident when under a duty to the Plaintiff and
other users of the highway to do so, when HMTQ and ARGO knew or ought to have
known that in failing in their duties, the Plaintiff and others would be at
risk of a collision and injury;

.4         Failing to adequately warn
the Plaintiff and other users of the highway of the presence of a hazard of
ice, hidden or otherwise on the highway at the location of the accident when
HMTQ and ARGO were under a duty to so warn;

.5         In general failing to
maintain the highway in a safe condition for users of the highway and to take
adequate measures in that regard;

.6         As against ARGO, failing
to provide adequate direction, control and supervision of its employees and
agents to see that the duties of ARGO to inspect the highway and maintain
highway safety were properly carried out;

.7         As against HMTQ. failing
to properly inspect, direct, control and supervise ARGO in ARGO’s delegated
highway safety and maintenance duties;

.8         The negligence of the Defendants, HMTQ and ARGO
caused or contributed to the Defendant Driver’s ability to properly control his
vehicle.

[19]        
I am satisfied that the proposed pleadings establish that there may
exist between the claimant and the proposed defendants a real issue, namely the
alleged breach of duty to adequately maintain the highway on the day of the
accident. While the liability of either of the proposed defendants is not
obvious, I cannot say that the proposed claims are frivolous or that they may
not form the basis of possible claims against the proposed defendants.

[20]        
With respect to the second branch of the test, I am obliged to determine
whether it would be just and convenient to resolve those common issues between
the parties in this proceeding. Again, the authority granted by the Rule is
discretionary.

[21]        
In the case of Letvad v. Fenwick (2000), 82 B.C.L.R. (3d) 296,
49 C.P.C. (4^th) 1, the Court set forth a
non-exhaustive list of factors to be considered in the exercise of the Court’s
discretion. They include:

1.       the
extent of the delay;

2.       the
reasons for the delay;

3.       any
explanation put forward to account for the delay;

4.       the
degree of prejudice caused by the delay;

5.       the
extent of connection between the existing claims and the proposed cause of
action.

[22]        
The Court went on to say that voluntary dilatory behaviour will not
necessarily bar the addition of new parties.

[23]        
As to the issue of prejudice, a presumption of prejudice arises if the
limitation period governing the claims advanced against the proposed defendant
has expired: Letvad, supra. The possibility of a limitation
defence is a significant but not a determinative consideration.

[24]        
For the purposes of this application, I am assuming that the limitation
period with respect to the plaintiff’s claims expired on November 12, 2009. The
question of whether the limitation period only began to run with respect to
these proposed defendants on August 19, 2010, when Mr. Matheos first had
an opportunity to review the police file, was referred to, but not strenuously
argued by counsel for the plaintiff on this application. The resolution of that
issue does not affect the outcome of this application, as the reader will see.

[25]        
The expiration of a limitation date is, of course, only one factor to be
taken into account in the determination of whether it is just and convenient in
the circumstances of the particular case to add the proposed party or parties.
I now turn to a consideration of the Letvad factors.

The extent of the delay

[26]        
The accident occurred on November 12, 2007. This action was commenced on
May 22, 2009. The application to add these defendants was filed and delivered
on May 3, 2012, some three years after the action was commenced, four years and
six months after the date of the accident and two years and six months after
the expiration of the two-year limitation period. Clearly, the delay has been
significant.

Reasons for the delay and any explanation advanced

[27]        
Mr. Matheos was retained as counsel for the plaintiff on January
18, 2008. On February 18, 2008, he received a copy of the RCMP report
which indicated, as previously noted, “road – extremely icy”. On February 20,
2008, Mr. Matheos received a copy of his client’s statement to ICBC which
included the following:

The roads were icy and my husband
was driving too fast for the conditions – as a result, he lost control of the
vehicle …

[28]        
Mr. Matheos says that at the time he commenced the action on behalf
of the plaintiff, he did not give any thought to including other parties as
defendants as he believed the only responsible party was the driver husband. On
March 10, 2010, the defendant Haworth filed his Defence and from that point Mr. Matheos
was aware that the defendant was pleading “inevitable accident”. In preparation
for the mediation scheduled for September 2010, Mr. Matheos received a
copy of the RCMP file. The officers’ notes contained the following:

note: road conditions from approximately 10 km up the coquihalla
were extremely slippery. there was a light rain/sleet contributing to the icy
conditions with a 40+ kmh wind. at the 10 km mark the roads went from wet from
rain to ice.

…

driver, kevin haworth was very emotional and advised cst.
price he was southboutnd [sic] and when he slowly applied the gas, the vehicle
went to a lower gear and spun on the roads he believed were ok, lost control
and hit the east ditch and rolled.

…

No injuries, BC Amb. attended +
they turned down medical attention. (Both were wearing seatbelts). Mikes
[sic] Towing attended + towed. Argo requested again. They finally arrived at
1820. Their lack of response to these extremely icy road conditions should be
addressed.

[29]        
I note, from the time of the accident set forth in the police report and
in the statement of the defendant Haworth, that Argo’s attendance at the
accident scene would have been approximately one hour after the time of the
accident.

[30]        
Mr. Matheos reviewed the police file after receiving it. He
deposes:

… It did not occur to me at
that time, notwithstanding the reference to Argo and the RCMP officers [sic]
concern regarding Argo’s lack of response to the icy condition, to bring an
application to add Argo Road Maintenance Inc. as a defendant to the action. I
simply did not consider the issue at that time.

[31]        
On May 12, 2011, counsel for the defendant Haworth delivered an
application to add HMTQ and Argo as third parties. In response to the
application, Mr. Matheos wrote as follows:

Please be advised that while it is the plaintiff’s position
that the defendant is at fault for the collision, she reserves the right to
make application to add as defendants, Her majesty the Queen in Right of the
Province of British Columbia and Argo Road Maintenance Inc., given the
allegations of negligence raised by the defendant, Haworth.

The RCMP file was received by us on August 19, 2010. This was
the first notice to the plaintiff of any potential negligence of additional
parties. In the circumstances, we view the limitation period to have commenced
to run from the date of receipt of the Police file.

We are not taking steps at this
time to add parties inasmuch as we have a discovery of the defendant, Haworth,
proceeding on July 20, 2011 and a mediation anticipated to take place soon
thereafter.

[32]        
Following the successful application by counsel for the defendant Haworth
to add HMTQ and Argo as Third Parties, and the issuance of the Third Party
Notice, Mr. Matheos deposed:

… I did not at that time seek
to bring an application to add Her Majesty the Queen in Right of the Province
of British Columbia or Argo as defendants to the action as I was aware that
mediation was being discussed between all parties and I thought that if the
matter could be resolved at mediation it would not be necessary to pursue the
application.

[33]        
As earlier indicated, an issue then arose as to whether the defendant
Haworth had erred in adding Argo rather than Argo Thompson as a defendant Third
Party. With respect to the emergence of this issue, Mr. Matheos deposed:

In hindsight, I should have
pursued the application at that stage; however, I did not do so; nor did I
discuss the issue with the Plaintiff at the time. I knew that it may ultimately
be necessary to seek to add Argo and Her Majesty the Queen in Right of the
Province of British Columbia as defendants. However, because of the efforts
that were being made to schedule mediation involving all parties, I did not
pursue the application at that time; nor at any time prior to late March 2012
when I discovered that in spite of efforts to set an earlier date for
mediation, the mediation was not going to be done until August 2012.

[34]        
From the material before me, it appears that by March of 2012 Mr. Matheos
had formed the opinion that he could wait no longer to bring on this
application. He did so in May.

[35]        
The proposed defendants say that the only explanation for the delay is
that Mr. Matheos, at least until March of this year, was of the opinion
that the defendant Haworth was the only possible defendant. Although the
limitation period had expired 18 months prior to the bringing of this
application he did nothing during that interval or prior to its expiration to
pursue his client’s potential claims against them. They say that this
application should be dismissed.

[36]        
The plaintiff says that her counsel’s failure to expeditiously apply to
name the proper defendants was a failure in which she was not complicit and at
most was an error of judgment or solicitor inadvertence which has been accepted
by this Court in the past as a reasonable explanation for delay. Moreover, says
the plaintiff, she should not be prejudiced by the conduct of her solicitor unless
the result is “irremediable prejudice” to the proposed defendant.

[37]        
With respect to the latter point it should be noted that, for the
purpose of determining prejudice to a potential party, the interval represented
by the duration of the limitation period plus an additional year to serve the
writ is not considered to give rise to prejudice: McIntosh v. Nilsson Bros.
Inc., 2005 BCCA 297. That takes one, then, to November 2010, as the date
after which delay on the part of the applicant requires explanation.

[38]        
With a view to interpreting the events following that date in a manner
most favourable to the plaintiff, it might be said that Mr. Matheos’
initial failure to recognize the possibility of a suit against the deposed
defendants was the result of solicitor inadvertence or an error of judgment. By
his own evidence, Mr. Matheos was aware of a possible claim against these
proposed defendants by August of 2010 and yet he did nothing to pursue claims
against them. Although he does not specifically say so, it seems possible that Mr. Matheos
sought to avoid the cost of an application in light of what he perceived,
perhaps somewhat optimistically, as a very real possibility that the case might
settle, either following discoveries or following the upcoming mediation. The
goal of saving litigation costs and obtaining evidence to improve settlement
prospects have both been held to be legitimate objects and worthy explanations:
Tundra Helicopters Ltd. v. Allison Gas Turbine, 2002 BCCA 145,
98 B.C.L.R. (3d) 238; and Amezcua v. Taylor, [2010] B.C.J. No. 436,
3 B.C.L.R. (5^th) 255. It is equally possible that Mr. Matheos realized,
in the context of the delay which had occurred, he would likely face opposition
on an application to join further defendants and sought, by pursuing
settlement, to avoid a possible, unfavourable, result. His delay certainly
seems to run counter to prudent practice, which would seem to require the
taking of all reasonable and necessary steps to secure the client’s claim,
regardless of the litigation strategy. In all, while I am satisfied that Mr. Matheos
has offered an explanation for his delay, his explanation is not entirely
reasonable. On the other hand, it appears that the plaintiff herself is
blameless with respect to the delay, and ultimately the issue of prejudice to
the proposed defendants may be determinative.

The degree of prejudice caused by the delay

[39]        
There is, as previously confirmed, a presumption of prejudice if a
proposed defendant will be deprived of a limitation defence by his addition as
a party. Also, as previously indicated, the relevant period during which
prejudice is to be assessed is that which follows the expiration, in this case,
of the three year period following the date upon which the cause of action
arose. The plaintiff will certainly suffer prejudice if her application is
dismissed. She will lose a possible claim against a party or parties with
potential liability. This issue, Wilson J. indicates in Walsh v. Blair,
Vancouver Registry, Action No. M015646, BCSC, said as follows:

[22]      There is prejudice to
the plaintiff in that if the application is not allowed, she will lose a right
to claim against a party with potential liability. As noted in Takenaka v.
Stanley (2000), 91 B.C.L.R. (3d) 179 (S.C. Master), that will usually
outweigh the loss of a potential limitation defence to a potential defendant.
Generally, the courts are reluctant to deprive a plaintiff of his or her day in
court, so that the trend in the cases appears to be that it will take more than
theoretical prejudice to outweigh the loss of that potential claim.

[40]        
The plaintiff’s potential peril becomes more significant when one
considers that, should the application be dismissed, and should the present
defendant succeed on the issue of unavoidable accident, she will be left without
remedy although blameless with respect to the circumstances of the accident.

[41]        
Neither Her Majesty the Queen or Argo Thompson allege, as is often the
case in such applications, that they have been prejudiced by an inability to
investigate the claims against them. HMTQ has, of course, been aware of the
potential claim since May 12, 2011 when the application to add the Third Parties
was brought. There was no evidence of any investigation conducted by HMTQ after
that date to the present. While it seems likely the government representatives
would have discussed the potential claim with representatives of Argo Thompson
at an early date, there is no evidence of that and I can make no such assumption.
With respect to its investigation, Argo Thompson says as follows (and
this appears in Affidavit No. 2 of Yvonne Van Vliet, a paralegal in
the employ of Argo Thompson’s counsel):

14.       Attached as Exhibit “J” to this affidavit is a true
copy of the timecard signed by plough operator Chris Jones on November 12,
2007. Mr. Jones’ timecard indicates that he commenced his shift at 5:00
p.m., on November 12, 2007 and worked until 4:25 a.m., on November 13, 2007. On
his timecard he recorded applying 41 cubic meters of winter abrasive (activity
310B) to the Coquihalla Highway during his shift.

15.       On May 22, 2012 I was
informed by Tom Bone, General Manager for Argo, during a teleconference, that
Chris Jones has not been employed with Argo since 2008, nor has Argo been in
contact with him since 2008. Furthermore, Mr. Bone informed me that Argo
is not aware of Chris Jones’ current address or contact information.

[42]        
There is no indication that Mr. Jones cannot be found, what
reasonable steps have been taken to locate him, or even whether his evidence,
beyond that contained in the records, is required for the defence of these
claims. With respect to records, there is no evidence to suggest that any are
missing or have been destroyed.

Conclusion

[43]        
In the circumstances, I find that there is no prejudice to these
proposed defendants in making the order sought, whereas the potential prejudice
to the plaintiff, should she be deprived of potential claims, is overwhelming.
An order will go in the terms of the application. Costs will be in the cause.

“Master Keighley”