Vicarious liability of owners for the acts of independent construction contractors

The general rule is that owners are not vicariously liable for the torts of their independent contractors. But, there are a number of exceptions to this general rule and owners should be aware of these exceptions for three reasons: First, only if the owner understands the nature and extent of liability risk can it mitigate that risk through carefully drafted contract documents, or assign the risk to a third party insurer. Second, having an accurate understanding of the liability risks of the project will assist in assessing the feasibility of the project. Finally, being fully aware of the potential liability for the acts of independent contractors may inform the choice of contractor. The owner may decide to choose a more competent and reliable contractor, rather than the one with the lowest price.

 

This article outlines the areas of potential owner liability for the acts of independent contractors in British Columbia. 

 

“The general rule at common law is that a person who employs an independent contractor will not be liable for loss flowing from the contractor's negligence”: Lewis v. British Columbia, [1997] 3 S.C.R. 1145 at para. 49 (Lewis). The owner will be liable for loss flowing from negligence in hiring or supervising the contractor. But, in those instances the owner is not being held vicariously liable for the acts of the contractor, but is directly liable for his own negligence. This article deals with vicarious liability and direct liability for the owners personal negligence in hiring or supervising the contractor is not considered. 

 

It is important to clarify certain terms which will be used throughout this article. Strict liability is liability without fault. In strict liability the defendant need not have been negligent and will be liable for the loss flowing from his acts despite having taken reasonable care to prevent harm. Vicarious liability is “the imputed responsibility of one person for the acts of another”: John A. Yogis, Q.C., Canadian Law Dictionary, 5th ed., (New York: Barron’s, 2003). Vicarious liability is said to be an instance of strict liability because the person held liable was faultless. However vicarious liability is not pure strict liability because it requires there to have been negligence on the part of someone.

 

Employers are vicariously liable for harm flowing from the acts of their employees so long as there was a valid employment contract and the act which caused the harm was within the course of employment: 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983 (Sagaz). However an employer is generally not liable for the acts of an independent contractor (Sagaz) and this principle has been affirmed in the construction context: Balcovske v. Stanley Theatre Co. Ltd. (1934), 48 B.C.R. 433 (B.C.C.A.). Whether a worker is an employee or an independent contractor depends on the nature of the relationship, and not on what the parties label the relationship. There are a number of tests for classifying the relationship: Sagaz. In most instances building contractors will be independent contractors because the owner will not be closely supervising the contractor or controlling performance of the work. For the purposes of this article it is assumed that the construction contractor is an independent contractor rather than an employee, and so the owner is not automatically vicariously liable for the acts of the contractor.

 

An independent contractor may also be an agent for its employer. In Thiessen v. Mutual Life Assurance Co. of Canada (2001), 8 C.C.L.T. (3d) 134 (B.C.S.C.), varied (2002), 13 C.C.L.T. (3d) 30 (B.C.C.A.), a financial investment company was held liable for the fraud of a sales representative who was found to be an independent contractor. The sales representative was deemed to be an agent of the investment company, and vicarious liability was imposed on the basis of that agency relationship. That case confirms that vicarious liability for independent contractors who are also agents is broader than vicarious liability for non-agent independent contractors. Since construction contractors are seldom agents of the owner, this article assumes that the building contractor is a non-agent independent contractor. 

 

Although the general rule is that owners will not be vicariously liable for the acts of their independent contractors, there are a number of exceptions to that rule. First, liability may arise under the Occupiers Liability Act, R.S.B.C. 1996, c. 337 (OLA). Second, there are certain harms for which landowner liability is strict and for these harms the owner will be liable even if the wrongful act was performed by an independent contractor. Third, owners will also be liable for activities which attract non-delegable duties. Finally, there is a special liability on landowners for fires negligently started or allowed to escape their property. This article focuses on vicarious liability under these four exceptions to the general rule precluding owner liability for the acts of its contractors. 

 

In some cases the owner may be liable on multiple bases. Consider the case of a fire caused partly by the negligence of an independent contractor who was performing inherently dangerous, non-natural, work, and partly by the poor state of repair of the premises. In such a case the owner may be liable on all four separate grounds of occupiers’ liability, the tort of Rylands v. Fletcher, non-delegable duty and strict liability for negligently started fires. Because plaintiffs normally plead alternative grounds for liability many judgments discuss multiple grounds of liability. It is not always clear on which ground liability is imposed. However, in discussing the various actions this article attempts to focus on cases in which it was clear that liability was based on the ground of liability under discussion.

 

Section 3(1) of the OLA states that occupiers owe a duty to take reasonable care to see that people will be reasonably safe in using their premises:

 

3(1) An occupier of premises owes a duty to take that care that in all the circumstances of the case is reasonable to see that a person, and the person's property, on the premises, and property on the premises of a person, whether or not that person personally enters on the premises, will be reasonably safe in using the premises.

 

Section 1 of the OLA defines an occupier as a person who is in physical possession of, or who has responsibility and control over, the premises and the activities conducted thereon:

 

"occupier" means a person who

(a) is in physical possession of premises, or

(b) has responsibility for, and control over, the condition of premises, the activities conducted on those premises and the persons allowed to enter those premises,

and, for this Act, there may be more than one occupier of the same premises

 

It is settled law that all of the elements of s. 1 must be read conjunctively: Wiley v. Tymar Management Inc., [1995] 3 W.W.R. 684 at para. 19 (B.C.S.C). In other words a party will only be an occupier under the British Columbia statute if they have responsibility for and control over the condition of the premises, and control over the activities on the premises. However s. 1 explicitly states that there may be more than one occupier of the same premises. It is therefore clear that for the purposes of the OLA “control” and “responsibility” are not absolute concepts; more than one party can be in control and have responsibility.

 

In most construction contracts the owner will grant the contractor a revocable license to be on the site to complete the work. The contractor will seldom have exclusive possession of the site with an absolute right to control access. The owner generally retains the right to control access to his own property, and retains the right to stop the work and exclude the contractor from the site; although it may be in breach of contract for doing so. Therefore, even though the contractor will have control of the works, the owner may still be an occupier of the premises for the purposes of the OLA.

 

The duty imposed by the OLA is distinct from duty under negligence, but the standard of care under the OLA will be similar to that under negligence. Rendall v. Ewert, [1986] 6 W.W.R. 97 (B.C.C.A.) confirmed that liability under the OLA requires forseeability even though forseeability is not mentioned in the statute. Section 3(4) of the OLA indicates that there will be a higher duty of care on occupiers when imposed by other enactments or rules of law:

 

3(4) Nothing in this section relieves an occupier of premises of a duty to exercise, in a particular case, a higher standard of care which, in that case, is incumbent on the person because of an enactment or rule of law imposing special standards of care on particular classes of person.

 

In Leischner v. West Kootenay Power & Light Co. (1986), 24 D.L.R. (4th) 641 (B.C.C.A) (Leischner) section s. 3(4) was applied and a high standard of care was imposed on an electric utility company which ran power lines over a public park area: “West Kootenay Power & Light Co. owes a particularly high duty of care to see that in transmitting and distributing electricity members of the public are not injured by that activity”: Leischner at 660. Therefore an important effect of s. 3(4) for construction work is that it preserves the requirement for a higher standard of care when performing dangerous work.

 

Section 3(4) of the OLA applies to direct liability i.e. where harm occurs from a breach of a personal duty. However, where an independent contractor is performing the work, indirect owner liability may be excluded by s. 5 of the OLA. Section 5(1) states that an employer will not be liable for damage caused by the negligence of its independent contractor so long as the occupier exercised reasonable care in the selection and supervision of the independent contractor, and it was reasonable that the work be done:

 

5(1) Despite section 3 (1), if damage is caused by the negligence of an independent contractor engaged by the occupier, the occupier is not on that account liable under this Act if, in all the circumstances,

(a) the occupier exercised reasonable care in the selection and supervision of the independent contractor, and

(b) it was reasonable that the work that the independent contractor was engaged to do should have been undertaken.

(2) Subsection (1) must not be construed as restricting or excluding the liability, imposed by any other Act, of an occupier for the negligence of the occupier's independent contractor.

(3) If there is damage under the circumstances set out in subsection (1), and there is more than one occupier of the premises, each occupier is entitled to rely on subsection (1).

 

The duty of owners to supervise was considered in Carriere v. Schlachter (1999), [2000] 1 WWR 397 (Alta. Q.B.). In that case the owner was found liable for the harm suffered by an employee of its independent contractor. The occupier hired roofing contractors and one of the contractor’s employees was electrocuted by a nearby high voltage power line. The owner was aware of the especially dangerous power line and liability was imposed for failure to warn the contractors of the deceptively dangerous line which had the appearance of an ordinary power line. In jury trials the basis for liability is never entirely clear, but in reviewing the jury decision Bielby J. held that liability may reasonably have been based on the failure by the owner to supervise the contractors as required by the Alberta Occupiers Liability Act, R.S.A. 2000, c. O-4. The wording of the relevant sections of the Alberta Act is similar to that of the British Columbia Act.

 

The British Columbia case of Dixon v. Eldorado Development Corp., [2000] 1 W.W.R. 671 (B.C.S.C.) (Dixon) also considered the duties of owners to supervise. In that case the plaintiff’s arm was injured by a falling piece of plywood which was being hoisted up the side of an apartment building for a balcony repair. The court considered s. 5 of the OLA, held the workmen to be independent contractors, and said that the balcony repair was work which was reasonable to have been undertaken. The court also found that the employer had exercised reasonable care in selecting the independent contractors. Nevertheless, liability was imposed on the basis that the employer had failed to properly supervise the independent contractors: 

 

[If the employers had] made a modest inquiry into the procedure contemplated by [the independent contractors] to hoist the plywood sheets up the outside of the building, they would have recognized the risk to public safety associated with the method chosen…even a cursory glance at the method employed [to hoist the plywood] would have revealed the risk.

(Dixon at para. 49).

 

Accordingly, the employer was liable under s. 5(1) of the OLA. That application of s. 5(1) of the OLA led to a curious result because it required the employer to closely supervise the independent contractor. It seems anomalous to have a statutory exclusion of liability for the acts of independent contractors, but for it to require the owner to closely supervise elementary work methods such as hoisting plywood. Admittedly, s. 5(1) calls for “supervision” of the independent contractor (which may seem like a contradiction of terms), but the better view may be that s. 5(1) only requires global supervision as opposed to requiring the employer to micro manage the daily tasks of the contractor. Such global supervision may include approval of the overall method of construction and/or warning the contractor of lurking dangers such as the deceptively dangerous high voltage lines of which the owner had personal knowledge in Carriere v. Schlachter. The court in Dixon took the opposite view and required the employer to closely supervise the independent contractor.

 

Other cases have held that an occupier is not liable to employees of an independent contractor if the employee was injured as a result of an unsafe system of work adopted by the contractor: Ferguson v. Welsh, [1987] 3 All E.R. 777, Peri-Urban Areas Health Board v. Munarin, [1965] 3 S.A. 367, Witham v. Shire of Bright, [1959] V.R. 790.

 

In the British Columbia case of Milina v. Bartsch (1985), 49 B.C.L.R. (2d) 33 (B.C.S.C.) (Milina), McLachlin J. (as she then was) held that “[i]t is up to the independent contractor and the employees to take care for their own safety”: Milina at para. 53. In Milina the plaintiff was rendered quadriplegic when he landed badly on an inflatable landing mat after doing a double back-flip off an artificial ramp at an indoor ski show. The plaintiff brought an action against the show organizers for failing to ensure that the premises were reasonably safe for use. Referring to Hagerman v. Niagara Falls (1980), 29 O.R. (2d) 609 at 613, McLachlin J. held that:

 

The occupier does not owe a duty to provide safety in all circumstances, but rather a duty to use reasonable care to prevent injury or damage from danger which is known or which ought to be known.

 

In Milina the stuntmen were familiar with the equipment and fully aware of the risks associated with the activity. McLachlin J. held that the show organizers “could not reasonably be expected to analyze the various components of the equipment to ascertain whether or not they were safe”: Milina at para. 78. Therefore, the show organizers were entitled to rely on the defence of having hired a competent independent contractor.

 

The foregoing indicates that, depending on the circumstances, employers in their capacity as occupiers may be liable for the harm caused by their independent contractors regardless of whether the harm is suffered by third parties or by the independent contractor’s employees. Technically, owner liability under s. 3 the OLA is not vicarious because it is imposed for a breach of the owner’s personal duty as an occupier to ensure that the premises are safe for use. Owner liability under s. 5 of the OLA is not vicarious either because it is imposed for breach of the owner’s personal duty to carefully select and supervise the independent contractor. However, in cases such as Dixon the liability seems vicarious because it was the contractor who carelessly hoisted the plywood after being employed to perform the contract in a workmanlike manner.

 

The terms of the contract will not affect owner liability to third parties because those third parties will not be privy to the construction contract. However, the owner may arrange for contractual indemnity from the independent contractor for harm caused by the contractor.

 

Where a landowner causes direct damage to his neighbour’s land or interferes with the reasonable enjoyment of neighbouring land he may be liable under the torts of Rylands v. Fletcher, nuisance, or trespass. Liability for these torts is strict and the plaintiff will not need to prove negligence. These causes of action are well established and, apart from Rylands v. Fletcher, they have undergone little change in recent years.

 

The tort of Rylands v. Fletcher originates from the case of Rylands v. Fletcher (1868), LR 3 HL 330, aff’g (sub nom. Fletcher v, Rylands) (1866), L.R. 1 Ex. 265 (Ex. Ch.) (Rylands v. Fletcher). Rylands v. Fletcher is a sui generis tort, but is similar to nuisance. Liability under Rylands v. Fletcher arises when a landowner, or his servant, brings onto the land for non-natural purposes something which is then allowed to escape and does harm to adjoining property or nearby persons. 

 

In Rylands v. Fletcher an owner employed an independent contractor to construct a reservoir. The water from the reservoir escaped down a hole under the reservoir and flooded an underground mine on the neighbouring property. The contractor was round to be negligent. The owner was also liable (vicariously) for the harm despite that it had not been negligent in hiring or supervising the independent contractor. Liability under the tort of Rylands v. Fletcher is strict, but there are defences: Consent (e.g. domestic water tanks used on successive floors of an apartment building), contributory negligence of the plaintiff (this is a palliatory defence because it only reduces damages), acts of a stranger (in Richards v. Lothian, [1913] A.C. 263 (P.C.) the defendant land owner was not liable when a stranger maliciously left taps running and flooded the neighbour’s premises), act of God, and statutory immunity (e.g. Local Government Act, R.S.B.C. 1996, c. 323, s. 288 and Hydro & Power Authority Act, R.S.B.C. 1996, c. 212, s. 31). 

 

In Cambridge Water Co. v. Eastern Counties Leather PLC, [1994] 2 W.L.R. 53 (H.L.) foreseeability was added as a requirement for Rylands v. Fletcher liability in the U.K. In that case drops of solvent used in a leather factory operation were allowed to drip onto the concrete floor. The solvent permeated through the concrete and got into the ground water supply and contaminated a well 1.3 miles away. The court held that the harm was not foreseeable, and refused to apply Rylands v. Fletcher. The requirement for forseeability has not been adopted in Canada.

 

There are 4 elements to Rylands v. Fletcher:

1.         accumulation of something on the land;

2.         non-natural use of the land;

3.         escape from the land; and

4.         harm.

 

Escape is seldom a critical element because damage would not have occurred if nothing had escaped. Water, vibrations, electricity, gas, poison and fire are harmful elements which may escape. Liability for escaping vibrations is important for projects involving pile driving: In Hoare v. McAlpine, [1923] Ch. 167, the owner was liable for damage to an ancient hotel caused by pile driving.

 

The requirement for the use of the land to be non-natural is the most contentious element and has been inconsistently and unpredictably applied by the courts. High voltage electricity has been held to be non-natural, but domestic wiring natural: Hudson’s Building and Engineering Contracts (London: Sweet & Maxwell, 1995) at 1.338 (Hudson’s). Industrial water under pressure was held to be non-natural, but domestic water supply natural: Hudson’s at 1.338.

 

Since the case of Burnie Port Authority v. General Jones Pty. Ltd., [1994] 120 A.L.R. 42 (H.C.A.), Rylands v. Fletcher no longer applies in Australia. In Burnie an independent construction contractor negligently set fire to some flammable insulation material while welding. The fire spread next door and destroyed the plaintiff’s property. Finding liability on other grounds the Australian High Court disposed of Rylands v. Fletcher because of the difficulties associated with determining the non-natural element. The High Court said that the standard of non-natural use is highly subjective and unfair because it has no standardized or objective test. Accordingly the tort of Rylands v. Fletcher was subsumed into negligence and no longer applies in Australia.

 

The British Columbia case of John Campbell Law Corp. v. Strata Plan 1350, [2001] B.C.J. No. 2037 (QL) confirmed that Rylands v. Fletcher is still good law in Canada. Aldridge and O'Brien v. Van Patter, Martin and Western Fair Association, [1952] O.R. 595 indicates that one can recover for personal injury in Canada under Rylands v. Fletcher.

 

Since liability under Rylands v. Fletcher is strict, the owner will be liable even if the escape is caused by an independent contractor. If Rylands v. Fletcher is accepted as good law, then this imposition of vicarious liability is rational because if an owner has a strict responsibility to prevent escape it would be inconsistent to allow him to evade such responsibility by simple delegation to an independent contractor.

 

Nuisance describes a type of harm that is suffered, rather than a kind of conduct that is forbidden.

 

There are two types of nuisance: private and public. Private nuisance arises when acts of a defendant, or other persons on the defendant’s land, impair the use and enjoyment of neighbouring land. Private nuisance is any unreasonable interference with the use and enjoyment of land by its occupier. Public nuisance is interference with a public right to use and enjoy public land or rights of way.

 

An interference with the use and enjoyment of land may be a nuisance even if it is not intentional or negligent. Unlike negligence, were the harm must flow from a lack of care by the defendant, an action in nuisance may lie even if the defendant is using state of the art technology and taking reasonable care in performing the work. Liability in nuisance is strict; the mere fact that the plaintiff’s use and enjoyment of land has been impaired gives rise to the action. However, unlike with trespass, nuisance is not actionable without proof of damage.

 

In the construction context nuisance may arise from noise, dust, smoke, water pollution, vibrations or other by-products of construction disturbing neighbours. Provincial statutes and city bylaws may regulate permitted work hours and noise levels, but plaintiffs can also rely on the common law to protect their enjoyment of land. Remedy for nuisance will typically be provided by injunction to prevent future harm, and damages to compensate for past infringement of the plaintiff’s property rights. The tolerance for interference before an action in nuisance will lie depends on the nature of the plaintiff’s property. A community standards test is applied and what is a reasonable amount of disturbance for an industrial area may not be acceptable in a quiet residential area.

 

Since liability in nuisance is strict, owners will not escape liability by having an independent contractor perform the offensive acts. Owners will be liable for nuisance caused by their contractors, although forseeability is required: “ignorance of the facts constituting the nuisance is an excuse unless he ought to have discovered the facts by use of reasonable care”: Wayen Diners Ltd. v. Hong Yick Tong Ltd. (1987), 11 B.C.L.R. (2d) 252 at 256 ( B.C S.C.). Furthermore, “a nuisance, whether public or private, must have some element of continuity”: Hutson v. United Motor Service, [1936] 2 D.L.R. 390 at 391 (Ont. C.A.).

 

Owners are also liable for public nuisance caused by their independent contractors. While private nuisance interferes with the use and enjoyment of private land, public nuisance affects the welfare of the community and interferes with public land. In Schoeni v. King, [1944] 1 D.L.R. 326 (Ont. C.A.) the employer of an independent contractor working on alongside a roadway was held liable for public nuisance when a child was injured. The contractor had placed lime and water in a large mixing tray for the purposes of making mortar. When lime reacts with water the mixture gets very hot. The tray was positioned such that it was mostly on the employer’s property, but part of it extended onto the public roadway land. The contractor had placed a pile of sand alongside the mixing tray and the sand was also on public land. A young child who was playing on the pile of sand fell into the hot lime and was badly burned. The mixing tray was held to be a public nuisance and the owner was held liable because he had, for an ongoing period, allowed the contractor to mix the mortar partly on the roadside next to the pile of sand. Having allowed the public nuisance to continue the employer was vicariously liable. 

 

Public nuisance that endangers or injures anyone may also constitute a crime under the Criminal Code, R.S.C. 1985, c. C-46, s. 180.

 

In some cases liability in nuisance and trespass may overlap. For example, in Achdus Free Loan Society v. Shatsky, [1955] 3 D.L.R. 249 (Man. Q.B.) an independent contractor dumped earth on the plaintiff’s land during the course of excavating a cellar. The employer was liable for nuisance for the acts of the independent contractor and an action in trespass may also have been made out.

 

Withdrawal of support is a sub-category of nuisance and makes the owner strictly liable for loss of support to his neighbour’s land. The right to support is a property right:

 

The right of the owner of land is…to have that land left in its natural light and condition without interference by the direct or indirect action of nature facilitated by the direct action of the owner of the adjoining land.

(Cleland v. Berbarick (1915), 25 D.L.R. 583, aff’d (1916), 36 O.L.R. 357 (Ont. C.A.))

 

But, the duty to maintain support is only a duty to not do positive acts which remove support. The owner will not liable for acts of god such as naturally occurring landslides or wind or water erosion which result in a loss of support to neighbouring land. 

 

Although owners are under a strict duty to maintain lateral support to their neighbour’s land, the case of Lee v. Shalom Branch # 178 Building Society, [2001] B.C.J. No. 2671 at para. 12 (B.C.S.C.) (QL) confirmed that “the right to support does not extend to support of a building or anything "artificially imposed upon the land”. Furthermore, since s. 24 of the Land Title Act, R.S.B.C. 1996, c. 250 denies accrual of property rights by prescription, the right to the additional support required for the buildings cannot be acquired by prescription. Therefore, owners must maintain sufficient lateral support to maintain the neighbouring land, but not the buildings on top of that land. However, if lateral support is removed and the land would have subsided even if it had not been supporting a building then the damage to the building is also recoverable: Hudson’s Building and Engineering Contracts (London: Sweet & Maxwell, 1995) at 1.343.

 

Capilano Bungalow Court Ltd. v. Kitson (1961), 29 D.L.R. (2d) 625 (B.C.S.C) confirmed that owners are strictly liable for all harm caused by removal of vertical support to buildings. In many cases loss of vertical support will have been caused by excavation tools or machinery intruding onto the plaintiff’s land, and in these cases an action in trespass will also lie.

 

There is one exception to the strict obligation to maintain vertical support: if loss of vertical support is caused by pumping of ground water not flowing in a defined channel (river, stream etc.) then the party pumping the water will not be liable for the resulting damage. Removal of ground water causes settlement in porous soils because when the water molecules between the soil particles are removed the soil particles pack closer together. The cumulative effect of this closer packing causes settlement of the soil surface. When the settlement is uneven, parts of the building will subside and damage will result.

 

This exception to strict liability for loss of vertical support is important for construction which involves dewatering of excavations. The exception flows from the right to extract unlimited amounts of percolating water from one’s property. However a limitation to this exception was made in Canada (National Capital Commission) v. Pugliese, [1979] 2 S.C.R. 104. In that case the defendant was dewatering porous soil during the installation of a sewer and caused settlement damage to surrounding houses. The Supreme Court of Canada said that because the defendant was pumping more than the daily amount of water permitted by the Ontario Water Resources Act, R.S.O. 1990, c. O40 it was liable to the plaintiff.

 

Because liability for loss of support is strict, employers are liable even if it was their independent contractor that caused the loss of support: Rytter v. Schmitz, [1974] B.C.J. No. 620 (B.C.S.C.) (QL), Achdus Free Loan Society v. Shatsky and Gas Arnaud Ltd. and Arnaud, [1955] 3 D.L.R. 249 (Man. Q.B.). This imposition of vicarious liability is rational because if an owner has a strict responsibility to maintain support to his neighbour’s land it would be inconsistent to allow him to escape such responsibility by simply delegating the excavation work to an independent contractor.

 

At common law, every unauthorized entry upon land in the occupation or possession of another, however minute, is a trespass…[the defendant] is liable though the damage be nothing.

(Sorlie v. McKee, [1927] 1 D.L.R. 249 at 250 (Sask. C.A.).

 

Unlike for nuisance, liability in trespass will lie without proof of harm. However, trespass requires a positive act of interference or entry; it must be a deliberate act. Even the slightest violation of the neighbour’s boundary will be a trespass: “placing objects on the plaintiff’s land, driving nails into his wall, using it to support scaffolding, or leaving a ladder, planks, or a shed or piling rubbish against it”: Hudson’s Building and Engineering Contracts (London: Sweet & Maxwell, 1995) at 1.340.

 

An action in trespass will also lie for encroaching on neighbouring airspace. In Lewvest Ltd. v. Scotia Towers Ltd. (1981), 126 D.L.R. (3d) 239 (Nfld. S.C.) (Lewvest) the arm of a construction crane swung over the plaintiff’s property. There were a number of possible positions in which the crane could have been situated, but the defendant intentionally positioned the crane such that its arm would swing over the plaintiff’s property in order to save $500,000 of construction cost. An injunction was awarded with immediate effect and the contractor had to buy the right to use the plaintiff’s airspace for the remainder of the construction period. 

 

Since trespass is a positive wrongful act, the employer will only be liable for trespasses committed by an independent contactor in limited situations. For example, the employer will be liable if he directed the wrongful act. The employer will also be liable if he had control over the contractor, knew he was going to commit the trespass, and failed to prevent the contractor from doing so: York v. Ferguson, [1991] B.C.J. No. 3742 (QL), although in that case the defendant was not liable for the trespass committed by his independent contractor because it was held that he did not have control over him. 

 

The doctrine of non-delegable duty originates from the case of Pickard v. Smith (1861), 10 C.B. (N.S.) 470, 142 E.R. 535 (Pickard). In Pickard the defendant railway station hired a merchant to deliver coal. The court held the station owner liable when the merchant negligently left the coal loading hatch open and unguarded and the plaintiff fell in and injured himself:

 

The act of opening [the hatch] was the act of the employer, through done through the agency of the coal merchant; and the defendant, having thereby caused danger, was bound to take reasonable means to prevent the mischief.

(Pickard at 480).

 

From the above quote it is apparent that the original non-delegable duty case was decided on the basis of an agency relationship. As explained above, vicarious liability is different for agent and non-agent independent contractors. However, the subsequent case of Bower v. Peate, [1874-80] All E.R. Rep. 905 (H.L.) (Bower) involved a non-agent independent contractor and has been the foundation on which vicarious liability for the acts of non-agent independent contractors has been built.

 

In Bower the plaintiff and the defendant were neighbours. The plaintiff’s house suffered damage when its foundations were undermined by the defendant’s excavation contractor. It is clear from the judgment that the action against the defendant owner was not brought in negligence. Liability could have been imposed in this loss of lateral support case on the basis of nuisance (as discussed above) or interference with an easement: Atiyah, Vicarious Liability in the Law of Torts (1967) at 331 - at this time easements could arise by prescription in England. In other words liability could have been imposed in Bower on other grounds and it was not necessary to contribute to the developing doctrine of non-delegable duty. Nevertheless, the court laid the foundation for non-delegable duty:

 

[A defendant will be liable] for injury caused by an act certain to be attended with injurious consequences, if such consequences are not in fact prevented, no matter through whose default the omission to take the necessary measures for such prevention may arise.

(Bower at 909).

 

In Dalton v. Angus (1881), 6 App. Cas. 740 (H.L.), which had facts identical to those in Bower, Lord Blackburn confirmed the doctrine of non-delegable duty:

 

Ever since Quarman v. Burnett (1840), 9 LJ Ex 308, 151 E.R. 509 it has been considered settled law that one employing another is not liable for his collateral negligence unless the relation of master and servant existed between them. So that a person employing a contractor to do work is not liable for the negligence of that contractor or his servants. On the other hand, a person causing something to be done, the doing of which casts on him a duty, cannot escape from the responsibility attaching on him of seeing that duty performed by delegating it to a contractor. He may bargain with the contractor that he shall perform the duty and stipulate for an indemnity from him if it is not performed, but he cannot thereby relieve himself from liability to those injured by the failure to perform it.

(Dalton at 829).

 

The doctrine of non-delegable duty does not require owners to perform the work themselves; the performance of the task can be entrusted to a competent contractor, although the duty to ensure that care is taken cannot be delegated: 

 

To call a duty non-delegable does not mean that the duty cannot be delegated, but, rather, that ultimate responsibility for the performance of the duty cannot be delegated. Responsibility for the performance of the duty remains with the delegator who will be held liable in the event that the duty is not performed, or if it is performed negligently or tortiously (B. (M.) v. British Columbia, [2001] 5 W.W.R. 6 at 29 (B.C.C.A.)).

 

In Lewis (Gaurdian ad litem of) v. British Columbia, [1997] 3 S.C.R. 1145 (Lewis) McLachlin J. (later Chief Justice) defined non-delegable duty as:

 

[A] duty not only to take care, but to ensure that care is taken. It is not strict liability, since it requires someone (the independent contractor) to have been negligent.

(Lewis at para 50).

 

Liability under the doctrine of non-delegable duty is neither strict nor vicarious liability because liability is not imposed on the basis that the contractor was negligent, but on the basis that the owner failed to fulfil its duty to ensure that care was taken. Accordingly, in Scarmer Construction Ltd. v. Geddes Construction Ltd. (1989), 61 D.L.R. (4th) 328 at 335 (B.C.C.A.) (Scarmer) the independent contractor and the employer were described as “several concurrent tortfeasors”.

 

Various categories of non-delegable duty have been developed and these are discussed below.

 

Owner liability for the acts of independent contractors under the torts of Rylands v. Fletcher, nuisance, and trespass was discussed above. Such owner liability is sometimes described in terms of non-delegable duty because the owner cannot discharge liability for these harms by delegating performance of the work to a competent independent contractor.

 

Certain statutes such as the Ministry of Transportation and Highways Act, R.S.B.C. 1979, c. 280 give government the authority to perform public works. Although the Crown Proceeding Act, R.S.B.C. 1979, c. 86 states that the government will be liable for negligence committed in the course of constructing and maintaining public works, the government may be exempt from liability on the basis of a policy decision to not perform certain work: Just v. British Columbia, [1989] 2 S.C.R. 1228, Brown v. British Columbia (Minister of Transportation and Highways), [1994] 1 S.C.R. 420, Swinamer v. Nova Scotia (Attorney General), [1994] 1 S.C.R. 445. Alternatively, explicit statutory exemption may absolve the government from liability. However, when the government makes a policy decision to perform certain work a private law duty imposed by the Anns test (from Anns v. Merton London Borough Council, [1978] A.C. 728 at 751 - 752 (H.L.)) will be applicable and the government will be required to exercise reasonable care to ensure the safety of those using public works.

 

Once it is established that the government owes a duty of care, one must consider whether or not that duty can be delegated to a reasonably chosen independent contractor. The case of Lewis considered whether the British Columbia Government could delegate responsibility to ensure the rocky slopes above Highway 99 were properly cleared of loose rocks. A man was killed when a rock landed on his car after the independent contractor hired to brush the slopes above the highway negligently failed to remove all of the loose rocks. Cory J. explained that whether or not the duty to take care can be delegated will depend on the nature and the extent of the duty owed. If the government is under a strict statutory duty to do positive acts then it will not be able to escape liability by delegating the work to an independent contractor. Each case will depend on the specific statutory provisions. In Lewis s. 48 of the Ministry of Transportation and Highways Act, R.S.B.C. 1979, c. 280 said that the Minister “shall direct the construction, maintenance and repair” of all highways. This provision, and the word “shall” in particular, imposed a strict personal duty which could not be delegated. Accordingly, the Crown was liable for the negligence of its independent contractor.

 

Apart from the statutorily created personal duty, Cory J. held that there were a number of policy reasons supporting the imposition of a non-delegable duty in that case. First, it was reasonable for highway users to expect and rely on the Crown to safely maintain the highways. Second, highway users are in a vulnerable position of not being able to assess whether the work has been done negligently or whether the contractors entrusted with the work were competent. The ministry on the other hand is in complete control of the repair and maintenance of the highways. Third, the practical difficulties for a plaintiff in determining exactly which of the many subcontractors working on the highways was responsible for its injury suggests that the Crown should be accountable. Finally the Crown could arrange for contractual insurance or indemnity from its independent contractors. The court rejected the suggestion that the Crown would become the insurer of works done by its contractors, saying that liability would only exist where negligence by an independent contractor had been established and that the Crown could arrange indemnification.  

 

In St. John (City) v. Donald, [1926] S.C.R. 371 (St. John) the city employed a contractor to deepen a stream. Dynamite to be used for excavation was stored in a shed near the stream. The negligently stored dynamite exploded and caused damage to the plaintiff’s house. The city was held liable for the harm, partly on the basis that the work was being executed under statutory authority:

 

[The contractor’s negligence was a] breach of duty resting upon the municipality, which, in the exercise of its statutory powers, was causing the work to be done: a duty which it could not discharge by delegating it to the contractor.

(St. Johnat 388).

 

In Vancouver Power Co. v. Hounsome (1914), 49 S.C.R. 430, another dynamite case, a private company was statutorily given permission to construct a railway. The work included the use of explosives for excavation and the blasting was done in a way which caused a large amount of rock to be projected onto the plaintiff’s property. The court held that since the private company was constructing the railway under statutory authority it had a non-delegable duty to ensure that care was taken in performing the work. This personal duty could not be delegated to independent contractors and therefore the private company was held liable.

 

The foregoing indicates that where work is being performed under statutory authority it is likely that there will be a non-delegable duty on the person statutorily entrusted to perform the work. However, as explained in Lewis, the statutory provisions in each case will affect the nature of the owner’s responsibility.

 

Civil Liability Review Consultation Article, April 2002, #AG02079, Attorney General of British Columbia, released by the Attorney General of British Columbia in 2002, said that “[i]n recent years there has been [an] … expansion of transferred liability in the form of the non-delegable duty doctrine”. The article called for feedback from the legal community regarding the suggestion that legislative reform is needed to curb increasing civil liability. The consultation article itself was not clear what the scope of the legislation might be, but it would likely only affect government liability under statutorily imposed non-delegable duties. However, if government liability is reduced, plaintiffs will look to the private sector for recovery and owners and construction professionals will be a target when negligent contractors are insolvent or unavailable. Such changes to the law will be hard on construction professionals given the increasing difficulty of obtaining professional liability insurance. 

 

Where the work performed by a contractor is inherently dangerous the owner will be under a non-delegable duty to ensure that care is taken. Although this sounds like a reasonable rule, the difficulties involved with determining whether an activity is inherently dangerous, or only becomes dangerous when negligently performed, make this a difficult area of law. Inherently dangerous work is sometimes described as work which requires “special precautions” to ensure that harm does not occur. But, this definition is not particularly helpful because the distinction between special precautions and regular precautions is just as uncertain as the distinction between dangerous and non-dangerous work.

 

Collateral negligence is a term sometimes used to distinguish independent contractor negligence for which the owner is liable, from independent contractor negligence for which the owner is not liable. If the work could have been completed without harm, but the negligence of the contractor made the work dangerous and led to the harm, then the negligence is said to be “collateral”. Collateral acts are those not specifically authorised by the employer. Naming the negligence collateral or otherwise does not assist in determining whether or not the work was inherently dangerous or whether special precautions were necessary. Collateral negligence simply seems to be a label given to independent contractor negligence which a court has decided the owner is not liable for.

 

Bower, discussed above, was a foundational case for the dangerous work category of non-delegable duty: 

 

A man who orders a work to be executed from which in the natural course of things injurious consequences to his neighbour must be expected to arise, unless means are adopted by which such consequences may be prevented, is bound to see to the doing of that which is necessary to prevent the mischief, and cannot relieve himself of his responsibility by employing some one else.

(Bower at 908).

 

In Bower, Cockburn C.J. said:

 

There is an obvious difference between committing work to a contractor to be executed, from which if properly done no injurious consequences can arise, and handing over to him work to be done from which mischievous consequences will arise unless preventive measures are adopted.

(Bower at 908).

 

A review of the case law indicates that the distinction between dangerous and non-dangerous work is by no means obvious as Cockburn J. suggested. The difficulty with the dangerous work category of non-delegable duty is apparent when comparing the explosion cases of St. John (City) v. Donald, supra, and Vancouver Power Co. v. Hounsome, supra.

 

In St. John, negligently stored dynamite exploded and caused damage to the plaintiff’s house. Anglin C.J.C held that this work was inherently dangerous:

 

Storing the dynamite was an integral part of the work contracted for which was necessarily attended with danger, unless the precaution of providing a suitable place to keep it in was observed. 

 

It was held that “improper storage was not such an act of negligence as could not have been anticipated and guarded against”: St. John at 387. Accordingly the city was found liable partly on the basis of having employed a contractor to perform inherently dangerous work.

 

In Vancouver Power Co. v. Hounsome (1914), 49 S.C.R. 430 (Hounsome) the employer was also held liable when its independent contractor negligently performed blasting work. Thus, the result in Hounsome was the same as in St. John: the owner was liable. But, the result in Hounsome was affected by the statutory duty on the defendant to construct the railway carefully and Fitzpatrick C.J.C. made a strong statement indicating that the defence of collateral negligence is applicable in Canada and suggested that blasting work may not necessarily be dangerous work imposing a non-delegable duty on the employer to ensure that care is taken:

 

[T]his is a case of collateral negligence by a contractor and that, if the work of blasting had been carefully proceeded with, no injurious consequences would have resulted to the adjoining proprietor. It is common knowledge that, in this country, railways and other large undertakings are built by contractors, and that the work of excavation and blasting in connection therewith is carried on over large areas and in thickly populated centers with little inconvenience; such work cannot now be considered per se dangerous or of such a character that injury to the property of adjoining owners must be expected to arise in the natural course of its execution. I cannot find in the special circumstances of this case anything to justify the conclusion that the work was one from which mischievous consequences must arise unless preventive measures were adopted, and there was, therefore, no duty on the company to take special precautions. If, as is practically admitted here, there were two ways of carrying on this piece of work, one perfectly safe and the other dangerous, and, if the contractor chose to adopt the latter, the company is not responsible for the consequences.

(Hounsome at 431-432).

 

Although it mentioned the Hounsome case in other parts of its judgment, the court in St. John found the storage of dynamite to be dangerous work without discussing these comments from Hounsome.

 

The difficulty with classification of work as inherently dangerous or otherwise is also clear from a comparison of the cases in Tables 1 and 2 below. Table 1 lists cases (arranged in date order) in which non-delegable duties were imposed on the basis that the work was inherently dangerous. Although some of the cases involve municipalities and statutorily imposed non-delegable duties affect the results, in each case liability was at least partly based on the fact that the work was dangerous. Table 2 lists cases (arranged in date order) in which the dangerous work category of non-delegable duty was considered and rejected as a basis for employer liability.

 

A comparison of Tables 1 and 2 indicates that the distinction between inherently dangerous work and other work is very unclear. A two foot deep excavation may be dangerous (A.G. Can. v. Biggar (1981), 10 Sask. R. 401 (Sask. Dist. Ct.)), but a precipitous gravel wall may not (Eisert v. Martin (Rural Municipality No. 122) (1955), 1 D.L.R. (2d) 479 (Sask. C.A.)). Operating trains is not inherently dangerous (C.N.R. Co v. di Domenicantonie (1988), 49 D.L.R. (4th) 342 (N.B.C.A.)), but removing telephone cables is (Ostapowich v. Benoit (1982), 14 Sask. R. 233 (Q.B.)). Installing a gas furnace is not dangerous (Aiello v. Centra Gas Ontario Inc. (1999), 47 C.C.L.T. (2d) 39 (Ont. S.C.)), but installing a domestic oil burner is (McEown v. Roy-L Canadian Fuels Ltd., [1949] 2 D.L.R. 773 (Ont. H.C.)). In Myles v. Walker, [1994] N.B.J. No. 539 (QL) roof repair was not dangerous, but in Gay Nineties Icecream Co. Ltd. v. Geo. H. Hamilton & Sons Ltd. and Oromocto Development Corp., [1973] N.B.J. No. 165 (QL) it was. Depending on the qualification of the contractor, even a double back flip off an artificial indoor ramp onto an inflatable mat is not inherently dangerous: Milina v. Bartsch (1985), 49 B.C.L.R. (2d) 33 (B.C.S.C.) (Malina).

 

As mentioned above, many of the cases which conclude that the work was not inherently dangerous explain that it was the collateral negligence of the contractor that made the work dangerous. Atiyah points out that the defence of collateral negligence “has hardly ever been successful in England”: Atiyah, Vicarious Liability in the Law of Torts (London: Butterworth, 1967) at 374 (Atiyah). Atiyah suggests that misused term of collateral negligence be simply defined as “negligence outside the course of the employment of the contractor”: Atiyah at 378. This is the definition given to the term in the United States: Atiyah at 377. Used in this sense the term describes negligence unrelated to the task delegated as opposed to negligence which arises from the risk the employer created by engaging the contractor to perform the work. This definition for collateral negligence adds little to the analysis: employers are not liable for negligent acts of their employees if the acts were not in the course of employment: 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983, London Drugs v. Kuehne and Nagle International (1992), 97 D.L.R. (4th) 261 (S.C.C.).

 

Therefore, clearly employers will not be liable for the acts of independent contractors not acting in the course of employment. In other words this definition of collateral negligence simply states the obvious. However, defining it in that way was Atiyah’s intention because he considers collateral negligence to be a misunderstood term which confuses the law and seldom provides employers with a defence. But, Atiyah was writing in England in 1967 and the term is still used in Canada to describe negligence which causes safe work to become dangerous: Myles v. Walker, [1994] N.B.J. No. 539 (QL) (N.B.Q.B.). 

 

Liability under the dangerous work category of non-delegable duty does require forseeability of harm. As noted by the Supreme Court of Canada in St. John:

 

The employer is never responsible for what is termed casual or collateral negligence of such a contractor or his workmen in the carrying out of the contract; …he is not so where the work is not intrinsically dangerous… His vicarious responsibility arises, however, where the danger of injurious consequences to others from the work ordered to be done is so inherent in it that to any reasonably well-informed person who reflects upon its nature the likelihood of such consequences ensuing, unless precautions are taken to avoid them, should be obvious.

(St. John at 383).

 

In Aiello v. Centra Gas Ontario Inc. (1999), 47 C.C.L.T. (2d) 39 (Ont. S.C.) (Aiello) a lack of forseeability precluded employer liability. In that case a homeowner hired a contractor to install a gas furnace and hot water heater. The contractor negligently caused an explosion which levelled the homeowner’s house and damaged neighbouring houses. The court said: 

 

[T]he lay consumer is entitled to rely upon the expertise of the contractors and suppliers, and unless the work of the suppliers or contractors is such that a reasonable lay person could be expected to foresee the danger, vicarious liability will not attach.

(Aiello at 59).

 

As explained above, s. 5(1) of the British Columbia Occupiers Liability Act, R.S.B.C. 1996, c.337 (OLA) states that, subject to certain conditions, occupiers will not be liable for harm caused by the negligence of their independent contractors. The conditions are that the occupier must have exercised reasonable care in selecting and supervising the contractor, and that it must have been reasonable to undertake the work in question. 

 

Section 5(2) of the OLA explains that s. 5(1) must not be construed as restricting or excluding occupier liability imposed by any other Acts. The OLA does not clarify the effect of s. 5(1) on the common law. In contrast, s. 3(4) of the OLA, which deals with the direct duty on occupiers, says that nothing in s. 3 relieves the occupier of more stringent duties imposed by other enactments or rules of law. In other words, s. 5(2) refers only to other Acts while s. 3(4) refers to other Acts and the common law. It is also relevant that the independent contractor exclusion clauses in the Ontario (Occupiers’ Liability Act, R.S.O. 1990, c. O.2, s.6(3) and Prince Edward Island (Occupiers’ Liability Act, R.S.P.E.I. 1988, c. 28, s. 6(3) occupiers’ liability statutes explicitly say that those clauses do not affect the non-delegable duties imposed upon occupiers by the common law. The omission of such qualifications from the British Columbia OLA is significant and suggests that the British Columbia OLA may override common law non-delegable duties.

 

The effect of s. 5(1) of the OLA on the common law was considered in Milina v. Bartsch (1985), 49 B.C.L.R. (2d) 33 (B.C.S.C.) (Milina). In that case the plaintiff was rendered quadriplegic when doing a double back flip off an artificial ramp onto an inflatable mattress at an indoor ski show. McLachlin J. held that the dangerous work category of non-delegable duty was not applicable because the matter was governed by the OLA of British Columbia rather than by the common law. Referring to s. 5 of the OLA, and noting that it contradicted the common law, McLachlin J. held that the specific legislation must prevail, and that common law non-delegable duties were not applicable. In Milina it was held that the employer had acted reasonably in selecting and supervising the contractor, and that the work was reasonably undertaken. Accordingly, the owner was not responsible for the negligence of its independent contractor.

 

This issue was considered again in Dixon v. Eldorado Development Corp. (1999), [2000] 1 W.W.R. 671 (B.C.S.C.) (Dixon). In Dixon the court held that hoisting plywood up the side of an apartment building to repair a balcony was not dangerous and therefore the dangerous work category of non-delegable duty did not apply. However the employer was held liable under s. 5(1) of the OLA for negligently supervising the contractor. In obiter, referring to Milina, the court held that even if it had been dangerous work the OLA would have prevailed over the common law and the employer would only have been liable if he had been negligent in selecting or supervising the contractor.

 

The foregoing indicates that a strong argument can be made that non-delegable duties have been overruled in British Columbia by the OLA. This argument is strengthened by noting that subsequent to the Milina case, the Ontario OLA was modified to include the above mentioned qualification that the independent contractor liability exclusion does not negate non-delegable duties at common law. In Milina it was necessary for McLachlin J. to consider both the British Columbia and the Ontario statutes because although the action was brought in British Columbia the accident occurred in Toronto. At the time of the accident, the Ontario statute did not have the qualification that common law non-delegable duties were unaffected by the statute. The Ontario Legislature found it necessary to amend the statute to preserve non-delegable duties at common law. Since the same has not been done in British Columbia the statute arguably continues to override common law non-delegable duties. This argument might be tested by owners in British Columbia who are being sued for the negligent acts of independent contractors on the basis of the dangerous work category of non-delegable duty.

 

Although often treated as a category of Rylands v. Fletcher, liability for negligently started or controlled fires is distinct from both Rylands v. Fletcher and occupiers liability law: Klar, Tort Law, 3rd ed. (Toronto: Carswell, 2003). Even if the use of the land is natural, and therefore Rylands v. Fletcher is not applicable, owners will still be liable for negligently started fires which start on their property. 

 

Before 1774 liability for fires in England was strict without exception. No excuse was permitted when an owner allowed a fire to spread to neighbouring properties. This was due to the danger of fire in crowded and largely wooden medieval towns and villages. In 1774 the Fire Prevention (Metropolis) Act 14 Geo. III., 1774 (Imp.), c. 78 (the Fire Act) was passed and allowed a narrow defence for harm caused by spreading fire:

 

No Action, Suit, or Process whatever, shall be had, maintained, or prosecuted, against any Person in whose House, Chamber, Stable, Barn, or other Building, or on whose Estate any Fire shall, ... accidentally begin, nor shall any Recompense be made by such Person for any Damage suffered thereby, any Law, Usage, or Custom, to the contrary notwithstanding.

 

The Fire Act is in force in British Columbia (Port Coquitlam v. Wilson, [1923] 2 D.L.R. 194 at 200, [1923] S.C.R. 235) and courts have held that “accidental” fires do not include fires caused by negligence, or fires that would invoke liability under the rule in Rylands v. Fletcher: Des Brisay et al. v. Canadian Government Merchant Marine et al., [1940] 4 D.L.R. 171 (B.C.C.A.). In other words a narrow definition is given to “accidentally”; it only includes fires started unforeseeably by strangers, or by acts of god such as lightening. However, under the Fire Act liability is not totally strict because the fire has to be the result of some identifiable person’s negligence. The plaintiff must establish such negligence before he can recover.

 

In H & N Emanuel Ltd. v. GLC, [1971] 2 All E.R. 835 (C.A.) Lord Denning made it clear that the occupier will not be liable for the escape of fire which is not due to anyone’s negligence, but confirmed that occupiers are liable for fires started by their independent contractors.

 

In United Motor Services Ltd. v. Hutson, [1937] S.C.R. 294 it was confirmed that fires which are reasonably started, but negligently allowed to spread are not considered accidental: see also Balfour v. Barty-King, [1957] 1 Q.B. 496 (C.A.). Common law liability for negligently started or managed fires was confirmed in British Columbia in Franks v. Sanderson (1988), 44 C.C.L.T 208 (B.C.C.A.) and in Iversen v. Purser (1990), 73 D.L.R. (4th) 33 (B.C.S.C.).

 

A possible defence for owners may be that a statute such as the Forest Act, R.S.B.C. 1996, c. 57 permits fires to be lit and that it was not negligence that allowed the fire to spread. In Dahler v. Bruvold, [1981] 5 W.W.R. 706 (B.C.S.C.) a land owner negligently allowed a fire to destroy the plaintiff’s farm machinery. Since in that case the defendant was negligent he was liable for the harm. However Low L.J.S.C. held that the fire was not non-natural because it was permitted under statute and therefore Rylands v. Fletcher did not apply. The judgment suggests that absent negligence or failure to meet the standard of care described by the Ministry of Forests Act, R.S.B.C. 1960, c. 153 (now the Forest Act, R.S.B.C. 1996, c. 57), the defendant would not have been liable because the fire was permitted by statute.

 

However, in the earlier case of Gogo v. Eureka Saw Mills Ltd., [1944] 3 W.W.R. 268 (B.C.S.C.), affirmed [1945] 3 W.W.R. 446 (B.C.C.A.) a fire set for husbandry as permitted by the Forest Act was deemed non-natural and the plaintiff recovered under Rylands v. Fletcher and, in the alternative, negligence. Again the difficult distinction between natural and non-natural use led to inconsistent results.

 

The key conclusion from the foregoing is that in most instances owners will be liable for fires whether under common law strict liability for fires, or Rylands v. Fletcher, and it will be no excuse for owners to say that the fire was started by an independent contractor. 

 

The discussion thus far has essentially been a descriptive summary of the law. In the remaining part of the article the policy considerations behind vicarious liability for the acts of independent contractors are considered.

 

The conflicting authorities in Tables 1 and 2 indicate that the distinction between dangerous and non-dangerous work is far from obvious as suggested by Cockburn J. in Bower. Atiyah supports the conclusion that the distinction is unworkable saying that “there is practically no operation which cannot be said to be dangerous, for any kind of work is liable to cause injury or damage if due care is not taken”: Atiyah, Vicarious Liability in the Law of Torts (London: Butterworth, 1967) at 354. Atiyah describes the dangerous work doctrine as “manifestly unsatisfactory” because of the “sheer impossibility of producing any satisfactory criteria for deciding (either as a question of fact or as a question of law) whether any particular operation can be called extrahazardous”: Atiyah at 372.

 

In Australia the dangerous work category of non-delegable duty was discarded in the case of Stevens v. Brodribb Sawmilling Co. Pty. Ltd. (1986), 63 A.L.R. 513 (Aust. H.C.) (Stevens). The High Court described the distinction between acts that are extra-hazardous and those that are not as “elusive”: Stevens at 521. Instead of making a yes/no decision as to whether the activity is dangerous or not, the court advocated a method of adjusting the standard of care on a sliding scale depending on the danger associated with the activity: the more dangerous the activity, the greater the burden on the employer to ensure that care is taken. Accordingly, the court considered the issue of liability by applying the regular negligence principles of forseeability and proximity. In Stevens the plaintiff was an independent contractor logging truck driver. An independent contractor bulldozer driver negligently caused harm to the plaintiff when loading logs onto the plaintiff’s truck using a makeshift ramp. The defendant was the logging company who employed both of these independent contractors. The court held that the accident was not one which a reasonable person would have taken special measures to guard against. Accordingly, the defendant logging company was not liable for the acts of the independent contractor bulldozer driver.

 

Other courts have also expressed dissatisfaction with the dangerous v. non-dangerous distinction: in Read v. J. Lyons & Co. Ltd., [1947] A.C. 156 (H.L.), the House of Lords rejected the suggestion of a general tort of strict liability for extra-hazardous activities. In Lewis, McLachlin J. opposed the idea of discrete categories of non-delegable duties:

 

Rather than confirm or add to the hodgepodge of categories, we should seek the underlying principles that justify the imposition of a non-delegable duty on a person who hires an independent contractor to have work done.

(Lewis at para. 52.)

 

In Lewis, Cory J. discussed a number of policy considerations supporting government liability for the negligence of the independent contractor who failed to adequately clear the slopes above Highway 99 of loose rocks. McLachlin J. supported those policy justifications for liability and said that whether an employer is liable for the negligence of its independent contractor should in every case depend on the relationship between the plaintiff and the employer. Quoting the Australian case of Kondis v. State Transport Authority (1984), 154 C.L.R. 672 (Aust. H.C.), McLachlin J. said:

 

[Liability should be found where there is a special relationship of reliance] because the person upon whom the duty is imposed has undertaken the care, supervision or control of the person or property of another or is so placed in relation to that person or his property as to assume a particular responsibility for his or its safety, in circumstances where the person affected might reasonably expect that due care will be exercised.

(Lewis at para. 54).

 

It is clear from Lewis that such a special relationship of reliance exists between the government and road users. It is less clear whether such special relationship will exist between private employers and neighbouring landowners or members of the public passing by construction sites. The policy based relationship examination method suggested by McLachlin J. is compatible with the adjustable standard of care method adopted by the Australian High Court in Stevens: in each case the danger of the work informs the nature of the relationship and the degree of dependence and reliance the plaintiff places on the employer of the independent contractor. This was the method adopted by the Australian High court in Burnie Port Authority v. General Jones Pty. Ltd., [1994] 120 A.L.R. 42 (Aust. H.C.) (Burnie). In Burnie, an independent construction contractor negligently set fire to some flammable insulation material while welding. The fire spread next door and destroyed the plaintiff’s property. The majority of the High Court found the defendant employer liable for the negligence of its contractor because it had control over the work and the vulnerable neighbour was relying on the employer to ensure that care was taken in performing the renovation work. However, there were two strong dissenting judgments in Burnie which would not have allowed recovery: Brennan J. would have denied recovery because the welding was not inherently dangerous and was only made dangerous by the collateral negligence of the contractor. Similarly, McHugh J. would have denied liability because the employers did not have control over the contractor and did not authorize the negligent acts.

 

It remains to be seen how Lewis will be applied in the Canadian construction context when the employer is a private party. However, the policy driven relationship analysis suggested by McLachlin J. in Lewis may be more rational and predictable than trying to fit unusual fact patterns into rigid categories of non-delegable duties. 

 

As discussed in above, Rylands v. Fletcher was subsumed into the law of negligence in Australia in the Burnie case. The natural v. non-natural distinction required in the Rylands v. Fletcher analysis presents similar difficulties to the dangerous v. non-dangerous distinction in the dangerous work category of non-delegable duty. The argument for maintaining Rylands v. Fletcher is that it provides deserving plaintiffs with a remedy when they are unable to prove negligence. This argument assumes it is desirable to provide judges with as many tools as possible to achieve a fair decision in a given case. However, with liability under negligence, non-delegable duty, strict liability for fires, and the other strict liability actions, almost all deserving cases would be covered. Perhaps Rylands v. Fletcher should be subsumed into negligence on the basis that the benefit of increased certainty in the law will offset the cost of rare deserving plaintiffs not being able to recover.

 

Whether or not vicarious liability for employers should be expanded or reduced depends on the whether one views tort law primarily as a system of compensation for injured plaintiffs, or as a system based on moral fault designed to deter harmful conduct. When a plaintiff suffers harm caused by an independent contractor there will always be a right of recovery against the contractor. Only when the primary tortfeasor is unable or unavailable to compensate for the entire loss will the plaintiff attempt to recover from the employer. In these instances it is ultimately a matter of which innocent party, the plaintiff or the owner, should bare the loss.

 

Commercial reality necessitates delegation of everyday activities to independent contractors. In Daniel v. Metropolitan Rly. Co. (1871), L.R. 5 H.L. 45 at 61 Lord Westbury said:

 

The ordinary business of life could not go on if we had not a right to rely upon things being properly done when we have committed and entrusted them to persons whose duty it is to do things of that nature, and who are selected for the purpose with prudence and care, as being experienced in the matter, and are held responsible for the execution of the work.

 

Forcing employers to supervise and control the work of independent contractors interferes with freedom of contract, stifles entrepreneurship, and promotes wasteful double insurance rather than efficient first party insurance. Loss spreading policy considerations may support non-delegable duties being imposed on government, but oftentimes owners, developers, and main contractors are not in a position to spread loss. These policy factors should be carefully weighed by the legislators and courts before expanding vicarious liability for construction owners.

 

Construction contracts may transfer responsibility for site safety to the contractor. However, even if the contractor assumes responsibility for site safety the contract will only determine responsibility between the owner and the contractor and the owner may still be legally liable to injured third parties.

 

Section 4(2) of the OLA limits the ability of the owner to modify or exclude its duties under the OLA:

 

4(2) An occupier must not restrict, modify or exclude the occupier's duty of care under subsection (1) with respect to a person who is

(a) not privy to the express agreement, or

(b) empowered or permitted to enter or use the premises without the consent or permission of the occupier.

 

Negligent performance of the work will be a breach of contract by the contractor. Even if there are no express terms requiring indemnification such right of the owner may be implied. However in Empress Towers Ltd. v. Bank of Nova Scotia (1991), 73 D.L.R. (4th) 400 at 410 (B.C.C.A) (Empress) it was explained that:

 

The test for the implication of a term is one of necessity as well as reasonableness -- a term necessary to give business efficacy to the contract [and that] the court's function is to interpret and apply the contract which the parties have made for themselves. 

 

Therefore, it is risky to rely on implied indemnities and owners should ensure that their contracts with their contractors explicitly provide indemnity against the various types of liability discussed above. 

 

When drafting indemnity clauses the distinction between vicarious and direct responsibility becomes important. Strictly speaking owner liability under the OLA, under strict liability, and under non-delegable duty, is not vicarious but direct. Liability arises from the owner’s breach of its personal duty to the plaintiff. As noted above, in Scarmer Construction Ltd. v. Geddes Construction Ltd. the independent contractor and the owner were described as several concurrent tortfeasors. However other judgments, including St. John (City) v. Donald and Aiello v. Centra Gas Ontario Inc., discussed above, have described owner liability as vicarious and therefore the distinction is not entirely clear. Nevertheless a negligent contractor may argue that the owner’s liability arises from breach of its own duty and was not from the contractor’s negligence. This argument may not be accepted in court, but owners should eliminate this uncertainty by protecting themselves with explicit indemnity clauses that refer specifically to non-delegable duties, Rylands v. Fletcher, nuisance, and sections 3 and 5 of the OLA.

 

The “rule” that owners are not liable for the acts of their independent contractors is less of a rule than a precursor to the list of exceptions. In some cases owners may even be liable on more than one of the possible grounds of occupier’s liability, strict liability, non-delegable duty, and strict liability for fire predicated on negligence.

 

In many cases plaintiffs will recover from the contractor as the primary tortfeasor. However, if the contractor is insolvent or has insufficient insurance coverage, the plaintiff may attempt to recover from the owner. Properly advised owners can accept the risk, customize their contracts to mitigate liability risk, or take out additional insurance. However prevention is better than cure and cases like Carriere v. Schlachter (1999), [2000] 1 W.W.R. 397 (Alta. Q.B.), in which the owner was liable for not warning the contractor of the especially dangerous power line, prove that there is no substitute for common sense and proactive initiative. When drafting contract documents solicitors should understand their clients business and ask about elements particular to the specific site which should be dealt with in the contract documents.