Leave to appeal granted for ONCA ruling which increased legal exposure on the construction industry

The Supreme Court of Canada will rule on whether a construction owner should be liable for a work project’s health and safety matters as an employer. Canada’s top court granted the City of Sudbury leave to appeal after being held responsible for violations under the Occupational Health and Safety Act by the Ontario Court of Appeal.

Sahil Shoor, construction and infrastructure lawyer at Gowling WLG, says it is unclear whether the Supreme Court will agree with the Court of Appeal’s interpretation of the duties of owners, constructors, and employers on construction projects. 

“The Court of Appeal’s dramatic break with established practice means that the City now faces liability for allegedly breaching key requirements of Ontario’s OHSA, including obligations that relate to training staff, monitoring the workplace and taking every precaution reasonable to keep the project safe.”

The Supreme Court will focus on the issue of whether the appeal court’s characterization of the city as an “employer” at the project was appropriate. Shoor says the decision did not address whether a court may introduce how much control an owner/employer has over a project in a separate case that considered other facts.

“In dealing with the key issues in this case, it is possible that the Supreme Court will comment on these concepts,” he says. “It is possible that future cases may develop along the lines of the established owner/constructor caselaw, such that an owner will be exempted from liability under the OHSA where its obligations as an employer are so limited that it exercises no control at a project.”

If the Supreme Court supports the appeal court’s decision, owners of construction projects will face increased legal exposure under the OHSA, including for current and ongoing construction projects, and Shoor says it may no longer be prudent for an owner to send employees to conduct quality control and maintenance at a work site.

“If upheld, the decision will mean that the standard practice of engaging a GC to manage day-to-day operations, including health and safety matters will no longer insulate a project’s owner from liability under the OHSA.”

In April 2021, Law Times reported that Ontario Court of Appeal Justices Michael Fairburn, David Watt and Grant Huscroft reversed the lower court’s ruling in the Ministry of Labour v. Corporation of the City of Greater Sudbury and found the city was indeed an employer under the Occupational Health and Safety Act and liable for violations to its regulation unless it established a due diligence defence. 

Despite the city’s contractual arrangement with the General Contractor as the constructor and limited involvement at the project, Shoor says the court suggested that if an owner is an “employer” under the OHSA, they may be held accountable for health and safety matters for the entire project. “An owner may be liable for health and safety matters over which it exercises no day-to-day oversight or control,” he says.

The case stemmed from an incident in which, after performing road repair on a construction site in Sudbury, a road grader operated by the city’s contracted company struck and killed a woman. As a result, the city, and the company, Interpaving, were charged with violating Construction Projects, O. Reg. 213/9, contrary to s. 25(1)(c) of the Occupational Health and Safety Act.

The parties were tried in separate proceedings, and the trial judge found Interpaving guilty and acquitted the city because Sudbury was neither an employer nor a constructor and owed no duties under OHSA. He also found that Sudbury had a due diligence defence that cleared them of the charges.

After its appeal to the Superior Court was dismissed, the Crown was granted leave to the Court of Appeal to determine whether the trial judge erred in concluding the city was not an employer under the OHSA, and the court set aside the judge’s decision that the city was not liable.

The Supreme Court granted the application for leave to appeal from the judgment of the Court of Appeal with costs on December 9, 2021.