SUMMARY DECISION NO. 890/94

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1 SUMMARY DECISION NO. 890/94 Buhagiar v. Jantree No. 6 Inc. Right to sue; Jurisdiction, Tribunal (right to sue) (action against insurer); Employer (definition of); Election; Subrogation; Class of employer (operation of building). The plaintiff in a civil case was a worker of heating and air conditioning company. The plaintiff was injured while climbing a ladder on the outside of a building owned by the defendant. The defendant brought a third party claim against the lessee of the building and the companies that constructed the building. The lessee brought a fourth party claim against its insurance broker. The insurer of the lessee applied to determine whether the plaintiff's right of action was taken away. The plaintiff had claimed workers' compensation benefits but then returned the cheques for benefits to the Board. However, he did receive health care benefits. The receipt of health care benefits was deemed by the Board to be an election under the Act. However, the Board granted the authority to maintain the action. There was an issue whether the owner of the building was a Schedule 1 employer. It did not report to the Board. It was not necessary to determine whether it came within Class 25, items 3 or 4, since there was no evidence that the owner of the building employed any workers. The Panel concluded that the owner was not an employer. Accordingly, the right of action against the owner was not taken away. The third parties were Schedule 1 employers. The owner was not liable under s. 10(11) for the portion of loss or damage caused by the third parties. The action against the insurance broker was not an injury for which benefits are payable under the Act. The Panel did not have jurisdiction to determine questions related to the contractual obligation to maintain adequate insurance. [15 pages] PANEL: Sutherland; M. Cook; Barbeau DATE: 13/06/96 WCAT DECISIONS CONSIDERED: Decision No. 965/87I (1988), 8 W.C.A.T.R. 214 distd; Decision No. 909/89 (1990), 13 W.C.A.T.R. 274 refd to; Decision No. 299/92 (1993), 26 W.C.A.T.R. 155 refd to; Decision No. 481/93 (1993), 27 W.C.A.T.R. 307 refd to; Decision No. 543/93 (1993), 28 W.C.A.T.R. 180 refd to; Decision No. 965/87 refd to

2 WORKERS COMPENSATION APPEALS TRIBUNAL DECISION NO. 890/94 This Section 17 Application was heard on November 3, 1994, by a Tribunal Panel consisting of: S.J. Sutherland: Vice-Chair, P.A. Barbeau : Member representative of employers, M. Cook : Member representative of workers. THE SECTION 17 APPLICATION Guardian Insurance Company of Canada (Guardian Insurance), as the insurer of the third party, Daemar, in Ontario Court (General Division) Action No /90Q C, and as the fourth party in the action, made an application pursuant to section 17 of the Workers Compensation Act (the Act ). The insurer for Daemar seeks an order that the Plaintiffs right to sue has been taken away by the Act. M. Snowden represented the Applicant, Guardian Insurance. R. Parker represented the Plaintiff/Respondent, J. Buhagiar and the following members of his family: P. Buhagiar, C. Buhagiar, J. Buhagiar, and S. Buhagiar. D. Cheifetz represented the Defendants/Respondents, Jantree No. 6 Inc. (Jantree) and P. Merklinger (Merklinger). D. Edmonds represented the third party/respondent, Daemar Inc. D. Forsyth represented the third party/respondents, IWD Construction (IWD) and Ferracorp Holdings (Ferracorp). B. Stradwick represented the fourth party/respondents, K. Allen, Allen & Savage Insurance Brokers Ltd. A. Balevi and S. Martel of the Tribunal Counsel Office assisted the Panel. THE EVIDENCE Exhibit #1 : Exhibit #2 : Exhibit #3 : Exhibit #4 : Exhibit #5 : Exhibit #6 : The following were marked as exhibits: Section 17 Applicant s Statement and supporting documents, from the Defendants, Jantree and Merklinger; Document Brief from the Defendants, Jantree and Merklinger; Notice of Section 17 Hearing with attached letters; Section 17 Applicant s Statement from the Applicant, Guardian Insurance Company; Applicant s Pleadings Brief; Applicant s Book of Authorities; Exhibit #7 : Applicant s Document Brief; Exhibit #8 : Applicant s Supplementary Book of Authorities; Exhibit #9 : Respondent s Section 17 Statement; 1

3 Exhibit #10: Exhibit #11: Affidavit of W. Pirie; Invoice: A.C.T. Mechanical Contractors (ACT). Testimony was given under oath by D. Ferracuti, who was a co-owner of ACT, and the employer of J. Buhagiar at the time of his accident, and D. Forsyth, the lawyer representing Ferracorp and IWD. After the hearing, the Panel asked Mr. Balevi to do the following: 1. Contact Mr. Cheifetz, who represented Jantree, and ask for a description of his client s business, and submissions on whether the corporation fit within the Act s definition of an employer. 2. Determine whether there were Tribunal Counsel Office submissions that address (a) the liability of landlords, and (b) whether a corporation is an employer if it contracts out all its work (e.g. snowploughing, gardening, etc.) Mr. Balevi was instructed that if there were no such submissions, he should prepare submissions on this question for the Panel. 3. Inform the parties that we required further information with respect to whether Mr. Buhagiar claimed and/or was paid workers compensation benefits. When Mr. Balevi obtained the above listed material, he circulated it to the parties for final written submissions. Mr. Buhagiar s claim file was obtained from the Board. Mr. Parker approved the release of the file to the parties. The Panel received it on April 12, The submissions of the Tribunal Counsel Office with respect to the liability of landlords were prepared by S. Martel and the Panel was informed on September 20, 1995, that they had been forwarded to the parties for submissions. On October 17, 1995, the majority of the parties final written submissions were provided to the Panel. Mr. Parker provided his submissions in a letter dated October 20, Ms. Edmonds made her submissions on October 26, On November 9, 1995, Mr. Cheifetz wrote the Tribunal Counsel Office, objecting to the Panel receiving Mr. Parker s submissions, because they were late. The Panel ruled that, since Mr. Buhagiar is a party in the Action, his representatives may make submissions as of right. This ruling was conveyed to the parties in a letter from Ms K. Hardinge-Brown, dated December 12, THE NATURE OF THE CASE Mr. Buhagiar was a temporary maintenance assistant employed by ACT. On October 10, 1989, he and a co-worker were dispatched to a building owned by Jantree and leased to the third party, Daemar. The purpose of their attendance at this building was to carry out routine repair and maintenance of the air conditioning and heating units located on the roof of the building. 2

4 Mr. Buhagiar climbed a ladder attached to the side of the building to gain access to the roof. As he approached the top of the building, the ladder detached from the building. Mr. Buhagiar fell to the ground, and was injured. Mr. Buhagiar filed a workers compensation claim after his accident, and received about $15, in health care benefits. He also received cheques representing benefits to which he was entitled by virtue of being temporarily totally disabled, but he returned these, uncashed, to the Board. On May 8, 1990, Mr. Buhagiar and his family commenced an action in Ontario Court (General Division) seeking damages for the accident. This action was against Jantree as the owner of the premises, and Merklinger, who was an executive officer of Jantree. The claim was made pursuant to the Occupiers Liability Act, it being alleged that the owner of the building was negligent with respect to the design, installation, inspection, maintenance and repair of the ladder, and did not warn Mr. Buhagiar that it was defective. In the alternative, Mr. Buhagiar relied on the doctrine of res ipsa loquitur. Jantree and Merklinger claimed against the third parties, Daemar, IWD, and Ferracorp. With respect to Daemar, Jantree claimed that the lease between Daemar and Jantree had the result that Daemar was liable for injuries to anyone on its premises. Further, it was Jantree's claim that the lease required Daemar to carry "comprehensive liability insurance" which would insure Jantree against any damage claims. Similarly, Jantree claimed that it was "a term and condition of the contract between it and IWD Construction Inc. and Ferracorp Holdings Inc. that these third parties would indemnify it for any liability arising out of the construction of the building." In addition, it was Jantree's contention IWD and Ferracorp either constructed or were responsible for the construction of the building and the installation of the ladder. If the premises were unsafe due to faulty construction, then Ferracorp and IWD, as the constructors, were responsible. Daemar claimed against Allen, Allen and Savage Insurance Brokers, and Guardian Insurance. In this action, Daemar claimed that they provided Allen and Allen and Savage with sufficient information on which to determine the extent of insurance coverage they required, and they relied on Allen and Allen and Savage's advice in this regard. In the action against Guardian, Daemar claimed that it had commercial general liability coverage with Guardian that ought to have covered this claim. The application to the Tribunal was brought by Guardian Insurance, pursuant to section 17 of the Workers Compensation Act, which says: 17 Any party to an action may apply to the Appeals Tribunal for adjudication and determination of the question of the plaintiff's right to compensation under this Part, or as to whether the action is one the right to bring which is taken away by this Part, or whether the action is one in which the right to recover damages, contribution, or indemnity is limited by this Part, and such adjudication and determination is final and conclusive. The issue to be determined by the Panel, is whether the proceeding is barred by section 10(9) of the Workers Compensation Act, which says: 3

5 10(9) No employer in Schedule 1 and no worker of an employer in Schedule 1 or dependant of such worker has a right of action for damages against any employer in Schedule 1 or any executive officer or any director or any worker of such employer, for an injury for which benefits are payable under this Act, where the workers of both employers were in the course of their employment at the time of the happening of the injury... In deciding this issue, the Panel must determine: 1. whether the Respondent, J. Buhagiar, was a worker in the course of his employment, when he was injured on October 10, 1989; 2. whether Jantree, Daemar, IWD, and Ferracorp were Schedule 1 employers at the time of Mr. Buhagiar s accident; 3. if Jantree, Daemar, IWD, and Ferracorp were Schedule 1 employers at the time of Mr. Buhagiar s accident, whether a worker of the employers was in the course of his or her employment at the relevant time; THE PANEL'S REASONS (i) Testimony of D. Ferracuti Mr. Ferracuti said that he was a co-owner of ACT at the time of Mr. Buhagiar s accident. His partner in the enterprise was K. Warren, who was responsible for scheduling. The company was in the business of installing and servicing air conditioners, and had eight hourly rated employees. Mr. Buhagiar was hired by ACT to assist on small maintenance jobs, in the summer of He was not a qualified technician, and Mr. Ferracuti said he considered Mr. Buhagiar to be casual help. Amongst the company s contracts was one with Daemar to maintain the air conditioning equipment in the building it leased from Jantree. Mr. Ferracuti testified that he did not witness Mr. Buhagiar s accident, but the co-worker with whom Mr. Buhagiar was working gave him a statement afterwards. His testimony with respect to the accident was based on his recollection of that statement (he did not make any notes at the time). Mr. Buhagiar and the co-worker were sent to the Jantree/Daemar building on October 10, 1989, for the routine maintenance of the equipment. The co-worker was the technician on the job, and Mr. Buhagiar was there to help him. The co-worker was aware that the ladder was loose, had notified Daemar that it was loose on the previous inspection, and had asked Daemar to have it repaired. On October 10, 1989, the co-worker went up the ladder first, noticed that it was still loose, and called down to Mr. Buhagiar, cautioning him to be careful. Mr. Ferracuti said that Mr. Buhagiar was not careful and he fell to the ground when the ladder came away from the building. By not careful, he meant that Mr. Buhagiar was talking with his co-worker as he ascended the ladder, and was not paying attention to what he was doing. 4

6 Mr. Ferracuti stated that each service vehicle was equipped with a full extension ladder. Loose ladders on buildings were common, so he instructed his employees to use the ladder he provided, rather than an unsafe one. ACT was registered with the Board and reported the accident. Mr. Buhagiar was in the Downsview Rehabilitation Centre for a time, and ACT co-operated with Vocational Rehabilitation (VR) Services at the Board, in Mr. Buhagiar s rehabilitation. (ii) Testimony of D. Forsyth Mr. Forsyth said that he was the owner of Mason Kemp Ltd., a company in the business of doing workers compensation cost control. He also represented Ferracorp, and from his review of the circumstances with the principals of Ferracorp, was prepared to testify with respect to its relationship with IWD. Mr. Forsyth testified that Ferracorp obtains contracts for the design and construction of buildings. It hires architects to do the design work and it manages the projects. IWD does the construction. The building on which Mr. Buhagiar was injured, was a joint venture, although for workers' compensation purposes, each firm had its own account. The building was constructed in 1987 and 1988, and was occupied in Throughout the period at issue, both firms were registered as Schedule 1 employers. Mr. Forsyth went on to say that the design of the building did not include the installation of ladders. After the building was completed, Jantree asked that a ladder be installed. Because the construction was finished, the ladder was designed, manufactured, and installed by Prozac Steel. Prozac Steel submitted its invoice to IWD on June 28, It was Mr. Forsyth's testimony that neither Ferracorp nor IWD had anything to do with the construction, design or maintenance of the ladder. Further, Ferracorp and IWD had nothing more to do with the building after construction was completed. (iii) Mr. Snowden's submissions Mr. Snowden directed the attention of the Panel to Class 25 of Schedule 1 of the Act. This class includes: 3(i) Operation of an office building whether operated as a business or by the operator for his own use; and 4 Operation of a building rented wholly or partly for manufacturing, retailing, wholesaling or warehousing. He referred to an affidavit from W. Pirie, who was not identified in any way. This affidavit stated in part: 1. Daemar Inc. used a portion of the premises as a warehouse. It also occupied office space in the premises. From Mr. Snowden's perspective, the affidavit demonstrated that Daemar and Jantree were Schedule 1 operations. 5

7 Mr. Snowden submitted that there was no issue with respect to whether Mr. Buhagiar was a worker in the course and scope of his employment when the accident happened. No evidence to the contrary was given and all the parties were in agreement on this fact. He suggested that it would confuse matters to get into details about Daemar, IWD, and Ferracorp. He further submitted that on the facts, Mr. Buhagiar had no right of action. In the alternative, in Mr. Snowden's submission, IWD, Ferracorp, and Prozac Steel were all Schedule 1 industries and immune from suit. Mr. Snowden referred the Panel to Decision No. 965/87, which he said was analogous to the case before us. Decision No. 965/87 dealt with a building that had various uses and the owner of the building was not registered with the Board. The Panel in that case found that the building fell within Class 25. Mr. Snowden suggested that, to read the class sensibly, landlords had to be included in the class. In Mr. Snowden's view, the Panel had to conclude that the Workers' Compensation Act did not allow the action. (iv) Mr. Cheifetz' submissions Mr. Cheifetz said that the fact that the ladder was requested for the building by Jantree was a key point. This showed that Jantree was actively involved in the operation of the building, which brought it within Class 25(3) or (4) of Schedule 1. Mr. Cheifetz noted that the building was built for Jantree. The lease between Jantree and Daemar contained clauses that delineated the obligations of the parties with respect to maintenance. He suggested it would be "silly" to tell an owner that if it let a tenant do maintenance under a lease, the owner would cease to operate the building and would lose the protection of the Act. He submitted that, although Jantree was not registered with the Board, this was an irrelevant consideration; Jantree was an employer with respect to workers' compensation provisions. Mr. Cheifetz reminded the Panel that our concern was with the factual substratum that gave rise to the claim. In his view, the facts were simple. A ladder was put on the building by workers of a Schedule 1 employer. Mr. Buhagiar was a worker who suffered an injury in the course of his employment. Through the application of the Workers' Compensation Act, he was not entitled to sue. (v) Mr. Parker's submissions With respect to Mr. Ferracuti's evidence, Mr. Parker pointed out that it differed in several significant aspects from the written statements of eyewitnesses that were prepared a week after the accident. Mr. Parker requested that the Panel interpret Class 25 narrowly. If we did this, we would find that Daemar, and not Jantree, was the operator of the building. He referred the Panel to the lease between these parties, and in particular, to paragraphs 1(h) and 10, which say: 1(h) Use of Premises: a warehouse for storage of industrial parts and components from which such parts and components will be distributed to purchasers and an office for use in connection therewith all in keeping with a first class industrial building; 6

8 10.01 Maintenance and Repairs of Premises At all times throughout the term, [the] Tenant at its sole expense shall perform or cause to be performed as required hereby such maintenance, decoration, repairs and replacements to keep the Premises, including the Lands, the Building and all the contents thereof, and all services, equipment and systems serving the Premises at all times in first-class appearance and condition, and in accordance with all Laws, and the Landlord's reasonable requirements, but excluding those obligations of [the] Landlord expressly provided in sections 9.04 and hereof, and excluding repairs to the roof, walls, and floors of the Premises, defects necessitated by design or construction, in the sole determination of the Landlord, unless the repairs shall have been necessitated by damage caused by acts or omissions of the Tenant, whether negligent or otherwise. In Mr. Parker's submission, these clauses demonstrate that Jantree was a holding company that owned the building but did not operate it. Daemar's obligations under the lease were essentially with respect to the "cosmetics" of the premises. He reasoned that Mr. Buhagiar's claim was against the landlord, Jantree. (vi) Ms. Edmonds submissions Ms. Edmonds stated that Daemar was operating a warehousing business in a building leased from Jantree. In her view, Jantree's business was collecting rent. It did not operate the building. (vii) Post-hearing submissions (a) Mr. Cheifetz' with respect to Jantree's business On April 12, 1995, Mr. Cheifetz wrote the following: Jantree No. 6 was in the business of owning and operating a building rented wholly or partly for manufacturing, retailing, wholesaling, or warehousing. Jantree No. 6 Inc. was a corporation. Corporations only act through people. The relevant portion of the definition of "employer" in the Workers' Compensation Act provides that "employer" "includes every person having in the person's service under a contract of hiring or apprenticeship, written or oral, express or implied, any person engaged in any work in or about an industry." The Act provides that "industry" "includes an establishment, undertaking, trade, business or service." Jantree No. 6 Inc., in operating its business for profit - the rental of the warehouse - must fall within the definition of "industry." Part of the Jantree business was collecting rent and of course keeping the records that relate to the operation of the business being the rental of the building to Daemar Inc. The person or people who took care of the Jantree records for the purpose of permitting it to run its business 7

9 1995. have to be considered, in this context, its employees whether or not these people are paid wages or remuneration in the traditional sense. Otherwise, we create the non-sensical situation where, with no change in the nature of the industry whatsoever, a corporation such as Jantree would be an employer if it hired someone for $1 a year, for example, for the purpose of calling Daemar once a month, or whatever the rent period was, to remind Daemar to send in its rent cheques but nothing more. (b) Tribunal counsel submissions with respect to the liability of landlords Ms. Martel responded to the Panel's request for submission on this matter, on September 8, Ms Martel stated that there was some question as to whether Jantree was an employer because it had no workers. She set out the definitions of "employer" and "worker" in the Act, and noted the differences in wording. She submitted that the definition of employer included a person who contracts for the provision of services such as snowploughing or gardening. She referred to three Tribunal decisions (Decisions No. 481/93, 543/93, and 909/89). In each of these decisions the panels held that an employer must have workers. (c) Mr. Snowden's final submissions Mr. Snowden requested, on June 8, 1995, that the Panel find that Mr. Buhagiar was a worker in the course and scope of his employment with a Schedule 1 employer, at the time of his accident. In addition, he requested that we find that Daemar was a Schedule 1 employer at the relevant time. If the Panel were to find that Mr. Buhagiar's injuries resulted from Daemar's negligence, he requested a declaration under s. 10(11) of the Act, that no damages were recoverable against either Daemar or the other Schedule 1 employers named as third parties in the action. In a letter dated September 18, 1995, Mr. Snowden submitted that "Jantree's exposure should be limited to its own negligence" and this ought to be determined by a Court. Mr. Snowden reminded the Panel that in the circumstances of this case, if the Panel were to find that the right to sue was not taken away, Mr. Buhagiar's right of action was vested in the Board. (d) Mr. Cheifetz' final submissions Mr. Cheifetz' initial submissions were dated April 12, He noted that the Board file showed that Mr. Buhagiar received workers' compensation benefits. That being the case, it was his view that Mr. Buhagiar could not proceed with the action, even if the cause of action was not taken away. In the latter case, the Board may have a subrogated action, but, he submitted that is not the action before this Panel. On October 6, 1995, Mr. Cheifetz submitted his final comments. He adopted Ms Martel's submissions with respect to the definition of "employer", that is, "the definition of employer includes persons who contract out all their work." He added that the word "includes" in the Board's definition should be given a literal interpretation. 8

10 He suggested that the lease between Jantree and Daemar was a contract that required Daemar to maintain the premises. This should be interpreted as a "contract of hiring". The following quotation sums up his position on this matter: Accordingly, Jantree, by having a contract (the lease) under which the building maintenance was done on its behalf by Daemar, the tenant, had Daemar in its service for that purpose. It had hired Daemar to do the work for it. In the terms of the Act, it had a contract of hiring with Daemar. His final submission on this matter was that common sense required that Jantree be protected by the Act. He posited two scenarios. In the first, Jantree had one employee whose duties had nothing to do with Jantree's business as a landlord. The second scenario is the one before this Panel: Jantree has no employees. In Mr. Cheifetz' view, it makes no sense to afford Jantree the benefit of the Act in the first scenario but not in the second. Mr. Cheifetz commented on the three decisions to which Ms Martel referred in her submissions (Decisions No. 909/89, 481/93, and 543/93). In each of these, the panels found that employers were required to have workers. Mr. Cheifetz submitted that these decisions were flawed by a misreading of the legislation because the definition of employer does not include the requirement that it have workers. Mr. Cheifetz concluded that Jantree and Merklinger were entitled to a declaration under section 10(9) of the Act. However, in the event that the Panel decided that they were not entitled to this declaration, in his submission, the Tribunal did not have jurisdiction to determine all claims for contribution or indemnity that Jantree might have against Daemar, IWD, and Ferracorp. Specifically, it was his view that the Tribunal did not have jurisdiction to deny claims based on the contractual obligation of the other parties to obtain liability insurance to protect Jantree from claims such as this one. (e) Ms. Edmonds' final submissions On April 24, 1995, Ms. Edmonds wrote that she was "dismayed" to find that the WCB had expended about $15, on Mr. Buhagiar's claim, and that his counsel had been aware of this fact since at least She noted that the file did not contain any indication that the Board's expenses were to be asserted as a subrogated claim. She submitted that Mr. Buhagiar's eligibility should be determined as at the date of the hearing, November 3, On June 12, 1995, Ms. Edmonds adopted Mr. Snowden's submissions and requested that the matter be disposed of as he proposed. (viii) Portions of the Workers' Compensation Act not referred to above Section 1(1) of the Act defines "employer" as: "employer" includes every person having in the person's service under a contract of hiring or apprenticeship, written or oral, express or implied, any person engaged in any work in or about an industry and includes,... "Worker" is defined as: 9

11 (ix) "worker" includes a person who has entered into or is employed under a contract of service or apprenticeship, written or oral, express or implied, whether by way of manual labour or otherwise, and includes,... but does not include an outworker, an executive officer of a corporation, or a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's industry. 5. Employers in the industries for the time being included in Schedule 1 are liable to contribute to the accident fund as herinafter provided, but are not liable individually to pay compensation. 10. (11) In any action brought by a worker of an employer in Schedule 1 or dependant of such worker in any case within subsection (1) or maintained by the Board under subsection (4) and one or more of the persons found to be at fault or negligent is the employer of the worker in Schedule 1 or an executive officer or director thereof, or any other employer in Schedule 1, or an executive officer or director therof, of any worker of any employer in Schedule 1, no damages, contribution or indemnity are recoverable for the portion of the loss or damage caused by the fault or negligence of such employer of the worker in Schedule 1 or an executive officer or director thereof, or of any other employer in Schedule 1 or executive officer or director therof, or of any worker of any employer in Schedule 1, and the portion of the loss or damage so caused by the fault or negligence of such employer of the worker in Schedule 1 or an executive officer or director thereof, of any other employer in Schedule 1 or an executive officer or director therof, or of the worker of any employer in Schedule 1, shall be determined although such employer or executive officer or director or worker is not a party to the action. Conclusions (a) Was J. Buhagiar, a worker in the course of his employment, when he was injured on October 10, 1989? No argument was presented to the effect that Mr. Buhagiar was not a worker in the course of his employment at the time of the accident. Indeed, his then representative, M. Campbell, wrote the Board on November 12, 1989, and stated that he was. Similarly, there was no dispute that Mr. Buhagiar's employer, ACT, was a Schedule 1 employer. The Panel finds that Mr. Buhagiar was a worker, employed by ACT, a Schedule 1 employer, and that he was in the course of his employment at the time of the accident. 10

12 (b) Mr. Buhagiar's workers' compensation claim and right of action It appears from the file, that Mr. Buhagiar returned the cheques that the Board issued to him. However, the Board paid health care expenses in the amount of $13, Interest has been accumulating on these expenses. On February 7, 1990, the Board's Senior Legal Counsel informed the worker's then representative that by taking health care benefits, Mr. Buhagiar had been deemed to have made an election under the Act. However, if he agreed to reimburse the Board, the action could proceed. In a letter dated September 23, 1991, the Board s Senior Legal Counsel informed the worker's representative that she had sent the representative's predecessor an Acknowledgement that would permit Mr. Buhagiar to pursue the lawsuit, once it had been executed and the Board was assured that its interests would be protected. As of that date, the Acknowledgement had not been executed and returned. On April 17, 1995, Mr. Buhagiar signed a direction, authorizing his representative, Mr. Parker, to reimburse the Board the monies it paid as a result of his claim, from any settlement or recovery that resulted from his action. While dated April 17, 1995, this direction stated that it was to take effect as of October 10, The issues around the subrogation of a worker's right of action are canvassed in Decision No. 299/92. Basically, when an injured worker has received compensation benefits, the worker's right of action, if any, is subrogated to the Board by virtue of the provisions of section 10(4) of the Act. Since the Board then has control of the litigation, the Board can approve or authorize the worker to conduct the litigation. This Panel is satisfied that Mr. Buhagiar received health care benefits from the Board, after his injury. The result of his receiving these benefits is that he was deemed to have made an election and the Board was subrogated to any rights of action he may have had. Subsequently the Board, in its letters of February 7, 1990, and September 23, 1991, offered to grant the worker the authority to maintain his action in his own name, provided that certain conditions were fulfilled. By signing the direction dated April 17, 1995, Mr. Buhagiar met the Board's requirements. Consequently, he is authorized to maintain the action in his own name. (c) Was Jantree a Schedule 1 employer at the time of Mr. Buhagiar s accident? Jantree was not registered with the Board as a Schedule 1 employer, which in and of itself, is not determinative. Mr. Snowden and Mr. Cheifetz both stated that Jantree operated a building that was rented as office space and for warehousing. In Mr. Snowden's submission, this was sufficient to bring it under the protection of the Act. Mr. Cheifetz argued that the fact that Jantree ordered the installation of a ladder demonstrated that it was actively involved in the operation of the building. Mr. Parker, on the other hand, submitted that Class 25 ought to be interpreted narrowly and the Panel ought to find that Jantree was simply a holding company. 11

13 The question that is before this Panel is whether Jantree was an employer in Schedule 1. We find that it was not. Having made that finding, we do not have to determine the nature of its business and/or the Class in Schedule 1 in which that business might belong. In his submissions of April 12, 1995, Mr. Cheifetz argued that someone was collecting the rent and keeping the necessary records. He did not indicate who that might be or the nature of the relationship between that person or persons and the company. He suggested that this person ought to be considered an employee even though he or she did not receive any remuneration. This Panel agrees with Decisions No. 909/89, 481/93, and 543/93, that an employer is not an employer unless it has at least one worker. We have not been presented with any evidence that Jantree had any workers. With respect to Mr. Cheifetz suggestion that there was a worker but no wages were paid, we are of the opinion that, while the payment of wages do not necessarily indicate an employer/employee relationship, they are an important indicia that such a relationship exists. Previous Tribunal decisions have held that the nature of the relationship must be examined to determine whether an employment relationship exists. Mr. Cheifetz did not provide the Panel with any information on which we could make a finding. The Panel rejects Mr. Cheifetz' argument that the lease between Jantree and Daemar could be interpreted as a contract by which Daemar was employed to perform certain tasks for Jantree with respect to the maintenance and care of the building. The lease was a contract for the rental of space. It stipulated the requirements of the lessor with respect to how the lessee was to care for the space. Nothing more. Mr. Snowden referred the Panel to Decision No. 965/87I, which he said was analogous to the case before us. In that decision, the defendant, Currie, owned a building that contained both commercial and residential space. One of his tenants in a nearby building, maintained and supervised both buildings in return for reduced rent. The parties agreed at the beginning of the hearing that this tenant was Currie's employee/worker. The Panel found that Currie's enterprise fell within Class 25 and despite his failure to report to the Board, he was a Schedule 1 employer. The situation in Decision No. 965/87I is clearly different from the case before this Panel in that Currie had an employee. Jantree did not. In their submissions, the parties' representatives referred to "Jantree, and Merklinger as an executive officer of Jantree". In this decision, the Panel has referred only to Jantree because no submissions have been made to the effect that there is any circumstance present in this case that requires the piercing of the corporate veil. (d) Were Daemar, IWD, and Ferracorp, Schedule 1 employers and entitled to the protection of the Act, at the time of Mr. Buhagiar s accident? The evidence before the Panel was that Daemar, IWD, and Ferracorp were registered with the Board as Schedule 1 employers at all material times. In the case of Ferracorp, the Panel has relied on Mr. Forsyth's sworn testimony. We have been provided with the Board firm numbers for Daemar and IWD, but not for Ferracorp. 12

14 No evidence was presented that would suggest to the Panel that the workers of these Schedule 1 employers were not in the course of their employment at the relevant times. (e) The actions of the members of the worker's family None of the parties' representatives made any submissions with respect to the rights of the worker's family members to carry on an action. The family members' action was commenced under the provisions of the Family Law Act. This action is not "for an injury for which benefits are payable under this Act" (s. 10(9)). Therefore, the action is not barred by section 10(9) of the Act. (f) The application of section 10(11) Having found that Buhagiar is barred from taking action against Daemar, IWD, and Ferracorp, but that he is not barred from taking action against Jantree, the Panel finds that section 10(11), which is set out in s. viii, above, applies to the awarding of damages, if any. Therefore, Jantree cannot be held liable for damages, contribution, or indemnity for the portion of loss or damage, if any, caused by the fault or negligence of Daemar, IWD, and Ferracorp. (g) Mr. Cheifetz' submission with respect to the Panel's lack of jurisdiction to determine the question of a contractual obligation to maintain adequate insurance, between Jantree and the third parties While this question is novel in the Tribunal's experience, there are general propositions that provide us with guidance. The Tribunal's approach whenever a novel issue is raised, is to ask whether it has the same factual basis as the worker's compensation claim, and whether it falls within the wording of section 10(9), i.e. is it an action "for an injury for which benefits are payable under this Act, where the worker's of both employers were in the course of their employment at the time of the happening of the accident." The action against the insurance companies was brought by Daemar. It does not fit within the criteria set out above. The Panel does not have jurisdiction to determine questions related to this contractual obligation between Jantree and the third parties. 13

15 THE DECISION The worker's right of action was subrogated to the Board through his deemed election as a result of receiving health care benefits following his accident of October 10, However, the Board has authorized him to pursue the action in his own name provided that its costs be reimbursed from any settlement or damages he may receive. The right of action of J. Buhagiar against Jantree No. 6 Inc., and P. Merklinger, is not taken away by section 10(9) of the Workers' Compensation Act. His right of action against Daemar, Ferracorp, and IWD is taken away. Pursuant to section 10(11) of the Act, Jantree cannot be held liable for damages, contribution, or indemnity for the portion of loss or damage, if any, caused by the fault or negligence of Daemar, IWD, and Ferracorp. The rights of action of C. Buhagiar, J. Buhagiar, and S. Buhagiar are not taken away by the Workers' Compensation Act. DATED: June 13, 1996 SIGNED: S.J. Sutherland, P.A. Barbeau, M. Cook 14