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April 4, 20126

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Law Times • apriL 4, 2016 Page 15 CASELAW small claims court with respect to contingency fee arrangements but it did not oust jurisdiction of small claims court with respect to written retainer agreements. Court was bound by stare decisis to follow decision. Court had jurisdiction to hear and consider plaintiff 's case. Whitford v. Backman (Jan. 12, 2016, Ont. S.C.J., Donald J. Lange D.J., Lindsay SC-13-73- 0000) 262 A.C.W.S. (3d) 646. Crown ACTIONS AGAINST CROWN Motion to strike claim alleging breach of contract and negligence by RCMP granted in part Plaintiff was former officer of RCMP. Plaintiff asserted she and her female colleagues were sub- jected to sexual discrimination, bullying, and harassment by male members of RCMP between 1986 and 2009. Plaintiff asserted she, fellow female officers and female civilian members of RCMP were victims of sexual harassment and sexual discrimination by RCMP as institution, for which defendant was liable. Plaintiff brought pro- posed class action in negligence and for breach of employment contract. Defendant brought mo- tion to strike claim without leave to amend and to have claim dis- missed for failure to disclose rea- sonable cause of action. Motion granted in part. Claim in contract was struck. Plaintiff could deliver fresh as amended statement of claim deleting breach of contract claim. It was plain and obvious that plaintiff and class members did not have breach of employ- ment contract action against Crown. In employment matters plaintiff and class members were left with grievance procedure pro- vided by statute and with right to collectively bargain. It could not be determined on motion wheth- er claim was statute-barred. It was arguable based on pleadings that limitation period did not begin to run until later because plaintiff was incapable of commencing ac- tion because of her physical, men- tal or psychological condition. Plaintiff 's claim disclosed reason- able cause of action meeting first criterion for certification. It was not plain and obvious that what counted as Crown's vicarious li- ability under Crown Liability and Proceedings Act (Can.) did not include systemic negligence claim pleaded by plaintiff. Crown's argu- ment that there was no viable vi- carious liability negligence claim was incorrect. RCMP was not itself legal entity capable of being sued as institution. Under act, Crown could only be vicariously liable, not directly liable, for misconduct of individual Crown servants. Plaintiff adequately pleaded claim against collective of all male police officers and all male civilian mem- bers of RCMP during class pe- riod and her systemic negligence claim was sound claim for which Crown was vicariously liable. Davidson v. Canada (Attor- ney General) (Dec. 22, 2015, Ont. S.C.J., Perell J., CV-15- 42473600CP) 262 A.C.W.S. (3d) 648. Insurance LIABILITY INSURANCE Insurer had duty to defend municipality Defendant municipality con- tracted with defendant main- tenance company to do snow removal on municipal roads. Contract required company to obtain liability insurance for municipality as additional insured in respect of all opera- tions performed by or on behalf of company. A died in motor vehicle accident on snowy day in municipality. Plaintiffs, fam- ily member of A, brought action against defendants alleging neg- ligence in road design and main- tenance, as well as failing to close road or warn public of danger. Municipality brought motion for declaration that company's insurer had duty to defend mu- nicipality against all of plaintiffs' claims. Motion was dismissed. Municipality appealed. Appeal allowed. Municipality was ad- ditional insured under policy and policy contained unquali- fied promise to defend insured for actions covered by policy. Insurer was obligated to pay rea- sonable costs of municipality's defence of covered claims, even if defence furthered defence of uncovered claims, but it was not obligated to pay costs related solely to defence of uncovered claims. Allegations in statement of claim triggered duty to defend municipality. Nothing in insur- ance policy qualified insurer's duty to defend. Insurer did not satisfy duty to defend munici- pality by defending company. Insurer's best interests did not negate its obligation to munici- pality. Duty to defend was sepa- rate contractual obligation that was not met by insurer simply in- demnifying municipality at end of day. Having regard to insurer's unqualified contractual under- taking to defend municipality and conf lict between interests of municipality and company and between municipality and insurer, motion judge should have ordered insurer to provide municipality with independent counsel at insurer's expense and defend action in its entirety. Insurer was entitled to seek ap- portionment of defence costs to extent they dealt solely with uncovered claims or exceeded reasonable costs associated with defence of covered claims. Carneiro v. Durham (Regional Municipality) (Dec. 22, 2015, Ont. C.A., G.R. Strathy C.J.O., H.S. LaForme J.A., and G. Hu- scroft J.A., CA C60366) Deci- sion at 253 A.C.W.S. (3d) 197 was reversed. 262 A.C.W.S. (3d) 731. Professions ACCOUNTANTS No special relationship existed between auditors and lenders Bank-led syndicate of lenders made loan to company in reli- ance on audited financial state- ments and audit opinions. Ac- counting fraud was discovered, statements were revised to ref lect substantially lower net earnings and company eventually initi- ated insolvency proceedings. Receiver, bank and purchaser of some of debt brought action in contract and negligence against auditors. Auditors brought mo- tion for partial summary judg- ment dismissing negligent mis- representation claim. Motion granted. When preparing corpo- ration's financial statements, ac- countants and auditors owe duty of care to corporation and share- holders. Foreseeable that cor- poration and shareholders will reasonably rely on statements for purposes for which they were prepared. While foreseeable that others, including investors, creditors and lenders, will rea- sonably rely on statements for other purposes, imposition of duty of care to them would en- tail unacceptable indeterminate liability. Fact-based exceptions to rule exist where spectre of in- determinate liability eliminated. Trial not necessary in this case to resolve competing positions of lenders and auditors. No spe- cial relationship existed between auditors and lenders. Auditors' knowledge about lenders was indeterminate. Auditors only knew that lenders would be re- quired to finance company's ac- quisition plans and operations and that they would read finan- cial statements. Findings of fact showed no genuine issue for trial that bank did not have legally tenable negligent misrepresenta- tion claim, because auditors did not owe duty of care to lenders. Canadian Imperial Bank of Commerce v. Deloitte & Tou- che (Dec. 10, 2015, Ont. S.C.J., Perell J., 00-CV-201162CP) 262 A.C.W.S. (3d) 781. PHYSICIANS AND SUR- GEONS Pediatricians did not fall below required standard of care Plaintiffs brought three-week old child to emergency depart- ment of PAGH in 1995. Child's right thigh was swollen. First pediatrician treated child at PAGH and transferred child to second pediatrician who treated child at HSC. Child had osteo- myelitis and septic arthritis that destroyed head of his femur and his hip joint. Child was now 20 and did not have hip. Plaintiffs sued pediatricians for damages for negligence for failing to di- agnose and arrange treatment. Action dismissed. Pediatricians did not fall below required stan- dard of care. Plaintiffs failed to establish that first pediatrician fell below standard of care re- quired of community general pediatrician. First pediatrician considered possibility of both diagnoses during his assessment and care of child. To assess for septic arthritis first pediatrician checked child's hip movements each day and diagnostic testing did not indicate bone involve- ment. Situation was uncertain because child was partially re- sponding to antibiotics and CT scan revealed multi-loculated mass. Expert agreed that deci- sion to transfer child to HSC was reasonable. Failure to include osteomyelitis/septic arthritis as differential diagnoses on admis- sion did not fall below required standard of care. Second pe- diatrician did not fall below re- quired standard of care in sched- uling or reviewing MRI. Second pediatrician was unable to tes- tify and was not cross-examined about what his interpretation would have been of MRI had he reviewed scan. None of other pe- diatric surgeons offered opinion on what they observed on MRI films. Plaintiffs did not prove that unfavourable outcome would have been avoided with earlier diagnosis and treatment. Ratz v. Desa (Dec. 10, 2015, Ont. S.C.J., W.D. Newton J., Thunder Bay CV-13-0326) 262 A.C.W.S. (3d) 793. Ontario Criminal Cases Breathalyzer REFUSAL TO PROVIDE SAMPLE Officer was not obliged to afford accused further opportunity to comply with screening device demand Police officer pulled over ac- cused's vehicle and made Ap- proved Screening Device (ASD) demand, explaining and dem- onstrating procedure of pro- viding suitable breath samples. After three failed attempts to provide suitable breath sample, officer cautioned accused about consequences of failing to pro- vide suitable sample. Accused told officer that he could not provide suitable sample because of heart condition, and also mentioned claustrophobia. Of- ficer allowed accused to step out of vehicle before fifth attempt. Officer advised accused on sixth attempt that it was his last chance. After sixth failure, of- ficer contacted paramedics who performed some checks before releasing him at scene. Accused was convicted of refusing to provide breath sample. Accused appealed. Appeal dismissed. Of- ficer was not obliged to afford accused further opportunity to comply after administration of medical attention. Officer did not conclude that accused's ex- cuses were legitimate enough to warrant medical attention but rather, based on his observa- tions, concluded accused was merely seeking excuse for not blowing into ASD. Officer act- ed out of abundance of caution rather than any belief that com- plaints were legitimate. Informa- tion that accused did not have heart problems conveyed by paramedics negated any obliga- tion to offer accused last chance to provide sample. In first three attempts, accused sucked in air rather than blowing out into ASD and in other three, he placed mouth on mouthpiece but did not blow in. There was ample evidence to support trial judge's conclusion that accused inten- tionally failed to comply with of- ficer's repeated demands. Officer advised on sixth attempt that he was being given last chance to blow. Accused's refusal to blow into ASD was final and unequiv- ocal. Accused's failure to request another chance showed he was not particularly interested in being given one. Trial judge did not misapprehend evidence in concluding that accused failed to comply with ASD demand. R. v. Camalalingham (Jan. 25, 2016, Ont. S.C.J., André J., Brampton SCA(P) 612/14) 127 W.C.B. (2d) 231. Evidenc e HEARSAY Even without admission of hear- say statement, judge would have accepted complainant's evidence Accused faced charges arising from three alleged sexual as- saults on complainant, who was 13 years old at time of assaults and was sister of accused's then- partner. Crown asked mother about telephone conversation she had with her daughter sister of complainant, where sister told her mother that she saw accused on top of complainant. Crown said at time that hearsay state- ment from sister was being ten- dered for narrative purposes only. However, at end of trial, Crown changed his position and argued that statement could be used to prove sister's state of mind and that she was present during third event. Trial judge ruled in favour of Crown and referred to state- ment in his reasons for conviction on third incident, but stated he was convinced even without this circumstantial evidence. Crown conceded that trial judge erred in admitting into evidence and relying on sister's hearsay state- ment to mother but argued deci- sion could be saved by curative proviso. Accused appealed his convictions. Appeal dismissed. Trial judge explicitly stated that even without hearsay statement he would have accepted evidence of complainant that her relation- ship with her sister changed be- cause her sister believed she had consented to sexual contact with accused. Accused's denial of any change in their relationship was not credible because complain- ant went into foster care follow- ing incident and was not visiting her sister. As well, there was evi- dence from mother of change in relationship between her daugh- ters. There was no basis to reject trial judge's statement of his view and his findings. It was therefore proper case to apply proviso. R. v. H. (M.R.) (Dec. 7, 2015, Ont. C.A., F. Feldman J.A., Eileen E. Gillese J.A., and David Watt J.A., CA C55928) 127 W.C.B. (2d) 328.

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