SCC ruling will increase risk of legal exposure for construction project owners, says lawyer

In a decision released Friday, the Supreme Court of Canada has found the City of Sudbury is liable for a death caused by the employee of a company the city hired to fix a broken water main.

In R. v. Greater Sudbury (City), 2023 SCC 28, the SCC confirmed the appeal court ruling that the City of Sudbury had the obligations of an employer under Ontario’s Occupational Health and Safety Act (OHSA). The case will return to the provincial offences appeal court to hear the city’s due diligence defence – that, while it had breached its duty as an employer, it had taken every reasonable precaution in the circumstances.

The ruling’s impact on the law will be that “owners are potentially liable for any workplace safety violations on a project by a contractor, subject to the defence of due diligence,” says Ryan Conlin, a partner at Stringer LLP in Toronto, who acted for the City of Greater Sudbury. Conlin says his comments were his own, and he was not speaking on behalf of the city.

The case centred around s. 25(1)(c) of the OHSA, which gives an employer the duty to ensure that the measures and procedures prescribed by the regulations are carried out in the workplace.

Sudbury hired the company Interpaving Limited to repair a downtown water main. During the work, an Interpaving employee drove a road grader in reverse through an intersection and fatally struck a pedestrian. The construction work was not fenced off from the public intersection, and there was no signaller on the scene to direct traffic, both of which provincial regulations require.

The city won at the provincial court, arguing it was not an employer under s. 1(1) of the OHSA because it lacked direct control over the intersection and the workers. The judge also found that if the city had been an employer, it had acted with due diligence. The provincial offences appeal court confirmed the decision but did not address the due diligence finding. The Court of Appeal disagreed and found the City liable as an employer under s. 25(1)(c) of the OHSA. The appeal court remitted the due diligence question to the provincial offences appeal court.

The SCC decision was 4-4. A majority is required to overturn a lower court decision, so the court dismissed the appeal. Justice Sheilah Martin wrote the reasons for the four Justices in favour of dismissing the appeal. Justices Michelle O'Bonsawin and Malcolm Rowe wrote one set of dissenting reasons. Justice Suzanne Côté wrote her own set of dissenting reasons.

The decision will increase the risk of legal exposure for owners of construction projects, says Sahil Shoor, a Gowling WLG partner whose litigation practice is partly focused on construction and infrastructure projects. Shoor was not involved in R. v. Greater Sudbury (City).

He says hiring a general contractor as a constructor and allowing them to assume operational control over a project may no longer insulate its owner from liability under the OHSA.

“If an owner is found to be an ‘employer’ pursuant to the OHSA, and the owner or its staff are regularly present at the project, the owner may be held liable for health and safety matters for the entire project,” says Shoor. “This means that an owner may now be liable for health and safety matters over which it exercises no day-to-day oversight or control.”

Martin said the city was an employer of quality control inspectors, whom it had sent to the construction site to oversee Interpaving’s work. The city was also the employer of Interpaving, she said and was required by s. 25(1)(c) to erect a fence between the construction and the public and employ signallers.

Justices O'Bonsawin and Rowe agreed that the city was the employer of the quality control inspectors. But, in contracting with Interpaving, they said the city did not become the employer of the workers Interpaving hired. O'Bonsawin and Rowe would have allowed the appeal and remitted the matter back to the provincial court to determine the applicability of the regulatory fence and signaller requirements. The applicability of these regulatory requirements depends on whether the city had control over construction projects, the judges said, which neither the trial judge nor the provincial offences appeal court had yet considered.

Justice Côté would have allowed the appeal and restored the trial judge’s acquittals. She said the regulatory obligations were the responsibility of the employers who performed the construction work, which the city had no involvement in or control over.