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Sudbury accident Supreme Court ruling creates onerous challenges for Ontario construction project owners

Ontario Construction News staff writer

A recent (and rare) tied Supreme Court decision has created new costs and risks for owners of Ontario construction projects, which will filter down through the industry as it adjusts to potentially onerous health and safety litigation.

The decision in early November relates to the 2015 death of 58-year-old Ceile Paquette, a pedestrian who died when she was struck by a road grader moving in reverse while contractor Interpaving Ltd. was working on the job.

Both the contractor and the city were charged for violating the Occupational Health and Safety Act (OHSA) because the site did not have fencing around it, nor was a signaller guiding the grader’s driver. The contractor pleaded guilty and was fined $195,000.

(OHSA violations are not criminal offences, but can carry severe penalties. Construction Lawyer Norm Keith, speaking during a Construction Law Update session at the Buildings Show on Nov. 29 said the province is aggressively enforcing OHSA rules, with penalties enhanced recently with fines of up to $1.5 million for a corporation and jail terms for up to a year.  Individuals – including supervisors and workers – can be fined up to $500,000 per offence – and usually inspectors can find more than one offence; so the fines and penalties can be effectively doubled, or more.)

The original trial judge acquitted the city because he determined the city, as an owner, was not the employer or “constructor” and thus liable for OHSA provisions.  And even it had, it had taken precautions – it had quality control inspectors visit the site, who raised safety concerns with the contractor.

An Ontario Superior Court judge upheld the acquittal. However, when the case finally reached the Ontario Court of Appeal the judges determined in a 3-0 vote that indeed the city had liability under the OHSA and would need to prove it had properly conducted due diligence to ensure the site was safe and the contractor was following the appropriate regulations.

Justice Shelah Martin, writing for the four Supreme Court judges who endorsed the Court of Appeal Ruling, said the law was written to strengthen workers’ protections, after a 1976 royal commission on mining safety. The law allocates responsibility to more than one group so safety is ensured even if one group fails in their duties, the judge observed.

“This purpose is achieved through the imposition of shared and overlapping duties,” Justice Martin wrote.

While the city was not found guilty by the Supreme Court decision, the due diligence requirements are exceptionally challenging, Keith told the audience at the legal update session.

Successful due diligence defences require that:

  • All actual and potential hazards (applicable to the offence) have been identified;
  • The risk of exposure to workers is assessed for identified hazards;
  • Hazards are eliminated, or controls are implemented to minimize exposure risk;
  • These provisions need to be communicated to workers – if the communication isn’t there, the due diligence isn’t complete;
  • Workers, work practices and work site equipment, machinery and facilities need to be monitored;
  • Unsafe work practices and hazardous situations are remedied;
  • Workers and/or supervisors are disciplined if they are found to be in violation of safe work practices;
  • and finally, everything needs to be documented.

Keith says while these requirements are reasonable for a constructor/employer, huge challenges occur when they are uploaded to an owner who would normally simply expect the contractor to take responsibility for safety matters.

The four Supreme Court judges who disagreed with the decision said absurd consequences could occur. Justice Malcolm Rowe and Justice Michelle O’Bonsawin wrote that, for example, a homeowner could hire a contractor to complete an attic repair, and another person to check on the contractor’s work. However, if a subcontractor falls from an unsafe ladder, the homeowner could be held responsible according to the ruling, the judges observed.

Essentially, says Jerry Crawford principal with KGC Consulting in Alberta, “the court explicitly rejects the idea that an owner needs to exercise control over the worksite in order to be liable.

“Because OHSA establishes what are known as ‘strict liability’ offences, the Crown needs only to prove that a breach of the employer’s obligations took place, not that the employer intended it, in order to secure a conviction,” he wrote in a Nov. 16 email to Clive Thurston, former president of the Ontario General Contractors’ Association. “While owners will be able to offer defences of due diligence to any charges, the onus will be on the owner to make out that defence.

“The fact that the Crown could reasonably secure convictions against owners makes it much more likely that Crown prosecutors will require defendants to proceed to trial – which would be enough to bankrupt most people through legal bills.

“It cannot be stressed enough how much the process is the punishment when it comes to the justice system,” Crawford wrote. “A quasi-criminal charge that needs to be defenced through a trial can ruin the lives of many people, through legal bills and stress, to say nothing of the consequences of a conviction. The Supreme Court has just made that possibility very real for every Ontarian who does nothing more than hire a contractor.

“What’s more, the court’s reasons provide no clear guidance as to what would ground a clear due diligence defence, and in fact is reasons seem to trap owners in a catch-22. The court suggests that owners should ‘supervise’ a contractor to establish due diligence – but simultaneously suggests that exercising ‘control’ would make it more likely that an owner would be found to be liable.

“Good luck figuring out where supervision ends and control begins. And if you’re wrong, you could be liable for up to a $500,000 fine and a year in jail.

“This decision is a disaster – for common sense, for the construction industry, for owners and probably for insurers, too. In my view, it’s also a disaster for the credibility of the Supreme Court, which has upended Ontarians’ long-settled understanding of the law in a fit of textual interpretation entirely divorced from the way life in the Ontario (construction industry) actually works. The Supreme Court, not for the first time, seems to have gotten that its decisions have real-world consequences.

“The decision calls out for unambiguous statutory amendments by the provincial legislation,” Crawford wrote. “It is not a constitutional law decision; it is a point of statutory interpretation, and a statute can be amended. Let’s hope the provincial government acts quickly.

“Write to (Ontario Attorney General) Doug Downey about this. This matters.”

The Supreme Court heard the case 13 months before issuing its ruling. The court had nine judges then, but Russel Brown resigned earlier this year.

Tie votes do not have precedential value, but “are entitled to great respect,” Jeremy Opolsky, a Toronto lawyer not involved in the case told the Globe and Mail. Accordingly, while the ruling only applies to Ontario, it will have influence on decisions throughout the country where other provinces have similar OHSA laws.

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