Plaintiffs’ written reply filed in Metro Taxi vs Ottawa

“NEGLIGENCE: Duty of Care”

Conway Lititgation, counsel for the plaintiffs in Metro Taxi vs City of Ottawa, has filed its Plaintiffs’ reply to written submissions with Justice Marc Smith.

The excerpt below is the opening section, “Negligence,” which contains eight sub-sections discussing “Duty of Care.” Taxi News has removed some of the notations and footnotes to make the legal document easier for readers to view; however, the full document exactly as filed by Conway is attached available at the bottom of this article as a .pdf file.

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The City mischaracterizes its duty of care

Throughout its submissions, the City characterizes the duty of care at issue as a duty to protect plate values or the economic interests of the plaintiffs. This characterization is wrong. The plaintiffs’ claim has always been, and still is, that the City had a duty to take reasonable care in its enforcement of the 2012 By-law.2 The fact that the City’s failure to meet the required standard of care caused damage to the plaintiffs does not transform a duty of care rooted in enforcement into a duty to protect plate value.

The City distorts the duty of care framework

In its submissions, the City also distorts the governing principles regarding the duty of care in negligence law established by the Supreme Court in Imperial Tobacco and Cooper. 3. At paragraph 259, the City argues that there is no need for this Court to conduct a complete Anns/Cooper analysis, on the basis that the plaintiffs’ negligence claim falls into the pure economic loss category of the independent liability of statutory public authorities.

In doing so, the City asks this Court to set aside the first Anns/Cooper stage and jump to a conclusion that there is no proximity. This is not the law. 1 Defendant’s submissions at paras 10, 540. 2 Plaintiffs’ submissions at para 182. 3 Defendant’s submissions at para 259, citing Eisenberg v Toronto, 2019, ONSC 7312 at para 97. -2-

The Supreme Court of Canada has consistently held that the categories of pure economic loss are merely “analytical tools” and not “categories of proximity”. The standalone invocation of a pure economic loss category “offers no substitute”5 for a rigorous proximity analysis. These two concepts should not be conflated.

Notably, the pure economic loss category of the independent liability of statutory public authorities addresses the government’s “unique public power to convey certain discretionary benefits”, such as by-law enforcement.

There is no single set of factors applicable to this category

Each case must be assessed for proximity on its own unique set of facts. As such, this Court must undertake a full Anns/Cooper analysis. 6. At paragraph 367, the City argues that a proximate relationship between a public authority and a plaintiff may only exist where their interactions “go beyond the ordinary scope of the regulatory relationship”. To support this proposition, at paragraph 371 the City relies on a statement from the 2009 Court of Appeal decision in River Valley Poultry Farm to the

However, the City fails to mention that the Court of Appeal in Aylmer explicitly disapproves of River Valley Poultry Farm in the very paragraphs it cites to. First, the Court of Appeal rejected River Valley Poultry Farm as authoritative since it was decided before the Supreme Court’s direction in Imperial Tobacco that courts must take into account the specific 4 1688782 Ontario Inc. v Maple Leaf Foods Inc., 2020 SCC 35 at paras 22-23 – interactions between a plaintiff and a government defendant.

Second, the Court of Appeal further held that a judicial finding that “mere targeting” is insufficient to ground proximity would be “inconsistent” with the Supreme Court’s holding in Hill. 8

To be clear, nothing in Imperial Tobacco requires a municipality to step outside of its regulatory role in order to ground a duty of care in negligence. To impose such a high threshold would provide sweeping immunities to municipal corporations not even contemplated in the eighteenth century.

More importantly, it also would be contrary to the Supreme Court’s direction in Imperial Tobacco that courts must examine the specific interactions between the parties. The Supreme Court only asks that the entire constellation of interactions disclose a relationship that is “close” and “direct”. To recall, this is a fundamentally contextual inquiry: “Defining the relationship may involve looking at expectations, representations, reliance, and the property or other interests involved. Essentially, these are factors that allow us to evaluate the closeness of the relationship between the plaintiff and the defendant and to determine whether it is just and fair having regard to that relationship to impose a duty of care in law upon the defendant. The factors which may satisfy the requirement of proximity are diverse and depend on the circumstances of the case. One searches in vain for a single unifying characteristic.”

The City’s attempt to impose such a “unifying characteristic” to all cases involving government authorities would be contrary to this contextual approach. Once again, the City 8 Aylmer Meat Packers Inc. v Ontario, 2022 ONCA 579 at paras 48-49- evades context in an effort to minimize the interests of the plaintiff classes and to disavow its responsibilities towards them.

The supply management system gives rise to proximity and duty of care

10. At paragraphs 512-514, the City argues that the supply management system that it created does not support proximity or a duty of care. This argument should be rejected. Supply management systems are based on three pillars: (1) production control; (2) pricing control; and (3) import control.11 At its core, a supply management system is one that protects industries through regulation and proper enforcement of those regulations. This is precisely what the City set to do when it created the taxi industry on the basis of a supply management model.

Proper enforcement of the taxi by-laws is fundamental and pivotal for this supply management system to work and achieve the purposes that the City intended. In other words, the taxi supply management system hinged on proper enforcement in the context of: (1) production (i.e., how many cars can be used to transport passengers); (2) pricing (i.e., how much consumers are charged for transportation services), and (3) the players who can operate in the market (i.e., only those who are licensed by the City).

The City created this system to attract individuals to buy into it and invest in it to ensure that transportation services to the public are safe and of sufficient quality. People bought into the system because it was a supply management system buttressed by the City’s enforcement arsenal, which it deployed for years to protect the industry from unlawful intruders.

These pillars are also discussed in case law that deals with supply management. For example, see: Nadeau Poultry Farm Limited v Groupe Westco Inc., 2011 FCA 188 at paras 9-12. -5- suggestion that the City’s supply management system does not create proximity and duty of care is belied by the purpose of the system and the conduct of all industry participants over decades.

Vlanich is distinguishable

At paragraphs 267-269 and 362, the City argues that the Ontario Court of Appeal judgment in Vlanich v. Typhair should persuade this Court to find that no proximity arises from the statutory scheme at issue in this trial. In particular, the City contends that Vlanich stands for the proposition that a public authority will only be liable under a statutory scheme where it assumes responsibility for ensuring compliance with a standard intended to reduce the risk of physical harm.

However, this argument falls apart when Vlanich is viewed in its full context and through the lens of

Vlanich is distinguishable.

In Vlanich, two victims of a taxi vehicle collision and insurance company brought claims against a municipality for additional insurance monies. Distilled to its core, the negligence alleged in Vlanich was that the Township granted a taxi license without ensuring that the licensee obtained appropriate insurance. In rejecting a duty of care, the Vlanich court only referenced the by-law requirements for vehicle insurance and license issuance. The Court of Appeal did not consider the question at issue in this trial: whether a duty to take reasonable care in by-law enforcement arises in a supply managed taxicab regime buttressed by expansive enforcement powers and a specific history of intense proximity.

The Vlanich court also did not apply the Imperial Tobacco proximity framework, whereby a duty of care may arise from a combination of the statutory scheme and specific interactions. The failure to adhere to Imperial Tobacco is evident from the Court’s statement that “if a duty of care exists, it must be found in the township’s by-law”.

In Imperial Tobacco, McLachlin C.J. declined to adopt such a restrictive and antiquated approach to the proximity analysis. The City cannot belatedly resurrect it. This Court must examine the specific interactions in combination with the statutory scheme under the 2012 By-law.

The City misrepresents the evidence about Service Requests

At paragraphs 456-461, in an attempt to repudiate the duty of care that it owed to properly enforce the 2012 By-Law, the City mischaracterizes the evidence about the Service Requests that it received. The evidence at trial was that the City does not have any particularized knowledge about the time and resources that the various Service Requests items on the list consume. All the City knows is that some items take longer than others (for example, responding to a complaint about uncut grass is typically dealt with more quickly than complaints in the taxicab industry).

Given this evidence, it does not lie in the City’s mouth to say, based on the number of Service Requests, that enforcement against bandit cabs was a relatively minor issue. This is particularly so given that Susan Jones explicitly testified that such enforcement was a priority for the City.

No policy reasons negate a duty of care

At paragraphs 538-542, the City argues that one purported residual policy concern should negate the imposition of a duty of care in this case: indeterminate liability. This argument misreads Supreme Court jurisprudence regarding the definition of indeterminate liability and its role as a policy concern. It should be rejected.

As a starting point, any second stage Anns/Cooper policy concerns must be “more than speculative”, “compelling”, and raise a “real potential” of negative consequences sufficient to negate a prima facie duty of care.

The City bears the burden of proof of establishing this point.

Yet there is no evidence in the record that indeterminate liability or any other policy reason could negate the imposition of a duty of care. The City’s position and argument are purely speculative.

In any event, a proper application of negligence law demonstrates that indeterminate liability is not a compelling concern here. The Supreme Court has recently clarified that indeterminate liability is liability of specific character and not a specific amount.

As such, indeterminate liability must not be confused with significant liability.

Moreover, indeterminate liability is “nothing more” than just one residual consideration. Even if it exists, it may not preclude a duty of care in all cases.

Put differently, indeterminate liability is not a “policy veto”.

None of the three kinds of indeterminacy arise in the case at bar.

First, the aggregate market value of taxi plates was known to the City. The losses of brokers in relation to negligent enforcement were also reasonably foreseeable.

Second, the plaintiff classes are known to the City, who has itemized each and every one of its taxi plate owner and broker’s contact information.

Moreover, temporal indeterminacy is also inapplicable. Here, the City is only liable for the losses arising from its negligence during a prescribed two year period. This is simply not one of the “rare” cases where the spectre of indeterminate liability remains a concern after the first Anns/Cooper stage.