DEFENDING OCCUPIERS LIABILITY CASES. By Shelley Johnson, Lloyd Burns LLP

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1 DEFENDING OCCUPIERS LIABILITY CASES By Shelley Johnson, Lloyd Burns LLP WHO IS AN OCCUPIER? The Occupiers Liability Act, R.S.O. 1990, c. O2 (hereinafter the Act) defines an occupier as: a) A person who is in physical possession of premises; or b) A person who has responsibility for and control over the conditions of premises or the activities there carried on, or control over persons allowed to enter the premises, despite the fact that there is more than one occupier of the same premises; This means that there can be more than one occupier of the same premises. Practically speaking, the most commonly encountered scenarios are cases where an owner retains an independent company to maintain its premises. Under the Act, both would be considered occupiers for liability purposes. OCCUPIERS DUTIES: Section 3 of the Act, sets out the duties of occupiers as follows: (1) An occupier of premises owes a duty to take such care as in all the circumstances of the case is reasonable to see that persons entering on the premises, and the property brought on the premises by those persons, are reasonably safe while on the premises. (2) The duty of care provided for in subsection (1) applies whether the danger is caused by the condition of the premises or by an activity carried on the premises.

2 This is an affirmative duty which requires occupiers to take reasonable care to protect persons on the premises from foreseeable harm. Essentially, the Act promotes and requires positive action on the part of occupiers to make their premises reasonably safe in the circumstances. However, it is important to remember that there is no automatic presumption of negligence simply because a person fell. The onus remains on the plaintiff to prove that the occupier was negligent, and that this negligence was the cause of the plaintiff s injuries. As J. MacDonald stated in Whitlow v Ontario Ltd. (c.o.b. Cross-Eyed Bear Tavern 1 ): A plaintiff must still be able to point to some act, or some failure to act, on the part of the occupier which caused the injury complained of, before liability can be established. This fundamental principal is sometimes overlooked by plaintiffs who presume that, when an accident occurs on an occupier s premises, there is a presumption of negligence against the occupier of the premises. The leading case with respect to the duty of the occupier remains the Supreme Court of Canada decision of Waldick v. Malcolm. 2 In reviewing section 3 of the Act, the Supreme Court stated:... All courts have agreed that the section imposes on occupiers an affirmative duty to make the premises reasonably safe for persons entering them by taking reasonable care to protect such persons from foreseeable harm. The section assimilates occupiers liability with the modern law of negligence. The duty is not absolute and occupiers are not insurers liable for any damages suffered by persons entering their premises. Their responsibility is only to take such care as in all the circumstances of the case is reasonable. The trier of fact in every case must determine what standard of care is reasonable and whether it has been met. Occupiers are also not liable in cases where the risk of injury is willingly assumed by persons entering the premises or to the extent that such persons are negligent. The occupier does not owe a duty to provide safety in all circumstances, but rather to make the premises reasonably safe; to use reasonable care to prevent injury or damage from danger that is 1 [1995] O.J. No. 77 (Gen. Div.) 2 (1989), 70 O.R. (2d) 717 (C.A.) at 723.

3 known or ought to be known. 3 The factors used in assessing reasonable care in the circumstances generally depend on the type of premises, the type of pedestrian traffic, the cost of care, and the knowledge of hazard. In Garofalo v. Canada Safeway Ltd., 4 the court noted: The positive or affirmative duty that is imposed upon the defendant does not extend to the removal of every possible danger. It does not require the defendant to maintain a constant surveillance or lookout for potential danger. The defendant meets its duty to take reasonable care if it takes measures that are reasonable in the circumstances. What is reasonable in the circumstances must be determined on a case by cases basis. A finding of liability on the part of the occupier may depend upon one or a number of relevant factors, including: 1. The inherent or unusual danger at the site; 2. The reasonable likelihood of a particular incident occurring; 3. The sufficiency of a program of care and maintenance utilized by the occupier; 4. The plaintiff s willingness to assume a foreseeable risk; 5. The nature and extent of any warning or waivers of liability on the part of the occupier; and 6. The sufficiency of the casual nexus between the accident and the breach alleged. It is generally accepted that a commercial occupier owes a higher standard of care than an occupier in a residential setting (i.e., a homeowner). In all cases, the duty of care owed by an occupier does not require the occupier to remove every possibility of danger the standard is one of reasonableness, not perfection! 3 Hagerman v. City of Niagara Falls (1980), 114 D.L.R. (3d) 184 (H.C.J.). 4 [1998] O.J. No. 302 (Gen. Div.) at 31.

4 The Act also provides a number of exceptions. Sub-section 4(1) of the Act provides, [t]he duty of care provided for in sub-section 3(1) does not apply in respect of risks willingly assumed by the person who enters on the premises, but in that case the occupier owes a duty to the person to not create a danger with the deliberate intent of doing harm or damage to the person or his or her property and to not act with reckless disregard of the presence of the person or his or her property. Lastly, most occupiers will argue contributory negligence on the part of the plaintiff. A person coming onto the premises is expected to be reasonably alert to any obvious dangers. Typically occupiers will allege that the plaintiff was contributorily negligent for: o failing to keep a proper look-out; o carrying parcels etc. which prevented him/her from being able to maintain a proper look-out or affected his/her balance; o failing to take reasonable care and precaution for his/her own safety; o proceeding too quickly without having regard to all of the circumstances; o having the last clear chance of avoiding the Incident and failing to take advantage of it; o wearing footwear, which he/she knew or ought to have known was of an unsafe design and inappropriate for use in the circumstances; o failing to wear his/her prescriptive eye wear, as needed, or alternatively, failing to obtain prescriptive eye wear, as needed;

5 o consuming alcohol and/or medication and/or was ill, which impaired or otherwise affected his/her ability to assess the circumstances in order to avoid the Incident; and o simply slipping and being the author of his/her own misfortune. Depending on the circumstances, the plaintiff can be found anywhere from 5% to 50% negligent for failing to keep a proper look-out etc. THE VALUE OF MAINTENANCE: In most cases, occupiers who successfully defend liability claims have systems of inspection and maintenance in place and records to prove that the systems were followed. For example in Gardiner v. Thunder Bay Regional Hospital 5 the court found the maintenance system to be reasonable and accordingly absolved the owner of liability. The Court made the following comments: On its face, I cannot find fault with the system that was put in place. Hiring a professional snow removal company to maintain a parking lot in winter in Northern Ontario is a responsible action. And this, coupled with a contract which allows a contractor, in the first instance, to determine without restriction when conditions require either snow removal or attending to slippery conditions with sand (salt and sand) is a very solid approach to safety. Furthermore, the Defendant s employees are required to inspect the lot daily, one looking to the parking areas, the other looking to the helipad which sits on one side of the parking lot. 5 [1999] O.J. No. 833 (Gen. Div)

6 However, not all maintenance systems are created equal, and the courts have also found many to be sub-standard for the circumstances. In Britt v. Zagjo Holdings Ltd. 6 a plaintiff slipped and fell on ice in a parking lot. The maintenance system involved the use of two independent contractors. The court found that the system was disorganized and lacked communication between the contractors. Furthermore, the owner was found liable for failing to ensure that the contractors had properly maintained the parking lot. The reality of living in Canada means that occupiers have to deal with the often unpredictable conditions of winter. Even the best occupiers cannot remove every speck of ice and snow from a parking lot and thankfully the Courts have not required them to do so. The key is to have a regular maintenance system in place, to inspect on a timely basis and to make sure that the system is being followed at all times. It is not enough to have an amazing maintenance system in place on paper one must also demonstrate that the system was being followed at the time of the loss. This is accomplished through record keeping. RECORDS, RECORDS, RECORDS: Although the Act doesn t require occupiers to keep records, from a practical standpoint, records are the best evidence an occupier can have to defend a claim. Typical logs kept by occupiers include sweep logs, daily inspection logs and call dispatch logs. The best log sheets set out the date, time and name of the person doing the sweeping and/or inspection. An itemized list of problems encountered during the inspection can also be used to 6 (1996) CarswellOnt 1186 (Gen. Div.)

7 demonstrate that the system was working at the time of the incident. Lastly, from a loss prevention standpoint, an inspection every hour to hour and a half has been held to be reasonable in most circumstances. Post-accident investigation can also be crucial to providing a good defence. A picture is worth a thousand words is especially true in occupiers litigation. Photographs of the premises at the time of the loss can be very helpful (or harmful!) in demonstrating reasonably safe conditions. Weather reports for the date in question are helpful in slip and fall cases involving outside parking lots/sidewalks. Similar to photographs, video surveillance tapes can also be very helpful (or harmful!) in properly defending a claim. Obviously, taped footage of the incident is the best evidence of what really occurred, however, it is often not available. Again, it must be stressed that the Act does not require the occupier to maintain a constant surveillance or lookout for potential danger. CONTACTING OUT OF LIABILITY: In many cases, owners will attempt to contact out of their liability by retaining independent contractors to conduct inspection and maintenance on their premises. Section 6(1) of the Act provides:

8 Where damage to any person or his or her property is caused by the negligence of an independent contractor employed by the occupier, the occupier is not on that account liable if in all the circumstances the occupier has acted reasonably in entrusting the work to the independent contractor, if the occupier has taken such steps, if any, as the occupier reasonably ought in order to be satisfied that the contractor was competent and that the work had been done properly done, and if it was reasonable that the work performed by the independent contractor should have been undertaken. Simply engaging the services of an independent contractor (e.g. snow removal company) is not enough to absolve the owner of liability. The owner must show that it acted reasonably in entrusting the work to the independent contractor (i.e. checked references, used the contractor in the past without incident etc.). The owner must also reasonably satisfy itself that the contractor was competent and that the work was properly done. In most cases the maintenance contract will be the primary source of the contractor s obligations. Failure to fulfill contractual obligations will give rise to exposure for liability for the independent contractor. Liability may also arise if the contractor voluntarily undertakes additional maintenance activities not covered by the contract. In those cases, the contractor has a duty to perform those additional duties effectively or they risk exposing themselves to liability. Many maintenance contracts require the contractor to plow after two inches of accumulation. Salting requirements run the gamut from when necessary to upon call. Some maintenance contracts call for regular and sometimes daily inspections by the independent contractor. Others specify that the independent contractor will only attend upon call by the owner. From a liability standpoint the owner should attempt to shift as much of the inspection and maintenance responsibilities to the independent contractor as possible in order to avoid liability.

9 Owners can also protect themselves from liability through the use of indemnity clauses and insurance clauses. Indemnity Clauses: Unfortunately, there is no standard indemnity clause and the wording of these provisions must be examined on a contract by contract basis. Most clauses do not cover the owner s independent negligence, although some attempt to. The Supreme Court of Canada in Fenn v. Peterborough (City) 7 held that: if one is to be protected against or indemnified for one s own negligence, there would have to be an indemnity clause spelling out this obligation on the other party in the clearest terms. In many cases, a poorly worded indemnity clause effectively means that the owner will remain in the litigation. Most independent contractors are unwilling to assume the defence of the owner when the Statement of Claim makes independent allegations of negligence against the Owner (i.e. failing to properly supervise the work of the contractor or having inherently dangerous premises). Generally speaking the Courts have interpreted indemnity clauses narrowly. For example in Potvin v. Canadian Museum of Nature 8 the Court commented as follows: Unless an agreement clearly expresses an intent to transfer all of the occupier s negligence liability to a renter, the indemnity will apply only to negligence with a causal connection to the renter s use and activity. Here, while the injury followed the entry and attendance of one of Royal s invited guests on the Museum s premises, that temporal connection alone is insufficient connection to say that it arises out of or in connection with entry onto and use of the Museum s facilities. 7 [1981] 2 S.C.R. 613 (S.C.C.) 8 (2003) CarswellOnt 1932 (S.C.J.)

10 Insurance Clauses: Most maintenance contracts also contain a requirement the contractor either take out a CGL policy with fixed policy limits and/or name the owner as an additional named insured. There have been a number of recent decisions in which owners have attempted to rely on insurance clauses to argue either: (1) the clause evidences an intention that the contractor assumed all risks relating to winter maintenance (including the owner s negligence); or (2) the owner s inclusion as an additional named insured includes coverage for claims relating to the owner s own negligence. These arguments have largely been unsuccessful. 9 When dealing with insurance clauses, it is important to obtain a copy of both the owner and the independent contractor s insurance policies. Do not simply rely on the Certificate of Insurance when trying to determine if coverage exists for the owner as an additional named insured. Unfortunately, there are no standard contracts and consequently disputes between owners and contractors must be assessed on a case by case basis. However, the following can assist in providing some guidance in determining apportionment of risk: o does the contract fully specify all of the responsibilities of the contractor or are they performing extra duties voluntarily? o Does the indemnity agreement expressly include the owner s own negligence? 9 See Tinkess v. N.M. Davis Corp. (2007) CarswellONt 1627 (S.C.J), Smith v. T. Eaton Co (1977), 92 D.L.R. (3d) 425 (S.C.C.) and D Cruz v. B.P. Landscaping Ltd. (2007) CarswellOnt 4385 (S.C.J.)

11 o Does the indemnity include the contractor s obligation to defend the owner? o What are the triggering criteria in the insurance policy for the owner to be an additional named insured? o Is there any ambiguity in the clauses which might be construed again the drafter of the contract (likely the owner)? CONCLUSION: When dealing with occupiers liability always remember that the standard is reasonableness, not perfection. From both a loss prevention and litigation standpoint, the best defence is often a good offence. Encourage your clients to develop timely inspection systems and record, record, record!

12 SHELLEY JOHNSON, LLOYD BURNS LLP Shelley Johnson obtained a Bachelor of Arts degree from Wilfrid Laurier University in 1995, where she concentrated her studies on history and political science. She then attended at the University of Western Ontario, from which she graduated with her Bachelor of Laws degree in Shelley practices civil litigation with an emphasis on personal injury defence work. She has also acted in the areas of occupiers liability, property damage, construction defect cases, subrogation, product liability, municipal liability, motor vehicle accidents and professional negligence including home inspectors, insurance brokers and mechanics. Shelley has both trial and appellate experience and has appeared before the Ontario Superior Court of Justice, Divisional Court and the Ontario Court of Appeal.

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