Legal Blog

Just Do it

No, this is not a commercial. It is a refrain that subcontractors often hear, though not necessarily in the context of safety. When a general’s representative directs a sub to do something that the sub feels is unsafe, but does it anyway, and a loss ensues, who is liable: the general who gave the order or the sub who carried it out? This question is answered in Jelco Construction Ltd. v. Vasco, a 2010 decision of the Ontario Court of Appeal.

Fire

The general was remediating failed outside walls on a 14-story apartment building while the tenants continued to reside there. To do so, the general cordoned 6 feet from the outside of each apartment with plywood walls. The general installed shelf angles on which to erect the new walls. The shelf angles had pre-drilled holes to attach to the bolts that were imbedded into the concrete. For whatever reason, the general realised, after installing the shelf angles at each floor, that each angle needed 3 more holes. The general hired a sub, an individual, for the grand sum of $25 per hour, to cut those holes using an acetylene torch.

The sub attended the site and immediately told the general’s super that it was too dangerous to cut the holes at the shelf angles as installed. He wanted the general to remove the shelf angles from each floor, bring them to the ground, and allow him to work on them in a safe environment. The super decided that this would be too much work. He directed the sub to do his work, on a floor-by-floor basis, but gave the sub a labourer to spot for sparks.

The sub did his work on the first 12 floors without incident. However, he brought to the super’s attention that tarpaper, which is exceedingly flammable, covered the walls on the 13^th floor. The super again refused to take down the shelf angles, but provided a 2^nd labourer to hold a piece of plywood at an angle to keep the sparks away from the tarpaper and attended himself on the 12^th floor to ensure that he could keep an eye out for sparks.

Wonder of wonders, the acetylene torch set off sparks, which settled on the tarpaper, and started a fire. The super, who had not brought with him any water, fire blankets, or fire extinguisher, tried to put out the fire with his hands. He did not succeed, but did manage to burn his hands.

Damages

The building was extensively damaged, but, we assume, there was sufficient insurance to cover the owner’s damages. There was insufficient or perhaps no insurance to cover additional damages that the general incurred. These damages included accounts receivable that the owner refused to pay the general – we assume that the owner was peeved with the general; labour expenses to clean up the fire damage; equipment rentals and losses; material and tool losses; and legal fees of $100,000 that the general incurred in dealing with the owner and the general’s own insurer.

The general sued the sub for its losses.

Volenti

That’s Latin. It’s unnecessary, but we thought we would impress you by using it.

There was little doubt that the sub was negligent. He had a duty to the general to perform his work safely and knew that the manner in which he was cutting the holes was unsafe.

The real issue was whether the general had voluntarily assumed the risk of injury. In olden times, say 40 years ago, the defence of volenti non fit injuria (more Latin) was an absolute defence (i.e. a person could not complain about a wrong to which the person had consented). Similarly, if the wronged person (the “victim”) was contributorily negligent, even a little bit, the victim had no claim against the negligent person committing the wrong.

We now have a concept of contributory negligence by which the victim’s damages are allocated between the wrongdoer and the victim. If the damages are, say, $100 and the victim is found to be 30% contributorily negligent, then the victim receives $70 of his damages.

The courts have also reduced the impact of the volenti defence. It is not enough just to know of the risk of injury, the victim must also agree, either expressly or by implication, to waive a claim for negligence. The test is whether the victim, knowing of a virtually certain risk of harm, bargained away his right to sue. If the victim did not, then the victim’s knowledge and conduct do not disentitle him to an award; rather, the damages are reduced, just as for contributory negligence, by the portion attributable to the victim for his actions that helped to bring about the loss.

Trial

To determine whether there was an agreement, the judge looked at the facts. When the super instructed the sub to continue cutting, the super had told the sub, “Don’t worry about it, if anything happens it will be my responsibility.”

The judge held that these words were insufficient to demonstrate that the super agreed to assume both the physical and the legal risk of loss. The words do not say for what the super was taking responsibility. Was he personally liable for property damages or for loss of life?  Was he suggesting that he had authority to commit the general to absolve the sub of legal liability? The words were not a clear and unambiguous absolution of the sub from negligence.

Further, the sub, in its own legal pleadings, alleged that the general had a “complete lack of appreciation for the risk that (its instructions) put the Defendant in.”  The judge noted that if the general had a complete lack of appreciation of the risk, it could hardly have bargained away its rights to sue for the sub’s negligent conduct.

The judge held that the sub knew, and the general ought to have known, of the risk. Accordingly, he apportioned responsibility 50-50. Since he assessed damages at $335,000, the sub was liable to pay $167,500.

The sub appealed.

Appeal

The Court of Appeal allowed the appeal in two ways. It reduced damages to $235,000. It held that the money the general paid for legal fees to fight its own insurer was too remote. The sub would not have been able to reasonably foresee this category of damages at the time of the incident.

Second, and more importantly, the court re-allocated the responsibility for the fire. Although both the general and the sub were negligent, the court said that the trial judge did not give enough weight to the power imbalance between general and sub in these circumstances. The super had pressured the sub to continue even though the sub knew he should not. Accordingly, the court allocated 25% of the responsibility to the sub and 75% to the general.

Consequently, the sub had to pay $58,750 to the general.

Insurance

We do not know whether the sub was insured or not. In the normal circumstances of an incorporated sub that is more than a one-man show, a sub would insure itself; however, in the case of an individual sub, perhaps not. If not, that would be a pity and an object lesson why third party liability insurance is a necessity.