Table ronde sur le droit de la construction – Décision de la Cour suprême du Canada dans l'affaire R. c. Grand Sudbury (Ville) (en anglais)

TED BETTS: Welcome. Welcome to a webinar presented by the Infrastructure and Construction Law Sector group and the Employment, Labor, and Equalities Group from Gowling WLG, Canada. My name is Ted Betts. I'm the head of our infrastructure and construction group, and we are gathered here today to talk about R. v. Sudbury.

On October 12th, the Supreme Court of Canada rendered its decision in R. V. City of Greater Sudbury on the application of the Occupational Health and Safety Act on two construction projects. To say the decision has caused a bit of a stir in the industry has-- is no small understatement.

Today, we are here to start the process of understanding what the Supreme Court decided, what are the implications for construction projects, and in particular, to owners. I say this is the start of the process because I think it will take quite some time to really digest the full implications and the ongoing future best practices for construction projects.

To start that process, we've gathered some of our experts, both from the construction side and the employment and labor side, to talk to us, first, about the case itself, and then opening up to a panel discussion where we explore some of the implications. And then we've deliberately left a considerable amount of time at the end of the program for questions. If we could go to the next slide.

For this webinar, everyone's microphones are muted, but we are open to questions. If you could fill those out in the Q&A-- at the Q&A icon at the bottom of your screen, you will get to those during the course of the program, and certainly at the end, we will raise any outstanding questions and address them during the one hour that we have. To the extent questions are not answered during this program, we welcome you to follow up with us afterwards, and we will try to circle back to those who have raised questions that don't get answered.

This is an important case. It has significant impact on construction projects and the risks associated with health and safety for owners. And it's important that everybody work together in the industry to understand it and to implement best practices going forward.

To start us off-- sorry, we also note that this program is being recorded. If there are members of your organization who are not able to attend, or if you want to re-watch the program later, feel free to reach out to us and we can provide a copy of the recording. Thank you for joining us.

Our first portion of the program, I will introduce Tushar Anandasagar and Cristina Borbely from our employment Labor and Equalities Group who will give us a summary of the case. And then that will be followed by a panel discussion moderated by our construction litigator Bevin Shores and with, panelists-- myself, Jordan Smith, and Sahil Shoor. And with that, let's get underway.

CRISTINA BORBELY: Thanks, Ted. Good afternoon, everyone. My name is Cristina Borbely. I'm an associate in the Toronto office practicing in the White collar defense and government investigations group, and my practice also includes workplace investigations. Next slide, please. And next slide, please.

Thank you. So in this case, the City of Greater Sudbury contracted with a general contractor to act as a constructor to repair a downtown water main. Pursuant to the contract, the general contractor assumed the role of constructor under the Occupational Health and Safety Act. The GC managed the project and had the responsibility of ensuring that the Occupational Health and Safety requirements were met. Next slide, please.

The City's involvement in the project was minimal-- it only monitored the project. In order to do so, the City sent city-employed quality control inspectors to check for defects in workmanship and on the progress of the project. These inspectors were not authorized to direct or control any of the work performed by the GC or its workers. Next slide, please.

In September 2021, a pedestrian was fatally struck by a road grader that was backing up through an intersection. The Ministry investigated and charged both the City and the GC with violations of the Occupational Health and Safety Act. The City was charged as both a constructor and as an employer. And we will look at these definitions in the panel discussion.

These charges were very similar, and it was likely done to ensure that there was a path to liability in the event that a court found that the City was either not a constructor or not an employer. With respect to being an employer, the charges against the City alleged that on the day of the accident, the City failed to ensure, first, that a signaler was used by the grader operator when required.

Second, that a sturdy fence was erected when a member of the public could be endangered while using a public way. And third, developing and writing and implementing a traffic protection plan for the employer's workers at a project if any of them may be exposed to a hazard from vehicular traffic. Next slide, please.

The GC pled guilty prior to trial, but the charges against the City proceeded to trial. At trial, the City was acquitted of all charges as the trial judge found that it was crystal clear that the GC, not the City, was the constructor. The trial judge also found that the City was not an employer, as the City did not have control of the workplace. It did not therefore have the obligations of an employer under the Occupational Health and Safety Act.

The crown then appealed to the provincial offenses appeal court, which acquitted the City because it did not have control over the workplace. The crown then appealed to the Ontario Court of Appeal. Next slide, please.

The Ontario Court of Appeal overturned the decision of the provincial offenses appeal court judge, finding that the City was liable as an employer under the first branch of the employer definition in the Occupational Health and Safety Act. Relying on its 1992 decision in R. v. Wyssen, the findings of which the Court of Appeal has continually reaffirmed and not revisited, the Court of Appeal confirmed that a party is an employer for Occupational Health and Safety Act purposes if the party employs workers or engages them by contract.

The Court of Appeal did not consider whether under the second branch of the definition of employer, control would be a requirement where work has been contracted to a third party, nor did it consider the City's due diligence defense. The issue was remitted to the trial judge.

The practical outcome of the Court of Appeal's decision was that because the City employed inspectors, the city as an owner took on broad compliance duties on the project despite having delegated the assurance of compliance to a constructor. As a result, owners and employers would be responsible for ensuring overall compliance on construction projects that had previously been the role of the constructor. The City sought and was given leave to appeal by the Supreme Court of Canada. I'll now turn it over to my colleague, Tushar, to discuss the Supreme Court's decision.

TUSHAR ANANDASAGAR: Thank you very much, Christina, and thanks, everyone, for joining us today to talk about this significant case. My name is Tushar Anandasagar. I'm a senior associate at Gowling WLG Waterloo Region office. My practice focuses on employment, labor, and health and safety matters on the management side.

So the Supreme Court's decision in this particular case-- sorry, if I can get you to advance the slide, please, thank you-- was held on equal division, and appeals are typically heard by an odd number of judges, and therefore equally divided decisions are quite uncommon. While in this case we heard-- sorry, the case was heard by a panel of nine judges. Justice Brown of the Supreme Court did not actually participate in the final disposition of the judgment, so we were left with eight.

In this case, the remaining justices were split among those whose opinions aligned with that of Justice Martin, which favored the Crown's position, and those who opposed Justice Martin's opinion, favoring the City's position. Next slide, please.

Occupational Health and Safety Act charges are strict liability offenses in the provinces-- in the province of Ontario. This means that the crown is required to prove, beyond a reasonable doubt, that a contravention of Occupational Health and Safety legislation occurred. The crown does not have to prove that the defendant knew of or intended the contravention. The proof of the act is enough.

However, if the crown can prove the contravention has occurred, a defendant may avoid liability on a balance of probabilities by proving that it exercised due diligence. We'll talk about this some more. Justice Martin issued a single set of decisions on behalf of four judges, supporting the dismissal of the City's appeal.

Justice Martin summarizes this opinion as follows. "The short answer is that while control over workers and the workplace may bear on the due diligence defense, nothing in the text, context or purpose of the Occupational Health and Safety Act requires the Ministry to establish control over the workers or the workplace to prove that the City has breached its obligations as an employer." Next slide, please.

Justice Martin noted that the broad definition of employer under the OSHA, and found that there is no reason to read in a control requirement that the Ontario legislature did not choose to do so. And so there were four key takeaways regarding this. First and foremost, there is actually a complete absence of control language in the definition of employer under the Occupational Health and Safety Act, so that's just a fact.

Second, there's no control language found in paragraph 25(1)(c) of the OSHA. That particular provision starts off by saying, "An employer shall ensure", and then lists off a number of mandatory obligations that the employer has to meet. It addresses health and safety measures to be carried out in physical workplaces, virtual workplace, because the employer's connection to the workplace by virtue of sending employees or independent contractors drives that point.

Justice Martin notes that the use of the word, "an employer shall Ensure" has been found to mean making certain that required measures are taken in the workplace and the language does not include an illusion or express reference to control. The obligations do not focus on an employer's relationship with any particular individual. Cumulatively, these considerations indicate control, according to the plurality of the court, was not a relevant consideration when determining the scope of the City's obligations in this case.

Third key takeaway, the purpose of the OSHA would be undermined. Justice Martin held that the OSHA's purpose would be advanced by imposing an employer's duties on the owner of a construction project even if the owner had divested control over day-to-day operations to a constructor. The OSHA establishes a comprehensive IRS or internal responsibility system. It does not create distinct silos of responsibility, rather, it creates an overlapping and a cooperative way for all parties involved to ensure workplace safety.

And fourth, control is relevant to the due diligence defense. That part of the equation, in providing guidance as to how an employer's level of control should be considered in a defense, Justice Martin agreed that the extent to which the causes of an offense were beyond the control of an owner or employer would be a relevant factor. In the construction context, a judge may find that an owner took every precaution reasonable in the circumstances by evaluating, tendering, and ultimately delegating control to a more experienced subject matter expert, a constructor.

Further, the owner or employer's degree of knowledge, skill, or experience and the likelihood of harm could be relevant to determining whether an employer's relative inexperience might be a factor in the due diligence defense. Next slide, please.

This decision is remarkable because of the objections to the plurality of the court's rationale, their ratio. There were two opposing judgments delivered on behalf of the four remaining justices. The reasons of three opposing judges were delivered jointly by Justices Rowe and Justice O'Bonsawin.

In this opposition, the judges emphasized that whether a regulatory measure applies to a party is different from whether they were diligent in the circumstances, the judges observed that a relationship between an owner and a constructor doesn't necessarily or generally fall within the definition of an employer under the Occupational Health and Safety Act. And if an owner was treated automatically as an employer by virtue of hiring a constructor, it would undermine the design of the Occupational Health and Safety Act scheme as contemplated by the legislation.

The impact of this would be to assign project owners responsibilities that would require them to play an active role across the project, a role that the act has actually sought to avoid by enabling them to contract with a constructor in the first place and divest that control and daily responsibility. While the City was an employer of the quality control inspectors, according to these justices, the applicability of regulatory measures would depend on whether those quality control inspectors were actually in control of the work performed. A regulatory measure may apply to the work of multiple employers, but the core question ought to be, what is the work that an employer is responsible for undertaking on a construction project.

When an employer is given exclusive or shared responsibility for performing a task, they become liable for ensuring compliance with all regulatory measures related to the work that is performed. That is not in doubt. That's a consistent feature of the legislation. However, if a violation of an applicable measure is proven, then the employer must demonstrate the specific steps taken in the circumstances to prevent the breach. Next slide, please.

So these opposition judges agreed that the City met the definition of an employer because it hired quality control inspectors and those individuals came on site. That part is without a doubt and factually correct. However, when it contracted with Interpaving, the constructor in this case, the City did not become the employer of the workers that the constructor retained according to these justices, rather the owner constructor contract reflected a distinct relationship, which is contemplated by the OSHA, and does not generally fall within the employer definition.

As a consequence, according to these justices, the City was the employer of its quality control inspectors and nobody else. The opposition judges would have allowed the City's appeal. Next slide, please. Oh, sorry, if I can just get you to advance the slide. Thank you so much.

The final opposing opinion was written by Justice Cote. Largely-- this decision largely agreed with the other opposing judges, but found that a project owner does not become an employer on the project simply because it sends quality control inspectors to the site. Further, with respect to construction projects, an employer is not responsible for obligations that are specifically imposed on another workplace party, or a party over which they have no control.

A due diligence defense, according to Justice Cote, can only possibly be discharged by an employer on a construction project with some connection to or control over the safety obligation in question. And according to Justice Cote, there was no such connection. As a result, Justice Cote would have allowed the appeal and restored the acquittals that the lower courts had initially put through. Next slide, please. Oh, sorry, the previous slide. Thank you.

As the Supreme Court's decision to allow or dismiss the appeal was evenly divided, the decision does not establish a clear binding precedent for owners, employers, and regulators to follow. The split decision reflects significant disagreement in Canada's highest court on the scope of the duties and responsibilities of an owner or an employer on a construction project.

It is noteworthy in this particular instance that the words absurd or absurdity came up 29 times with reference to either the Ontario Court of Appeals decision or the decision of the plurality of the court. Future cases will likely have to be argued or legislative changes made in order for a definitive answer to be given on the scope of an owner's occupational health and safety duties. Next slide, please.

So what does this mean for the City? The City's appeal has been dismissed, and its case has been referred back to the Superior Court of Justice to review the issue of due diligence. Based on the comments made by the crown before the Supreme Court, and because of the law regarding due diligence, we expect that the crown will argue that the City must show that it took measures to ensure compliance with the requirements of providing for a signaler, erecting a sturdy protective fence, and ensuring that there's a traffic safety plan in place.

The crown actually submitted, during its oral argument before the Supreme Court, that due diligence might be demonstrated by proof of hiring a trusted, fully vetted constructor in the circumstances. However, it also went on to say that it would be arguing for its high water mark i.e. those types of steps would actually be insufficient and a greater standard of involvement would be required of the employer in this case.

Whatever arguments may be made by the Crown and the City, the decision of the Superior Court on the due diligence defense may well be informative, and it is certainly one that we will be tracking in the future. I'd like to transition over to my colleague, Bevin Shores, for our panel discussion. Over to you, Bevin.

BEVIN SHORES: Thanks, Tushar. So as Tushar said, my name is Bevin Shores. I'm a partner in Gowlings Hamilton office. My practice is in litigation and dispute resolution focusing on construction, as well as commercial professional liability, municipal liability, and insurance disputes. And I'll be moderating our panel discussion this afternoon.

So I'll start by introducing our panelists-- joining us this afternoon are Jordan Smith. Jordan is a partner in Gowlings Waterloo region office and practices in the Employment, Labor and Equalities Group focusing on labor and health and safety measures.

Also joining us is Sahil Shoor. Sahil is a partner in Gowling's Waterloo region office as well. He has a litigation and dispute resolution practice focused on construction and infrastructure projects, including public-private partnership, expropriation law, land use, planning, and real property disputes. You may recognize Sahil's name from his commentary in any number of publications, including his recent building brief article on this R. Versus Sudbury decision.

And last but certainly not least, Ted Betts, who you've heard from earlier in this program. Ted's a partner in Gowling WLG Toronto office. He is the head of our infrastructure and construction sector group. He's also the co-head of our transportation and mobility sector group. And Ted is certified by the Law Society of Ontario as a specialist in construction law. So we're really pleased to offer a wide range of expertise and experience on this panel.

Now, a note before we get to the questions-- our comments here are really just the start of the discussion about the implications of this decision. There are, of course, many questions that this decision raises. And to that end, as Ted mentioned earlier, we've reserved time after the panel discussion to open the floor to questions. So we would ask that if you do have questions, please use the Q&A function to submit them, and we'll get to at least some of them in the question and answer session later on.

And with that said, without further ado, we'll start with the questions for the panel. Let's begin with some basics. And Jordan, I'll direct this first question to you. What or who is an employer under the Occupational Health and Safety Act? And can you also address, what are the responsibilities of an employer under the OHSA, and how are they different from that of a constructor?

JORDAN SMITH: Thank you, Bevin. And so I'll start with just a brief reminder of the definitions found in the act itself. The term employer is broadly defined to include those who retain both workers directly as employees, and where you engage with workers as independent contractors. The responsibilities-- the definition of constructor is a person who undertakes a project for an owner, and includes an owner who undertakes all or part of a project by himself or by more than one employee.

So these two terms interact with one another. And one of the key issues we often grapple with is whether an owner is in fact, the constructor, or where the constructor is not clearly identified on a project, who the constructor is. And I often recommend reference to the ministry's constructor guidelines for help in making this assessment. The guidelines state that the intent of the act is to have one person with overall responsibility for health and safety matters on a project. That person is the constructor.

The Health and Safety at a project is a shared responsibility, and the Ministry through its guidelines reminds us that each employer at a project has significant responsibilities for the health and safety of their workers. The constructor is the party with the greatest degree of control over health and safety at the entire project, and is ultimately responsible for the health and safety of all workers. The constructor must ensure that all the employers and workers on the project comply with the act and its regulations. The key distinction there being constructor, overall responsibility, employer responsibility for their workers.

BEVIN SHORES: And so keeping with that thread, Jordan, can you tell us, can you contractually assign the responsibilities of an employer under the OHSA, and if so, to what extent?

JORDAN SMITH: So the majority of the-- majority decision in this case starts with some statements of-- block letter statements of law, which are actually fairly consistent and normal, and those of us who engage in this area of the law regularly recognize them right away. And at paragraph 5 of the decision, the court talks about the act being specifically designed to expand historically narrow safeguards and seeks to protect and promote health and safety by expressly imposing concurrent overlapping broad strict and non-delegable duties on the multiple workplace participants in what is known as the belt and braces strategy.

So to answer your question directly, no. Responsibilities under the act are either applicable to you as a party at the project or not. They are not delegable.

BEVIN SHORES: And so keeping with that thread again, Jordan, can you tell us what has R versus Sudbury done to our understanding of the role and responsibility of an employer.

JORDAN SMITH: Well, really what this decision does is expand the-- arguably expand the scope of how it is that one becomes an employer. The court-- it's important to remember what this decision did and didn't do. The City, in this case, was charged as both an employer and a constructor. At trial, Interpaving pled, as a constructor, to the charges. And so the overall scheme, the familiar approach and structure that we're used to on a construction project was upheld.

The party that was contractually assigned to be the constructor, it was concluded, was the constructor. And now, in this case, the City itself was found to be an employer. And this is the change and the new area of concern for us, in my view, not only because it was sending its quality assurance inspectors to the site periodically, and when it did so, it was undoubtedly the employer of those individuals, but also because as the court says, under the quote-- under the second branch of the employer test the City was an employer of Interpaving with whom it contracted to undertake the construction project.

In other words, the court suggests that the City became an employer because it had subcontracted work to an entity which had workers on site. And that is arguably an expansion of the scope of how one becomes an employer, which is a new issue for us to grapple with.

BEVIN SHORES: Well, thanks for that, Jordan. And Sahil, I'm going to turn to you next. But just a brief note as we're seeing some questions come in through the Q&A, which is great, we're happy to answer anonymous questions. We'll just note that if we can't get to all of the questions, we don't have the ability to follow up with anonymous questions after this webinar concludes. So just keep that in mind when you're posing your questions. But do please keep those questions coming in. This is a really great and really interesting discussion.

So turning to you next Sahil, as we heard from Tushar, this is a split Supreme Court decision. Can you tell us a little bit more about what that means, and what kind of a precedent does that set for the law and industry.

SAHIL SHOOR: So happy to thank you, Bevin. And speaking of Q&A, we are monitoring it and answering the questions as they are coming in. So please, please keep the questions coming in. Going back to the question that you asked, Bevin, what does this mean for the industry. I believe you saw from the slides which Tushar presented on, and in particular, the comments made by Justice Martin in the reasons. and I think one of the alarming examples in my respectful view is the comment in Justice Martin reasons that an owner is an employer because it has contracted the constructor.

I went back into the Court of Appeal's decision, and this was not part of the Court of Appeal decision which found the City was an employer because it employed the quality control inspectors. And this approach was also as, Tushar mentioned, was not advanced by the crown in its written argument, but arose from a comment made by the crown during oral argument, which appeared to have seized on by certain of the Supreme Court judges.

In my view, the notion that owner is always an employer because it has hired a constructor will place an owner in a very challenging position, as Jordan mentioned, in managing occupational health and safety risk. And if the owner surrenders the control to the constructor and then take no steps to ensure day-to-day occupational health and safety compliance, I think that's where the owner is going to find a significant risk in terms of demonstrating the due diligence, because in my respectful view it will become impossible.

However, on the other hand-- the implications of this decision-- if the owner, on the other hand, takes active steps to ensure occupational health and safety compliance on the project, the owner has a significant risk of becoming the constructor with the obligation to ensure that the Occupational Health and Safety compliance by all employers and all workers on the project. And I think this concordant demonstrates the absurdity of the notion contained in Justice Martin's decision. And I think this is something that needs to be looked into very carefully as we consider how a due diligence defense would be made out.

But not being super critical of the reasons, I also submit that Justice Martin's reasons also have really specific comments about the nature of due diligence defense, which may have significant resonance for both employers and folks in the construction industry. And Justice Martin, in his reasons, adopts comments from a well-recognized decision from Yukon Territorial Court and wrote-- and this is what is in the Tushar's slides-- that to the extent to which the underlying causes of the offense are beyond the control of the accused is a relevant factor in assessing due diligence.

And then Justice Martin goes on in his decision to say that the courts and the tribunals should assess, either in absolute or comparative terms, whether an employer had control over the work and the workplace. So those are a couple of the things Bevin that I picked up while working on the building brief and reading the very lengthy decision, that striking the right balance is a challenge, but certainly, there is guidance that is available through which the industry can look at and consider what is and is not going to work for them. Back to you, Bevin.

BEVIN SHORES: So yeah, Ted, perhaps you can weigh on this as well, because one of the big questions is-- as Sahil led into, is what are the possible implications of this decision for owners and employers. Can you speak a little more to that?

TED BETTS: That's right. I mean, we've got a little bit of a confusion because it's a split decision. We do have a Court of Appeal decision which is now the rule of law, but the rest of us have to live with reality on real projects. And what do we have to do now to protect ourselves?

I think, the first and the most important thing we can take away from this is we have to know the rules. I think, there's an opportunity and a need to re-educate yourself or educate yourself for the first time, what are those responsibilities of an employer. I think, turning a blind eye or expecting that you've done all that you need to do as an owner simply by selecting a constructor to take care of health and safety on the site is clearly no longer sufficient, if it ever was, but certainly now, that's the first message.

The charges are a strict liability offense. That means that the onus of proof, they don't have to-- the crown does not need to prove the intent. The onus of showing some kind of due diligence defense falls to the owner. That does not mean it's a high barrier to pass, but you do have to be able to show that it's due diligence defense. And that's in the Court of Appeal decision and in the Supreme Court decision.

So I think it falls into two categories of diligence that you need to make sure you are checking boxes on as an owner. The first before the project even starts-- what kind of diligence did you do when you selected your constructor? Did you look at their credentials? If you asked for references, did you check the references? Did you do any checking on prior charges? What is their history? Did you actually look at their health and safety plan that they proposed to you?

That's in every contract that I've ever drafted, that I asked for that from my constructors on behalf of owners. But are the owners actually looking at that? Did they actually do the own their own internal training on what an employer responsibility looks like? What they have to do as an employer? So there are a number of due diligence steps before you even start the project that you should be looking at carefully.

Once the project starts, the job-- the other message out of the decisions is your job as an employer does not stop. You have an ongoing responsibility under the statute that you cannot contract out of. You cannot just simply say, hey, I've got the constructor running the project so I don't need to do anything. You cannot turn a blind eye. You have some real and separate responsibilities, as an employer, that you have to take seriously.

That does not mean that that's a high bar to pass, but you do have to make sure that you are providing some oversight and some diligence on an ongoing basis. That includes such things as making sure there's regular reporting. If health and safety incidents are reported, that you're following up what was done, what was done-- why was-- why did the incident occur. What was not done before that, what was done after that? How are we making sure it doesn't happen again? What kind of regular on-site review is being done?

There's a big question out there, and Sahil touched on it, and I've seen it in some of the articles on this already, that maybe the lesson out of this is that the owner should stay far away from the site and let the constructor run it, and never run the risk of becoming a constructor or an employer with responsibilities. I think that would be a grave mistake.

I think the lesson that's-- the belt and braces approach that is mentioned in the Court of Appeal and in the Martin decision is saying you have a role. It's not the same as the constructor and you're not responsible to be the constructor, but you can't just step away and assume that everything's being taken care of. You have a oversight responsibility, at the very least, and you have to make sure that your constructor is doing what they're supposed to do.

You don't have to do the constructor role, but you do have to make sure that they are doing what they're supposed to do. And that does not mean daily ongoing review of the work that they're doing but checking in on what reporting is being done, checking in periodically, and not turning a blind eye, and having an internal reporting mechanism in place to say, if there is something that you observe, how are you reporting that internally and then communicating that to your constructor.

So in the Sudbury case, part of the reasoning focused on the fact-- I mean, this is a public street. One of the questions raised in the comments was, was this a worker on the project or somebody from the public? It was somebody from the public. They crossed the street from a public sidewalk through an unbarred part of the road, which should have been barred, and were struck by a vehicle, a construction vehicle. That barrier should have been there.

And it doesn't take a lot to notice that a barrier is not there, that construction is ongoing on a street that's open for pedestrians to walk through. So what are you doing if you notice that? Are you following up on that?

Another key protection on diligence will be documentation. What you don't want-- what you never want is for the Ministry of Labor to show up one day after an incident and ask what happened. And you are only going off a verbal, or we asked them to do this, well, where's your proof? If you cannot document the proof, and if you don't have a history of documenting incidents and oversight, then you're putting yourself at much greater risk.

So those are some of the key diligence things that, I think, every owner really needs to undertake. And in particular, especially in the early days of this when it's all still a little bit new and, as Jordan said, there's clearly a shift in the understanding of the role of the employer. I think, it's incumbent on owners to start getting some training.

BEVIN SHORES: So those are some really interesting considerations about the practical implications. And Jordan, I'm wondering if we can bring you into this discussion from your background on the employment side of things. Most owners don't know construction safety regulations as Ted raised, and that's why they delegate site safety responsibilities to the constructor. So from your perspective what can an owner of the project or property do to protect itself in light of the Sudbury decision, both before construction starts and after?

JORDAN SMITH: Well, Ted's raised and mentioned a good number of really astute items, particularly, around diligence on who it is that you're hiring as a constructor. And there's been a question raised and this is something we've heard frequently as well is to does this mean an owner should simply be hands-off now on a project, and has raised a very good point with respect to the glaring non-compliance on this project.

And I think it's important to step back and remember that when we talk about due diligence in the context of the Occupational Health and Safety Act, we are talking about-- we're not just talking about a legal defense. What we're talking about is a system of checks and balances that are designed to protect people, to prevent accidents from happening.

And so in my view, where there are not-- there is noncompliance, the proper course of action is, of course, to call out and do what you can to bring about compliance. And so that no one should ever disregard glaring safety violations or hazards if you have a role on that project, whatever that role is.

If you've been to a construction project where there's been a fatality or a serious injury, you'll know how difficult and horrific that is, and what the impact of that is on everyone who witnesses it and is involved in investigating it and working on that project. It's really difficult. And we should, of course, take steps to avoid it where we can.

So with respect to the owner, again, I go back to the basic proposition here at the start of the case, which is that the overall structure of the project was upheld, and repaving was found to be the constructor, in this case. And so what is reasonable for an owner, in a project of this nature, who is responsible for the health and safety of their workers, not all the workers on the project?

Well, that owner, who is in this case sending-- has been deemed to be an employer, is responsible should be in that case calling out that hazard and bringing it to the attention of the constructor. The constructor is always the point person on a project to bring forward concerns to. And that would be the starting point.

BEVIN SHORES: And so speaking of starting points, let's go back to the construction contract. And, Ted, I'll direct the next question to you. As you know, well-drafted construction contract will have that clear assignment of health and safety responsibilities to the constructor. Given the R. versus Sudbury decision, is that enough anymore. And if not, what different or additional terms should owners consider including in their contracts?

TED BETTS: And that's one of the magic questions I've already gotten several times by many, many clients. I'm going to I'm going to take a Jordan tactic here and take a step back first and remind, just as he just did, this is about health and safety of people on the job site-- making sure people are safe when they're working. And as an owner, recognizing that these people are building your building, your roadway, your hospital, whatever it may be, for your benefit and putting themselves at risk, and you want to make sure that, on-site, that risk is minimized to the greatest extent possible.

So what we really need is a culture change or in a culture enhancement, I have a lot of I've worked with a lot of engineers or been in meetings held by engineers or contractors, and every meeting always starts with a safety moment. And the reason for that is because they want, at every step of the day, every step of the project, for safety to be top of mind. And it's just a quick little simple reminder that safety is always important, even in a boardroom, to be thinking about and making decisions based on health and safety.

And so that level of approach and culture-- a cultural approach to the project is going to be helpful. That's not in the contract. That's got to be a change before you even start going into the contract. But once you have that mindset, the contract itself starts to take on a different flavor.

So I think there's two kind of categories of contractual changes that I think I would comment on. One is, what's not in the contract or really should be in the contract, and what's often there that should not be. In what should always be in there, we mentioned some of it in the diligence part of our discussion. We want to make sure that the owner has the tools to exercise its oversight responsibilities, that's reporting. Document retention and communication channels are set up.

That a proper health and safety plan has been formed part of the contract, but has been looked at, vetted and reviewed and considered in light of the specific project, not just pulled off the shelf and slapped into a PDF that gets signed and then tucked away in some digital folder somewhere, but that people are looking at that. And that there are tools provided to the owner to enforce the health and safety plans.

Again, you are not the constructor as an owner or an employer, but you do have some oversight responsibility, and you need those tools in the contract that give you the power to enforce the contractual obligations that you're imposing on your constructor. So those are some of the things that-- oh, and reporting process, accident, incident follow up is also going to be important. That should be in the health and safety plan, but that's, again, something, you need to make sure is there and not just assume that it is.

Now, what's in the contract that probably shouldn't be or might raise some risks, we've got-- there's a long tradition of owners looking at their contractor as being the right party to delegate all the construction risks to because they're the construction party. They've done this before and many owners are building, maybe, their first building, or they're not on the site every day so that makes sense. But that can go too far.

There are-- I've seen contracts where the owner has tried to delegate their employer responsibilities, or tried to have the contractor indemnify them, if they have any liability for-- as an employer. Well, that's going to be flat-out against public policy. And once you do that, that kind of a clause could actually be held against you. It looks like you're trying to avoid your responsibilities as an employer. And that's not good-- that's not a good look on you if there is an incident.

Ministry of labor, when there's especially a very tragic incident, these are very intensive and extensive, comprehensive investigations. They will look at the contract, they will look at everything. If they see language in there where it looks like the owner is trying to avoid its responsibility, then that is likely to be exposing them more greatly than they would if they had put into their contract recognition and acknowledgment of their very real and serious responsibilities. So those kinds of clauses are important to be aware of.

I've also seen a number-- and these are-- some of these are very standard too. And we just have to have a close look at them and make sure that they're appropriately drafted and maybe even consider taking them out. So some of these clauses include a right of the owner to take over the project during an emergency, or to take over a part of the project for partial occupancy.

Some part of the building is done, and they want to take over early, start selling condo units, start using some office space that's already complete, start handing over some part of the property to tenants. All of that is raising a risk, as an employer, because you've got more complexity on the project and more chances of something falling through the gaps. So that's not to say that those aren't acceptable provisions, but are you really-- do you really have the tools now in the country contractual mechanism to escalate your responsibility, because now there's probably a higher responsibility because you've got more complexity.

That's all the more so when you're bringing on multiple contractors onto the job site. I think, your oversight responsibility is even greater when you have one general contractor but you bring on some equipment supplier to do their own installation work in a direct contract with the owner. Now, that the constructor is still allowed to be the constructor with oversight over that contractor's work, but you have raised the complexity, you've raised the issues and the oversight responsibilities for an owner in that case.

So those clauses, as I said, are not verboten. But we've just heightened our concern that these are exposing owners and they need to be looked at with fresh eyes and look at the whole procedure that's around them.

BEVIN SHORES: So lots to consider there, Ted. And you've given us a lot to think about with respect to what people can do moving forward. We've got a lot of great questions in the Q&A. So before we turn it over to some of those, just wondering if I can get your quick key takeaways from the panel. Jordan, let's start with you. Well, Jordan, you're on mute.

JORDAN SMITH: And my key takeaway is that the-- I, again, go back to the basic premise that the constructor structure of this project was upheld but what does that mean, especially as it relates to the finding that the City was an employer. Let's look at the concept of due diligence from both of their perspectives. And always remember that this theory, this principle that we operate on is still in place.

As a constructor-- if you're acting as a constructor, it will always be more difficult for you to prove due diligence, because you have overall responsibility, because you have overall control. As an employer, conversely, the proposition still stands, whether you're an employer who is an owner or an employer who is not an owner. Your degree of control at the project is less than that of the constructor.

And so conceptually, it will be easier for you to make a due diligence defense. Always fact-specific, but let's keep in mind that those key concepts, those key structures of how we think about a project as it relates to the Occupational Health and Safety Act, remain in place.

What also has not changed is the critical importance of staffing projects with good qualified, competent health and safety professionals, because in the due diligence cycle, identifying risk, mitigating risk, training, supervising, it's always the supervision, or most typically the supervision and the follow-up, and ensuring compliance with those good policies, procedures, and the regulations where we typically see gaps occur. And that's where you need someone strong, in a position of competence and responsibility, who will identify and address those issues.

BEVIN SHORES: Thanks, Jordan. And Sahil, anything to add? What's your key takeaway?

SAHIL SHOOR: I agree with everything that Jordan has said. And I think in terms of the due diligence defense, I think having-- not only having it but also a comprehensive safety management plan, that you can address and speak to and how it was kept up to date and followed during the execution phase of the construction will be helpful. And like Ted mentioned in one of the responses, having an ongoing engagement supervision with the traits and the constructor, so that you can update the plan, if and when required, so that you can make out your due diligence events would be my one piece of takeaway.

BEVIN SHORES: And Ted, I'll give you the last word before we turn it over to the Q&A questions, what's your key takeaway?

TED BETTS: Well, rather than repeat the key takeaway, which I think has been repeated a couple of times that the role as employer is real and it's distinct and you have to take it seriously. But I'll throw out something a little bit in addition to that, for the contractors out there, the ones who are the constructors. This is a great opportunity for the good ones out there because there will be more emphasis on projects on health and safety.

You are doing yourself great favors by ensuring you have the credentials, you have brushed off-- brushed up on your health and safety management plans, that you've got a good safety record, and that you're looking to help the owners get over this learning curve by providing training and quality personnel, and education on what's required for a very health-- and healthy and safe job site. And that's going to benefit everyone. So that I'll leave that on as my last comment.

BEVIN SHORES: Right. And then thanks, everybody. And so, Tushar, I think, you're going to take us through some of the questions that came in over the Q&A. We'll turn it over to you.

TUSHAR ANANDASAGAR: Thanks very much, Bevin. Excuse me-- this is an open question for any of the panelists, and a great one right up at the top of the open questions. Does the SCC's decision mean that the municipality or the owner in this situation should not do compliance and quality checks. That's sort of part 1. And then the second is, what the fact that they entered the site with QC inspectors or at all trigger any sort of additional liability in the circumstances?

TED BETTS: Who wants that one first?

SAHIL SHOOR: I'll take that one, because I've addressed that question for another municipality. I think-- I don't think we should take the decision to mean that what you should not do. You have obligations under not only the Occupational Health and Safety Act but other acts through which you issue a building permit, for example, and in terms of which the inspections come into play and the inspections, which you may conduct in your capacity as a municipal owner of the property to which that particular building permit applies.

I think the dialogue that needs to occur now is when you do conduct an inspection, what are the parameters associated with how that inspection will be conducted, number 1, who will be present when an inspection will be conducted. And in terms of the parameters, how those parameters are actually going to be put into place in order to ensure that documentary record reflect very clearly as to how the inspection was conducted, when it was conducted, how it was conducted, and what was inspected.

TED BETTS: I'd add to that to say, there might be some risk that going on site and one of your personnel see something and don't report it. So there might be some elevated risk of exposure. I'd say the greater risk to you is not doing anything at all, because that's a clear neglect of your OSHA responsibilities as an employer. Providing no oversight is guilty as charged. You have no defense-- you have no diligence defense then. And that's the most dangerous and most riskiest.

SAHIL SHOOR: Tushar, next question for you, I think, this is right up your alley, if an owner retains a third party health and safety company to conduct regular site reviews, would this demonstrate due diligence on behalf of the owner or add more risk to the owner?

TUSHAR ANANDASAGAR: Looking at the-- and thank you, Sahil, I was actually going to ask that question to Jordan, I had just messaged him on the chat. But looking at the Supreme Court's decision, that's an open question. We have Justice Martin's observations, which suggest that the delegation of this responsibility and potentially identifying that the owners-- their expertise is less than the third-party health and safety consultant or less than the consultant-- the contractor-- excuse me. That might actually be a factor which reduces the owner's liability in the grand scheme.

But we do not have a definitive position on that as yet. And at the end of the day, I think the standard control analysis that has occurred in health and safety case law in the past may very well come into play here. Jordan, maybe I can ask you to comment on that.

JORDAN SMITH: Well, it's an interesting question because, of course, from the owner's perspective, that's why you hire a competent, qualified constructor, is to take responsibility for exactly this type of thing. So the question-- the suggestion not from the questioner but from the case itself, that there is an additional step required by an owner in addition to hiring the constructor, is it troubling, and in my view, a bit of a slippery slope in terms of where does compliance-- where does the bar for compliance stop?

I don't think you can get in trouble and from assigning individuals to go to the site. And arguably, that's what the City's quality assurance inspectors were, in this case. What was the purpose of them attending the site? It was to check on the status and ensure any issues were being followed up with.

And in that regard, you could have a checklist, a standard safety checklist that those inspectors could utilize and hand into the constructor after a visit to site. And that way, there's no-- you're documenting due diligence, whether that's through your own or through a third-party. But in my view, it's not a necessity to establish due diligence for you to take that extra step.

SAHIL SHOOR: Now, thank you both, Tushar and Jordan. Ted, anything-- any final words?

TED BETTS: I saw a few questions along a similar theme and thought I'd address it because we-- I don't think we have, and that's consultants and architects and other third parties who are coming on site doing their role and their job and to does this case have any implications for them. I think an owner is in a unique spot from other consultants who come on to the site, because the owner has hired the constructor. And the ruling from the Court of Appeal and from the Martin decision at least is that by hiring the constructor, they were an employer of the constructor.

So there's some question, I think, a lot of people in the bar have about whether that was the right interpretation, but that is what we have for law now. But that would also mean there's nothing in the case that would say, an architect coming on site is suddenly responsible for health and safety oversight of the constructor. They would always, and still-- the act still calls them an employer for their own employees.

So they do and always have had employer responsibility for their own employees on site. But that will not-- unless Jordan or Tushar can tell me that there's something that now if they observe something, they've got some other responsibilities. Obviously, it would be good for them to do so in a health and safety culture that we want to build, but there's no statutory obligation to do so.

SAHIL SHOOR: All right, Ted. Our time is up. Anything that we want to leave the attendees with, other than what we've told them already?

TED BETTS: So I want to thank everybody. Obviously, a lot of attention, a lot of concern and interest in this case. And what it means and what people need to do going forward. We had a lot of attention to our earlier article. We do have a number of plans for additional learning. We have an article that we're working on with some of the collected best thoughts on best practices going forward, especially for owners.

We are planning another webinar in January, where we are hoping with the balance of an additional month, we'll have had a little bit more time to digest and think through and talk with experts. And so we're going to bring in some experts not just lawyers, but people who are working in the field, with their thoughts on best practices and what can be done. And so look out for that.

And think ultimately, there was a question on what should we do to change this ruling. I don't know that we can go and change it, but it is law now, based on the Court of Appeal, as interpreted by the Supreme Court. And so we might very well see some changes in the legislation or the regulations, which has to come from the government obviously, or we might have to wait for another case.

So we're going to be monitoring this regularly. And if you haven't already subscribed to our distribution list for our building brief, which is a periodic publication that we put out with current news on construction law issues, then please do so, and then you'll get up to date information and learning as we go, as well as invitations to future events.

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