Heredi v. Fensom, 2002 SCC 50, [2002] 2 SCR 741

Heredi v. Fensom, [2002] 2 S.C.R. 741, 2002 SCC 50

Clayton Fensom and Trailways Transportation Group Inc.                         Appellants

v.

Deryk J. Kendall, Grant A. Richards, Darren T. Hagen,

Randy K. Katzman, D. Roger Arnold, Greg M. Kuse,

Robert H. Goodman, Jay D. Watson and F. Neil Turcott,

operating a partnership under the name of Cuelenaere,

Kendall, Katzman & Richards, and Ronald Miller                                    Respondents

Indexed as:  Heredi v. Fensom

Neutral citation:  2002 SCC 50.

File No:  28068.

2002:  February 18; 2002:  May 23.

Present:  McLachlin C.J. and Gonthier, Iacobucci, Major, Bastarache, Binnie and LeBel JJ.

on appeal from the court of appeal for saskatchewan

Limitation of actions – Statutes – Motor vehicles – Passenger injured while riding on bus suing company and driver in tort and in contract – Whether claims statute-barred – Interpretation of provincial legislation creating a short limitation period for actions seeking the recovery of “damages occasioned by a motor vehicle” – Highway Traffic Act, S.S. 1986, c. H-3.1, s. 88(1).

Actions – Torts – Contracts – Passenger injured while riding on bus suing company and driver in tort and in contract – Examination of distinction in application of limitation periods under provincial Highway Traffic Act between actions framed in contract and actions framed in tort – Highway Traffic Act, S.S. 1986, c. H-3.1, s. 88(1).

In March 1994, H was injured while riding on a Paratransit bus, which was owned by TTG and driven by F.  F picked H up at her home, assisted her in being seated on the bus, and secured her seat belt.  He placed one end of the crutches she used beneath her right shoulder and braced the other end against the interior wheel well of the bus.  F resumed driving and the parties are in agreement, pursuant to an agreed statement of facts, that he operated the bus “in such a manner as to cause the plaintiff’s crutches to jar her right shoulder, thereby causing injury”.  In March 1996, H brought an action against F and TTG alleging both negligence and breach of contract, and an action against her former solicitors, alleging negligence in their failure to bring a claim against F and TTG within the one-year period provided by s. 88(1) of the the Highway Traffic Act for the recovery of “damages occasioned by a motor vehicle”.  At trial,  the action against F and TTG was found to be barred.  The Court of Appeal found that the action in contract against F and TTG could proceed, but that the action in tort was barred under s. 88(1).

Held:  The appeal should be allowed.

The true intent of s. 88(1) is that “damages occasioned by a motor vehicle” requires that the presence of a motor vehicle be the dominant feature, or constitute the true nature, of the claim.  Conversely, claims, whether framed in contract or in tort, where the presence of a motor vehicle is a fact ancillary to the essence of the action ought not be regarded as within the scope of that phrase.  The Court must depart from the sharp distinction that has, in the opinion of some courts, been created between cases framed in contract and cases framed in tort.  The legislation aims to have a reasonably wide effect and does not distinguish between these divergent forms of action.

In order to determine whether an action is for “damages occasioned by a motor vehicle”, and thus subject to the Highway Traffic Act limitation period, a substantive approach ought to be taken.  The nature of the facts and the nature of the action ought to be considered together in order to make a determination as to the fundamental nature of the action.  Are the damages sought to be recovered in the action, in their essence, damages that were occasioned by a motor vehicle?  In light of the way in which the action is framed, and the facts giving rise to the damages claimed, is the action one that could be primarily classified as an action for damages occasioned by a motor vehicle?  If the role of the motor vehicle in the causal chain is too insignificant, or if the causal chain is itself not the most illuminative way to characterize the claim, the action ought not be regarded as subject to the limitation.  If, on the other hand, the dominant feature of the  damages is their relation to a motor vehicle accident, the limitation period ought to be applied. 

In this case, the dominant feature of the facts is that the damage was caused by a motor vehicle.  The presence of the vehicle was not in any way ancillary to the damage complained of.  Instead, it was the very operation of the motor vehicle itself that, by the parties’ mutual admission, centrally caused the damage.  Therefore, the claims brought by H are claims for “damages occasioned by a motor vehicle” and  cannot proceed.

Cases Cited

Overruled:  Heppel v. Stewart, [1968] S.C.R. 707; Dufferin Paving and Crushed Stone Ltd. v. Anger, [1940] S.C.R. 174; explained:  Bruell Float Service Ltd. v. Ontario Hydro, [1976] 1 S.C.R. 9, aff’g (1974), 3 O.R. (2d) 108; F. W. Argue Ltd. v. Howe, [1969] S.C.R. 354; approved:  Clost v. Colautti Construction Ltd. (1985), 52 O.R. (2d) 339; disapproved:  Herbert v. Misuga (1994), 116 Sask. R. 292; Pichler Ramsay Enterprises Ltd. v. T & T Trucking Ltd. (1996), 144 Sask. R. 199; Lebed v. Chrysler Canada Ltd. (1979), 25 O.R. (2d) 161; Byrne v. Goodyear Canada Inc. (1981), 33 O.R. (2d) 800; Daviault v. Canadian Motorcycle Assn. (1985), 49 O.R. (2d) 147; referred to:  Northern Alberta Dairy Pool Ltd. v. Strong & Sons Ltd. (1960), 27 D.L.R. (2d) 174; Renaud v. OC Transpo (1992), 9 O.R. (3d) 726; Clark v. 449136 Ontario Inc. (1996), 27 O.R. (3d) 658.

Statutes and Regulations Cited

Highway Traffic Act, S.S. 1986, c. H-3.1, s. 88(1).

Limitation of Actions Act, R.S.S. 1978, c. L-15, s. 3(1)(f)(i).

Motor Carrier Act, S.S. 1986, c. M-21.2.

Queen’s Bench Rules (Sask.), Rule 188.

APPEAL from a judgment of the Saskatchewan Court of Appeal, [2000] 9 W.W.R. 191, 189 Sask. R. 312, 216 W.A.C. 312, 5 M.V.R. (4th) 71, [2000] S.J. No. 302 (QL), 2000 SKCA 55, allowing the appellants’ appeal in part from a decision of the Court of Queen’s Bench, [2000] 3 W.W.R. 62, 188 Sask. R. 188, 48 M.V.R. (3d) 130, [1999] S.J. No. 791 (QL), 1999 SKQB 216.  Appeal allowed.

Timothy J. MacLeod and Donald Phillips, for the appellants.

Thomas J. Schonhoffer, for the respondents.

The judgment of the Court was delivered by

Iacobucci J.--

I.  Introduction

1                                   In this appeal, we revisit a question of interpretation that has been before this Court four times since it first arose in 1940.  The Saskatchewan Highway Traffic Act, S.S. 1986, c. H-3.1, like the closely similar Acts in force in other Canadian jurisdictions, creates a short limitation period for actions seeking the recovery of “damages occasioned by a motor vehicle”.  It appears that some of this Court’s previous decisions as to the scope of this phrase are in conflict.  Consequently, this appeal requires the Court to resolve this apparent conflict.

II.  Background

2                                   On March 31, 1994, the plaintiff, Edna Heredi was injured while riding on a Paratransit bus, that is, a bus designed to accommodate persons with physical disabilities, owned by the appellant Trailways Transportation Group Inc. (“Trailways”), and driven by the appellant Clayton Fensom.  Fensom picked Heredi up at her home, assisted her in being seated on the bus, and secured her seat belt.  He placed one end of the crutches she used beneath her right shoulder and braced the other end against the interior wheel well of the bus.  Fensom then resumed driving, and the parties are in agreement that he operated the bus “in such a manner as to cause the plaintiff’s crutches to jar her right shoulder, thereby causing injury”.

3                                   The plaintiff brought an action against Fensom and Trailways on March 29, 1996.  The statement of claim alleged both negligence and breach of contract, an implied term of which was the safe passage of the plaintiff from her home to her destination.  The defendant said that s. 88(1) of the Highway Traffic Act provided a complete answer, since it set out a 12 month limitation period for the recovery of “damages occasioned by a motor vehicle”.

4                                   On the same day, the plaintiff brought an action against her former solicitors, the present respondents, alleging negligence in their failure to bring a claim against Fensom and Trailways within the one-year period provided by the Highway Traffic Act.

5                                   The parties to this appeal are the defendants in Heredi’s actions, Fensom and Trailways, and the original solicitors for Heredi.  The question is whether s. 88(1), or the general six-year limitation period set out in the Limitation of Actions Act, R.S.S. 1978, c. L-15, at s. 3(1)(f) applies to these facts.  The damages in the underlying action have been agreed to be $25,000.00.  The relevant facts are also a matter of an agreed statement between the parties, including a specific stipulation that the cause of the damage was the manner in which Fensom operated the vehicle.   If the appeal is allowed, then Heredi will be able to proceed against the respondents.  If the appeal is dismissed, she may proceed against the appellants.  The issue we must resolve is whether damages of the type sustained by Ms. Heredi are “damages occasioned by a motor vehicle”, within the meaning of s. 88(1) of the Highway Traffic Act and in light of the agreed statement of facts.

III.  Relevant Statutory Provisions

6                                   Highway Traffic Act, S.S. 1986, c. H-3.1

88(1)  No action may be brought against a person for the recovery of damages occasioned by a motor vehicle after:

(a) the expiration of 12 months from the time when the damages were sustained; or

(b) in a case where death is caused, within the time limited by  The Fatal Accidents Act.

Limitation of Actions Act, R.S.S. 1978, c. L-15

3. -- (1)  The following actions shall be commenced within and not after the times respectively hereinafter mentioned:

                                                                   . . .

(f) actions for:

(i) the recovery of money, except in respect of a debt charged upon land, whether recoverable as a debt or damages or otherwise, and whether on a recognizance, bond, covenant or other specialty or on a simple contract, express or implied;

. . .

within six years after the cause of action arose;

IV.  Judgments Below

A.  Saskatchewan Court of Queen’s Bench, [2000] 3 W.W.R. 62

7                                   The parties appeared before Scheibel J. on an application pursuant to Rule 188 of the Queen’s Bench Rules to determine a question of law, stated as follows:

Is the plaintiff’s cause of action as the same is outlined in her statement of claim issued March 29, 1996, subject to s. 88(1) of The Highway Traffic Act, and thereby barred by virtue of the operation of the said s. 88(1), or alternatively, is the plaintiff’s cause of action subject to s. 3(1)(f) of The Limitation of Actions Act?

8                                   The trial judge found that the question of whether the plaintiff’s damage was “occasioned by a motor vehicle” within the meaning of s. 88(1) of the Highway Traffic Act was the central issue.  He considered himself bound by Herbert v. Misuga (1994), 116 Sask. R. 292 (C.A.), and Pichler Ramsay Enterprises Ltd. v. T & T Trucking Ltd. (1996), 144 Sask. R. 199 (C.A.).  These cases confirmed that the decision of this Court in Heppel v. Stewart, [1968] S.C.R. 707, set out the general approach to the phrase, “damages occasioned by a motor vehicle”.

9                                   Following Heppel, Scheibel J. found that if a motor vehicle in some way brought about the damage complained of, whether or not a physical causal connection existed between the vehicle and the damage suffered, the limitation period from s. 88(1) of the Highway Traffic Act applied.  Three species of exceptions existed to this proposition. First, in cases of breach of contract, the limitation period had been held not to apply to common carriers using motor vehicles in the performance of their contracts of carriage: see Bruell Float Service Ltd. v. Ontario Hydro, [1976] 1 S.C.R. 9;  Northern Alberta Dairy Pool Ltd. v. Strong & Sons Ltd. (1960), 27 D.L.R. (2d) 174 (Alta. S.C.).  Second, it had been held not to apply in a number of Ontario cases for breach of a contract for vehicle repair, where the motor vehicle was only the instrument through which an earlier breach or act of negligence caused damage.  The third exception was where the motor vehicle was operating as an apparatus rather than a vehicle, e.g., where a fuel truck was pumping fuel rather than acting as a fuel transport: see F. W. Argue Ltd. v. Howe, [1969] S.C.R. 354.

10                               Scheibel J. concluded that the damage in this case was occasioned by a motor vehicle.  The agreed statement of facts made plain that it was the negligent operation of the vehicle, not any negligence in the loading of the passenger, that caused the injury.  As such, the situation fell within the general rule in Heppel and the action was prescribed by s. 88(1) of the Highway Traffic Act.  The view that the case could be framed as a breach of an implied contractual term of safe passage could not overcome the agreed fact that it was the operation of the motor vehicle that caused the injury.  Furthermore, the defendant Trailways was not a common carrier and thus not susceptible to that exception, since it was regulated by the Motor Carrier Act, S.S. 1986, c. M-21.2, removing it from the purview of the common law concept of common carriers.

11                               Thus, Scheibel J. found that the action of the plaintiff against Trailways and Fensom was governed by s. 88(1) of the Highway Traffic Act and barred as filed more than one year after the accident.

B.  Saskatchewan Court of Appeal, [2000] 9 W.W.R. 191

12                               The Court of Appeal, per Sherstobitoff J.A.,  viewed the issue as turning on this Court’s decisions in Heppel, supra, and Bruell, supra.  While Heppel clearly set out a general approach to the language “damages occasioned by a motor vehicle”, the trial judge was in error in regarding Bruell as applying only to common carriers.  Bruell was, rather, decided on the basis that the action at issue sounded in contract rather than in tort.  The true rule necessarily arrived at by considering Heppel and Bruell together was that actions in tort are subject to the Highway Traffic Act limitation, while actions in contract are not.  In Heppel, this Court was silent with respect to the alternate claim in contract, while in Bruell, this Court was silent with respect to the alternate claim in tort.

13                               Therefore, Sherstobitoff J.A. allowed the appeal in part, finding for the court that the action in contract could proceed against Trailways and Fensom, but that an action in tort could not, as the latter was barred by s. 88(1) of the Highway Traffic Act.

V.  Analysis

A.  Introduction

14                               Section 88(1) of the Highway Traffic Act bars the bringing of an action for any “damages occasioned by a motor vehicle” after 12 months of the occurrence of the damages.  The plaintiff in this case brought her action nearly two years after the accident.  Therefore, if the damages that the plaintiff suffered are properly viewed as “damages occasioned by a motor vehicle”, her claim against the appellants cannot proceed.

B.  Previous Consideration of “Damages Occasioned by a Motor Vehicle”

15                               The words, “damages occasioned by a motor vehicle”, constitute the standard phraseology used in the limitation periods provided by the various provincial Highway Traffic Acts, and have been the subject of a surprising amount of disagreement and confusion in the Canadian courts.  This Court has been no exception.  In that light, it is worthwhile to review briefly the state of the law and some of the attempts that have been made to deal with the disputed language.

16                               The phrase was first considered by this Court in the case of Dufferin Paving and Crushed Stone Ltd. v. Anger, [1940] S.C.R. 174.  This case involved a claim for damages to a residence arising out of the operation of cement-mixing trucks.  The cement mixers were stationed, on a daily basis for some months, on the street where the plaintiff resided.  Over time, the vibrations caused by the repeated engagement of the cement mixers caused some damage to the plaintiff’s home.  This Court cast the phrase “damages occasioned by a motor vehicle” very broadly.  The majority, per Davis J., were of the view that the phrase was itself precise and unambiguous.  So long as the damage was caused by a motor vehicle, the limitation applied.  The result was concurred in by the remainder of the Court, all members of which agreed upon taking a broad view of the class of damages meant to be captured.  The vibrations of the cement mixers through the course of their operation on and motion through the plaintiff’s street were within the purview of the limitation period.

17                               This Court again considered the issue, and reached a similar conclusion, in Heppel, supra.  The plaintiff was a motorist and was rear-ended by another driver while she was stopped.  It appeared that the defendant’s brakes had been improperly repaired two or three days prior to the accident, and that this disrepair was the cause of a brake failure leading to the accident.  The plaintiff attempted to join the mechanic as a co-defendant.  Martland J., for the majority, found that the limitation applied, i.e., that the damages caused by the mechanic’s alleged negligence were “damages occasioned by a motor vehicle”.  Following Dufferin Paving, supra, Martland J. found at pp. 709-10 that the section

does not purport to apply only to causes of action of a particular nature.  It does not refer to the use or operation of a motor vehicle.  It states specifically that no action shall be brought to recover damages occasioned by a motor vehicle.  If a motor vehicle is the occasion for the damage, i.e., if it is the vehicle which brings it about, then the limitation period applies.

18                               Judson J. dissented, however, on the interpretation of “damages occasioned by a motor vehicle”.  He would have, as the Court of Appeal had done, distinguished Dufferin Paving and found that the limitation period was really aimed at damages in relation to the use or operation of a motor vehicle.  The suit against the mechanic was not related to such operation, but was for negligent repair.  The Highway Traffic Act, in his view, was meant to govern the operation of motor vehicles, and the limitation period had to be interpreted in that light.

19                               Six months later, this Court again was called on to deal with the Ontario limitation in Argue, supra.  The case involved a serious fire caused by the negligent operation of a fuel pump refilling the plaintiff’s fuel oil tank in the basement of his pharmacy.  The fuel pump was an integral part of the defendant’s fuel truck, the vehicle being constructed in such a way as to allow the defendant to transport and deliver fuel oil to its customers without any additional equipment being necessary.  A fire which destroyed the pharmacy and surrounding buildings was caused when the defendant overfilled the plaintiff’s fuel oil tank.  The defendant asserted that the action was limited by the Highway Traffic Act, as it had not been filed within the period for “damages occasioned by a motor vehicle”.

20                               Spence J., speaking for the Court, distinguished the situation in Dufferin Paving, supra, finding that the case stood only for the proposition that “when damage is occasioned by a motor vehicle used as such whether that damage sounds in negligence or in nuisance or in breach of statutory regulations, the section is a bar to actions . . .” (p. 367 (emphasis in original)).  When a motor vehicle was used in an aspect other than as a mode of conveyance, the limitation would not apply.  This was consistent with Heppel, as well, since in Heppel the accident was caused by a motor vehicle in the course of travelling on a highway.  Therefore, the action in Argue was found not to be barred by the limitation in the Highway Traffic Act.

21                               This Court reviewed this issue a fourth time, in the case of Bruell, supra.  The defendant was a common carrier, and contracted with the plaintiff to transport some machinery.  In the course of transport, the defendant drove under a low bridge and damaged the machinery.  The defendant asserted, in defence of the claim brought against it, the limitation period in the Highway Traffic Act.  Judson J. found, speaking for the Court, that the action for breach of contract was not barred by this limitation period.  He agreed with the view of Estey J.A., in the Court of Appeal (Hydro-Electric Power Commission of Ontario v. Bruell Float Service Ltd. (1974), 3 O.R. (2d) 108), that the legislature would have had to have been much clearer in its language than it had, if it meant to affect actions in contract “by reason only of the fact that a vehicle might be somehow involved in the performance of the contract” (p. 11).

22                               The cases from this Court discussed above constitute the framework of the debate which has, subsequently, required the attention of a number of other courts.  It has been clear since at least the decision in Bruell that some amount of inconsistency in approach exists among them.  In Bruell, Judson J. specifically noted at p. 11 that:

The ratio of the judgment [in Argue] was that the damage was not caused by the use and operation of a motor vehicle but was caused by the use and operation of a pump mounted on the motor vehicle.  There is undoubtedly an inconsistency between this judgment and the judgment in the Heppel case.  The Heppel case had held that if a motor vehicle is the occasion for the damage, if it is the vehicle which brings it about, then the limitation period applies.

However, Judson J. also declined to resolve the inconsistency, as it was, in his view, unnecessary to do so in order to resolve the appeal before the Court at that time.

23                               The trial and appellate courts which have had to consider the issue since Bruell have not had the same luxury.  Accordingly, there have been a number of attempts made to resolve or account for the divergent approaches evident in the Heppel and Dufferin Paving line of cases and the Bruell and possibly the Argue line.

24                               One such approach is that which the trial judge took in this case.  On this  view, Heppel sets out a general rule to which Argue and Bruell establish exceptions; these are, respectively, cases involving the breach of contract for transport by a common carrier, and cases where the vehicle is not being used as a vehicle, but as a fuel pump, at the time of the damage being caused.  While I admire the attempt of the trial judge, and the Saskatchewan Court of Appeal in Herbert v. Misuga, supra, and Pichler Ramsay Enterprises, supra, to reconcile difficult precedents, in my view this approach can no longer adequately account for the real conflict between the approaches variously taken by this Court.  In my opinion, the rule in Heppel is so broad as to clearly encompass the situations in Argue and Bruell.  Although the Court in Argue succeeded in drawing a distinction from Heppel, it did not set out to reduce the latitude of the Heppel approach on a principled basis.  Furthermore, the Court specifically recognized in Bruell the inconsistency between these two interpretations of “damages occasioned by a motor vehicle”, even while adding a new twist to the series of interpretations.

25                               A second approach is exemplified by the Court of Appeal’s judgment in this case.  This view regards the decision in Bruell as standing for the proposition that actions framed in contract are not susceptible to limitation periods on actions for “damages occasioned by a motor vehicle”, that is, that only actions framed in tort will be so barred.  Thus, the broad approach taken in Heppel applies to all actions brought in tort, but provided that a case is brought in contract, the limitation will never apply at all.  This view rests largely upon certain comments of Estey J.A. in the Court of Appeal in Bruell, where he expressed the view that no principle of law “precludes a claim in contract only because an action in tort arises on the same facts” (p. 116). 

26                               The same approach of regarding the cause of action as determinative was taken by Cory J. in the case of Lebed v. Chrysler Canada Ltd. (1979), 25 O.R. (2d) 161 (H.C.J.), which case was followed in Byrne v. Goodyear Canada Inc. (1981), 33 O.R. (2d) 800 (H.C.J.).  This approach was also adopted in Daviault v. Canadian Motorcycle Assn. (1985), 49 O.R. (2d) 147 (H.C.J.).  In Lebed, much the same as in Heppel, the plaintiffs were involved in a motor vehicle accident allegedly attributable to negligence in the manufacture of their vehicle.  The plaintiffs sued both the manufacturer for negligence, and the automobile dealer for breach of contract and of the Sale of Goods Act, R.S.O. 1970, c. 421.  Cory J. decided that he was bound by Heppel to apply the limitation period in the Highway Traffic Act to the claim in negligence against the manufacturer.  However, he concluded that the claim in contract against the dealer could proceed, on the same basis as the Court of Appeal did in this case: namely, that Bruell governed cases in contract, and Heppel only those in tort.

27                               With great respect, once again, to the struggles of the courts below with this perplexing question, this is also not an adequate resolution of the meaning of “damages occasioned by a motor vehicle”.  I am unable to conclude that the legislature, in drafting this provision, intended that all claims in tort, regardless of the true substance of the claim, should be within the purview of this limitation period merely because of the presence of a motor vehicle somewhere within the chain of causation leading to damage sustained.  Conversely, I am not persuaded that the legislature would have regarded all claims in contract, however tendentiously framed, as beyond the limitation period’s reach.  In so far as the courts below have had to deal with Supreme Court precedent from Heppel and Bruell, the approaches taken have been fair attempts to grapple with the difficulties created.  But I cannot regard this statute as having created the bright line between actions in tort and in contract outlined in Lebed and in the Court of Appeal in the instant case.

28                               There is, broadly speaking, a third approach that has been taken in a series of Ontario cases.  An excellent example is found in Clost v. Colautti Construction Ltd. (1985), 52 O.R. (2d) 339 (H.C.J.), substantially followed in Renaud v. OC Transpo (1992), 9 O.R. (3d) 726 (Gen. Div.), and Clark v. 449136 Ontario Inc. (1996), 27 O.R. (3d) 658 (Gen. Div.).  In Clost, the plaintiff, a child, accidentally rode his toy truck into the street, where he was struck and injured by a motor vehicle.  The plaintiff sued the manufacturer of the toy truck in negligence, with no allegation of any contractual relationship.  The toy manufacturer argued that the limitation period in the Ontario Highway Traffic Act barred the claim, as it was filed as against this defendant more than two years after the accident occurred.  In concluding that this was not the type of claim the Act intended to prescribe, Osborne J. made the following observations at p. 345:

What filters through the Supreme Court of Canada’s decisions in Argue and Bruell is the need to examine the substance of the claim being advanced, as opposed to simply considering what actually caused the damage complained of. . . . In my view, the intellectual exercise required must focus on the claim being made against the defendant seeking the protection of the Highway Traffic Act limitation period.  What claim is being made against that defendant?  That is a far different exercise than asking the simplistic question, how was this plaintiff injured? or, did a motor vehicle occasion the physical injury referred to as the basis for the plaintiff’s damage claims?

29                               In that light, Osborne J. concluded that the substance of the claim against the toy manufacturer had nothing to do with a motor vehicle.  The presence of a motor vehicle in the chain of causation was simply incidental to the essence of the claim.  Therefore, he found that s. 180(1) of the Ontario Highway Traffic Act could not be relied on by the defendant.

30                               What Clost attempts to make clear is that the mere fact that a claim is made in tort or in contract is not determinative.  The action against the toy manufacturer was a products liability claim in tort.  However, the action was so far removed from the involvement of a motor vehicle that Osborne J. could not have reasonably regarded the case as within the intended field of operation of the Highway Traffic Act limitation.  Osborne J., instead of relying completely on the tort-contract dichotomy emanating from Lebed’s reconciliation of the conflicting cases in this Court, took a substantive approach to the interpretation of “damages occasioned by a motor vehicle”, and thus to the application of this type of limitation period.  Although the decision in Clost does not so clearly follow from or accommodate the jurisprudence of this Court, I am of the view that there is substantial merit to the sort of approach Osborne J. took, which I shall now discuss.

C.  The Proper Approach to “Damages Occasioned by a Motor Vehicle”

31                               In my view, it is time for this Court to depart from the sharp distinction that has, in the opinion of some courts, been created by the effect of Heppel and Bruell between cases framed in contract and cases framed in tort.   The legislation aims to have a reasonably wide effect and does not distinguish between these divergent forms of action.  It says, simply,  “[n]o action may be brought against a person for the recovery of damages occasioned by a motor vehicle” after the expiry of the limitation period  (emphasis added).

32                               At the same time, I would depart from the view expressed most forcefully in Heppel that, “[i]f a motor vehicle is the occasion for the damage, i.e., if it is the vehicle which brings it about, then the limitation period applies” (p. 710).  In so far as this has been taken to be the core of the Heppel decision, that the presence of a motor vehicle in the chain of causation leading to damages for which the action is brought is sufficient to invoke the limitation, I think it must be said that Heppel should no longer be considered the law.

33                               To deal with this issue, we must instead recognize the difficulty of setting out ironclad rules in the interpretation of this type of provision.  The true intent of the legislature has often been left to the side in the debate over the phrase here in issue.  The following comments made by the Court of Appeal in Heppel, and cited approvingly at p. 712 by the dissenting judge in this Court, remain relevant, in my opinion:

The Highway Traffic Act regulates the use and operation of motor vehicles and I think that the scope of s. 147(1) consistently with its setting in the Act, is limited to cases in which damage is occasioned as the result of the use or operation of a motor car . . . .

While I do not wish to simply substitute a new test of whether the damage has been caused by the “use or operation” of a motor vehicle, I agree that the scope of the Highway Traffic Act must be kept in mind.  The Act does not mean to regulate every aspect of contractual and delictual liability.  It means to regulate highway traffic.  While there may be instances in which a motor vehicle might be the central player in the causation of damages while not engaged in travelling on a highway, these instances will be somewhat rare.

34                               Thus, in order to determine whether an action is for “damages occasioned by a motor vehicle”, and thus subject to the Highway Traffic Act limitation period, a substantive approach ought to be taken.  The nature of the facts and the nature of the action ought to be considered together in order to make a determination as to the fundamental nature of the action.  Are the damages sought to be recovered in the action, in their essence, damages that were occasioned by a motor vehicle?  In light of the way in which the action is framed, and the facts giving rise to the damages claimed, is the action one that could be primarily classified as an action for damages occasioned by a motor vehicle?  If the role of the motor vehicle in the causal chain is too insignificant, as in Argue, or if the causal chain is itself not the most illuminative way to characterize the claim, as in Bruell or as in Clost, the action ought not be regarded as subject to the limitation.  If, on the other hand, the dominant feature of the damages is their relation to a motor vehicle accident, the limitation period ought to be applied.

35                               In other words, the true intent of the statute is that “damages occasioned by a motor vehicle” requires that the presence of a motor vehicle be the dominant feature, or constitute the true nature, of the claim.  Conversely, claims, whether framed in contract or in tort, where the presence of a motor vehicle is a fact ancillary to the essence of the action, ought not be regarded as within the scope of that phrase.

36                               In many ways, the decided cases tend to the application of this principle in the result, although the principles they express may differ.  In Dufferin Paving, the fact that the damage sued on was exclusively and directly caused by the operation of heavy cement mixers driving up and down the street characterizes the claim as, in essence, a claim about damages occasioned by a motor vehicle.  Heppel, while perhaps closer to the line, involved the collision of two automobiles, and this clearly overwhelmed the fact that the action was brought against a mechanic in contract.  By contrast, the cases going the other way tend to emphasize the ancillary role of the motor vehicle.  In Argue the motor vehicle was merely an instrument upon which the stationary fuel pump that caused the eventual damage was conveyed. In Bruell, which is probably as close to the line as was Heppel, the essence of the claim was regarded as failure to deliver goods.  The fact that a motor vehicle was involved in the performance was ancillary to this contract.  The same can be said of the facts in Clost, Clark, Daviault, and most of the other decided cases.

37                               In the light of the substantive approach herein adopted, it can also be seen that there will be some claims in contract that the statute will bar.  Where a claim brought in contract is, essentially, an attempt to frame what is really a tort action in terms that mean to evade the operation of the limitation period, the period will operate nevertheless.  Although there are a number of legitimate reasons to frame an action in both contract and in tort, with sufficient ingenuity almost any action in tort can be artificially converted into an action in contract by hypothesizing an implied contract with implied terms.  Where the framing of the action in contract is a tendentious characterization of this sort, a court must not be afraid to interfere with alleged contract rights.  While I agree in principle with the view expressed by Estey J.A. in Bruell that Parliament would have had to manifest a very clear intention to interfere with rights in contract by this section, this is no license to frame actions in a less than natural manner merely to avoid the section’s operation.

38                               It is also clear that there are claims in tort which this section will not catch, as was the case in Clost.  A party whose negligence leads to injury or damages should not be given the advantage of this period merely because that party had the good fortune of having the eventual damage proximately caused by a third-party motorist.  It is true, of course, that where a motor vehicle is the immediate cause of the damage most actions in tort will be barred and most actions in contract will not.  But in either case, the true question that must be asked is a question of what the essence of the claim really is.

39                               The characterization of the claim is a matter best suited to the trial judge’s position.  The trial judge should exercise his discretion in deciding upon which factors, in a particular case, are the most relevant to the essential characterization.  Generally both the cause of action itself and the facts surrounding the damages will be the most relevant.  In carrying out this process, judges should also regard the decided cases as illuminative of what sort of actions fall within the statute’s purview.  For instance, I would not depart from the process followed in, e.g., Argue of also asking whether the motor vehicle is acting in the character of a motor vehicle, as it were, or whether its nature as a motor vehicle is quite irrelevant to the essence of the action.

D.  Application to this Appeal

40                               In this appeal, the parties stipulated in their Agreed Statement of Facts that Fensom operated the bus “in such a manner as to cause the plaintiff’s crutches to jar her right shoulder, thereby causing injury”.  The plaintiff framed her action both as a tort claim and a contract claim.

41                               In view of the parties’ stipulation, it is clear that the direct cause of the injury was the operation of a motor vehicle.  It is also true that the defendant Fensom secured the plaintiff’s crutches between her underarm and the wheel well of the bus in a way that might also have been considered negligent.  However, the potential negligence of this manner of seating the plaintiff would never have caused damage either, except for the fact that she was being seated in a motor vehicle, and that this motor vehicle would soon begin to move and to jar the occupants as the vehicle encountered bumps and other flaws in the road.

42                               The contract between the plaintiff and Trailways was alleged to contain an implied term of safe passage.  I would note immediately that this alleged implied term itself is directly contingent on the proper operation of a motor vehicle.  In other words, most of the imaginable breaches of this implied term would of necessity be “damages occasioned by a motor vehicle”, save perhaps accidents occurring while the driver was assisting the plaintiff down the sidewalk or into her home.  In any event, it appears to me that the purpose of this alleged implied term is to transfer what is, in essence, a tort claim into the realm of contract law.  A term of safe passage is not unusual or inappropriate, but in the context of the facts of this case, it amounts to an attempt to find a contractual obligation to act in accordance with the standard of care.

43                               With respect to each claim, then, the dominant feature of the facts is that the damage here was caused by a motor vehicle.  The presence of the vehicle was not in any way ancillary to the damage complained of.  Instead, it was the very operation of the motor vehicle itself that, by the parties’ mutual admission, centrally caused the damage.  The alternative cause -- the placement of the plaintiff’s crutches -- is so highly contingent on the context of the plaintiff’s presence in a motor vehicle about to engage in motion, that I can find no distinction of significance there.  In my view, therefore, the claims brought by the plaintiff are claims for “damages occasioned by a motor vehicle”.

VI.  Conclusion

44                               For the foregoing reasons, I would allow the appeal, set aside the judgment of the Saskatchewan Court of Appeal, and answer the stated question by finding that s. 88(1) of the Saskatchewan Highway Traffic Act applies to the plaintiff’s case against the appellants Fensom and Trailways.  The appellants will have their costs in this Court and in the courts below.

Appeal allowed.

Solicitor for the appellants:  Saskatchewan Government Insurance, Regina.

Solicitor for the respondents:  Saskatchewan Lawyer’s Insurance Association, Regina.