In dismissing their arguments, the Appeal Court found the municipalities had failed to ensure the road was safe and therefore mainly at fault even though the driver was speeding.
The horrific crash that left them quadriplegic — and gave rise to $30 million in claims — occurred one night in August 2004, when Shannon Deering, 19, of Port Perry, Ont., was driving her younger sister Erica, 16, and three friends to a movie theatre in nearby Whitby.
As they neared the crest of a hill on an unlit rural road, Shannon Deering was blinded by the headlights of an oncoming vehicle, and believed she was about to have a head-on crash.
She steered to the right, lost control and veered into a ditch. The car rolled twice and hit a rock culvert. The sisters suffered terrible spinal cord damage.
In a ruling in October 2010, Ontario Superior Court Justice Peter Howden found Shannon Deering to be one-third liable for the crash, and Oshawa and Scugog Township liable for the balance.
In their appeal, the municipalities argued they were not at fault. They said Howden was wrong to conclude the road was in bad condition, and that he had minimized the driver's negligence.
The Appeal Court disagreed.
"The trial judge's legal conclusions flowed from a series of factual findings that were amply supported by the evidence," the court ruled.
Among other things, the appellate justices noted that "accident hill" presented an unusual and dangerous deflection of light that could easily lead drivers to believe oncoming traffic was in their lane.
In addition, the unposted speed limit on the narrow unlit road, which had no centre line, was "excessive" in that even driving within the limit would not have left sufficient time to react to oncoming traffic.
For their part, the Deerings in a cross-appeal argued the municipalities were 90 per cent to blame, even though Shannon Deering was driving at 90 kilometres an hour in an 80 zone on an unfamiliar, darkened road.
The Appeal Court rejected that idea, saying Shannon Deering "was paying no attention" to her speedometer and was "essentially oblivious" to the need for caution given the road conditions.
Still, it found no reason to interfere with Howden's conclusion that "the greater degree of fault" lay with the municipalities.
While the sisters' total claims exceed $30 million, details of discussions around damages to be paid by the city were not disclosed.
Lawyers for the sisters said the Appeal Court ruling meant they could now move on with their lives.
"They have waited a long time for closure," said Roger Oatley, who represented Shannon Deering.
Dale Orlando, who represented Erica Deering, said the family could "feel secure with the knowledge that they will receive the compensation they need to secure their future."