Supreme Court construction site liability ruling has far-reaching implications

The death of a pedestrian on a road construction site has led to a Supreme Court of Canada ruling with potentially wide consequences, for everyone from municipalities to retailers and even homeowners.

The question before the Supreme Court in the 2015 death of 58-year-old Cecile Paquette was whether the City of Greater Sudbury, as owner of a construction project, could be held responsible for violations of provincial safety rules committed by a contractor it hired to do the work. On Friday, the court had a rare 4-4 deadlock and said the decision will now revert to that of the next highest court that heard the case. That decision, of the Ontario Court of Appeal, was to say employers can be held liable for safety violations committed by contractors.

The ruling applies directly only to Ontario, as it was an interpretation of an Ontario law. But similar health and safety laws would be subject to the same principle elsewhere in Canada.

The Supreme Court ordered the case be sent to the Ontario Superior Court to decide if Sudbury had exercised due diligence toward safety.

Ms. Paquette was crossing a downtown street undergoing a watermain repair when she was struck by a road grader moving in reverse. The site did not have fencing around it as required by provincial safety regulations, nor was a signaller guiding the grader’s driver. The contractor, Interpaving Ltd., pleaded guilty to violating the Occupational Health and Safety Act as an employer and was fined $195,000. The municipality was also charged.

Violations of the act are not criminal offences but they do carry strong penalties, such as fines of up to $1.5-million for a corporation, and up to a year in jail for directors of a corporation. Individuals can be fined up to $500,000.

The city was acquitted at trial when a judge found it was not the employer or the constructor (as the contractor is known), but that, even if it had been, it had taken precautions – its quality-control inspectors visited the site and raised safety concerns. An Ontario Superior Court judge upheld the acquittal but the Ontario Court of Appeal, by a 3-0 count, threw it out.

Justice Sheilah Martin, writing for the judges who endorsed that ruling, said the law was written to strengthen protections for workers, after a 1976 royal commission on the safety of miners. The law allocates responsibility to more than one group, so safety is ensured even if one group fails in their duties.

“This purpose is achieved through the imposition of shared and overlapping duties,” Justice Martin wrote. Her position was endorsed by Chief Justice Richard Wagner, Justice Nicholas Kasirer and Justice Mahmud Jamal.

If safety failures are found to have occurred, the burden would fall on the owner to prove they exercised due diligence in safety matters.

Patrick Groom, a lawyer and author in the area of occupational health and safety in construction law, said the decision will lead to many unnecessary charges. Owners who hire construction managers will now be labelled as employers, and thus bear responsibility for safety.

“I think they got it wrong,” he said in an interview. “The majority has blended the role of employer and the role of owner.” (He used the term “majority” to refer to Justice Martin’s reasons for judgment.)

Kevin MacNeill, who represented the Retail Council of Canada, an intervenor in the case, expressed disappointment with the ruling, adding, “It’s time to double down on due diligence.” But due diligence is “not always easy to prove, and it’s very expensive to prove, because it’s so fact-dependent.”

The other four judges said absurd consequences could follow. If a homeowner hires a contractor for attic repair, Justice Malcolm Rowe and Justice Michelle O’Bonsawin wrote, and another person to check on the contractor’s work, and a subcontractor falls from an unsafe ladder, the homeowner could be held responsible. (Justice Andromache Karakatsanis signed on, while Justice Suzanne Côté wrote a separate dissent.)

Mr. Groom said owners who hire contractors can be held liable whether or not they hire quality-control inspectors, in Justice Martin’s judgment.

The Supreme Court heard the case 13 months ago with nine judges, but lost one judge after Russell Brown resigned earlier this year. The last tie vote occurred in 2014 after the court ruled an appointee, Marc Nadon, legally unqualified to sit. But his replacement, Clément Gascon, was allowed to break the tie after watched a video of the hearing and reading the written materials.

In legal terms, tie votes are treated as if they “have no precedential value, but are entitled to great respect,” said Jeremy Opolsky, a Toronto lawyer not involved in the case.