Wood v. Enbridge Gas Distribution Inc., et al. [Indexed as: Wood v. Enbridge Gas Distribution Inc.]
107 O.R. (3d) 297
2011 ONSC 5494
Ontario Superior Court of Justice,
Divisional Court,
Chapnik, Gordon and Lauwers JJ.
September 20, 2011
Workers' compensation -- Right to sue -- Applicant working as pipe fitter for respondent -- Both parties intending that applicant would be [page298] classified as independent contractor -- Respondent exercising high degree of control over applicant's work -- Applicant having marginal financial risk and no meaningful opportunity for profit -- Workplace Safety and Insurance Appeals Tribunal determining that applicant was worker rather than independent contractor or "independent contractor" -- Decision held reasonable.
The applicant worked for the respondent as a pipe fitter. He was seriously injured while removing a decommissioned gas standpipe. He started an action for damages. On a "right to sue" application under s. 31 of the Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, the Workplace Safety and Insurance Appeals Tribunal found that the applicant was a worker and not an independent contractor or "independent operator", and that he was not entitled to sue the respondents in a civil action. The applicant applied for judicial review of that decision.
Held, the application should be dismissed.
The Tribunal accepted that both parties intended that the applicant would be classified as an independent contractor for regulatory purposes, but found that the structure was imposed by the respondent for its own benefit. The Tribunal noted that the respondent continued to pay a salary to the applicant when he was off work and after he returned to work on modified duties, the applicant's earnings were reported to the Workplace Safety and Insurance Board, the respondent exercised a high degree of control over his work, he did not hire his own helpers, he had marginal financial risk and he had no meaningful opportunity for profit. The Tribunal's decision fell within the range of possible and acceptable outcomes that were defensible with regard to the facts and the law. It was not unreasonable.
APPLICATION for judicial review of a decision of the Workplace Safety and Insurance Appeals Tribunal.
Cases referred to671122 Ontario Ltd. v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983, [2001] S.C.J. No. 61, 2001 SCC 59, 204 D.L.R. (4th) 542, 274 N.R. 366, J.E. 2001-1832, 150 O.A.C. 12, 17 B.L.R. (3d) 1, 11 C.C.E.L. (3d) 1, 8 C.C.L.T. (3d) 60, [2002] CLLC Â210-013, 12 C.P.C. (5th) 1, [2001] 4 C.T.C. 139, 108 A.C.W.S. (3d) 300; Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634, 188 O.A.C. 201, 48 C.P.C. (5th) 56, 132 A.C.W.S. (3d) 15 (C.A.); Davies v. Clarington (Municipality) (2009), 100 O.R. (3d) 66, [2009] O.J. No. 4236, 2009 ONCA 722, 312 D.L.R. (4th) 278, 254 O.A.C. 356, 77 C.P.C. (6th) 1; Joey's Delivery Service v. New Brunswick (Workplace Health, Safety and Compensation Commission), [2001] N.B.J. No. 222, 2001 NBCA 17, 201 D.L.R. (4th) 450, 239 N.B.R. (2d) 300, 106 A.C.W.S. (3d) 181; Mills v. Ontario (Workplace Safety and Insurance Appeals Tribunal), [2008] O.J. No. 2150, 2008 ONCA 436, 237 O.A.C. 71, 168 A.C.W.S. (3d) 679; Moon v. Sher, 2004 39005 (ON CA), [2004] O.J. No. 4651, 246 D.L.R. (4th) 440, 192 O.A.C. 222, 135 A.C.W.S. (3d) 202 (C.A.); New Brunswick v. Dunsmuir, [2008] 1 S.C.R. 190, [2008] S.C.J. No. 9, 2008 SCC 9, 329 N.B.R. (2d) 1, 64 C.C.E.L. (3d) 1, 164 A.C.W.S. (3d) 727, EYB 2008-130674, J.E. 2008-547, [2008] CLLC Â220-020, 170 L.A.C. (4th) 1, 372 N.R. 1, 69 Imm. L.R. (3d) 1, 291 D.L.R. (4th) 577, 69 Admin. L.R. (4th) 1, 95 L.C.R. 65, D.T.E. 2008T-223; Wood v. Enbridge Gas Distribution Inc., [2010] O.W.S.I.A.T.D. No. 1509, 2010 ONWSIAT 1474 (W.S.I.A.T.) Statutes referred to Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, ss. 27 [as am.], 28, 31 [page299] Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 1.04(1.1)
M.F. Head, for applicant. David Reiter, for respondent Enbridge Gas Distribution Inc. Andrew Biggart, for respondent Robert B. Somerville.
The judgment of the court was delivered by
[1] CHAPNIK J.: -- The applicant seeks judicial review of the decision of Vice-Chair Bernard Kalvin of the Workplace Safety and Insurance Appeals Tribunal ("WSIAT") dated June 18, 2010 [[2010] O.W.S.I.A.T.D. No. 1509, 2010 ONWSIAT 1474 (W.S.I.A.T.)]. In the "right to sue" application, the vice- chair found that the applicant was a worker and not an independent contractor or "independent operator" at the relevant time; accordingly, the applicant was not entitled to sue the respondents in a civil court action.
[2] At the conclusion of the hearing before us, the panel informed counsel that the appeal would be dismissed with reasons to follow. These are those reasons. Background
[3] The applicant was a pipe fitter working for the defendant Double G Gas Services ("Double G") from 2005 through 2007. On February 14, 2007, he was to remove a decommissioned natural gas standpipe at 2 Harper Gardens, Toronto. He discovered that the standpipe, which should have been empty of gas, was full of gas under high pressure. Despite his best efforts to avert disaster, there was an explosion in which an occupant of the house was killed and the applicant was seriously injured.
[4] The applicant started an action in the Superior Court of Ontario for damages, alleging that he was working as an independent contractor or independent operator for Double G at the time of the explosion. The respondents commenced a "right to sue" application under s. 31 of the Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16 (the "Act"), which authorizes the tribunal to determine "whether, because of this Act, the right to commence an action is taken". Sections 27 and 28 of the Act prohibit a worker injured in the course of employment from suing his or her employer if he was injured while acting in the capacity [page300] of an employee or worker at the relevant time and not as an independent contractor.
[5] In written reasons released June 18, 2010, the tribunal allowed the application of the respondents and held that the applicant was not entitled to sue the respondents. The applicant seeks judicial review of this decision. The Standard of Review
[6] It is well settled, and the parties agree, that the WSIAT is a specialized tribunal protected by a privative clause that is entitled to judicial deference on the reasonableness standard: Mills v. Ontario (Workplace Safety and Insurance Appeals Tribunal), [2008] O.J. No. 2150, 2008 ONCA 436, 237 O.A.C. 71.
[7] The reasonableness standard of review is explained by the Supreme Court of Canada in New Brunswick v. Dunsmuir, 2008 SCC 9, [2008] 1 S.C.R. 190, [2008] S.C.J. No. 9, at para. 47:
Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. Discussion
[8] The hearing before the tribunal extended over a period of three days with all parties being represented by counsel. The evidence presented to the tribunal was fairly extensive, consisting of a number of volumes of documentary evidence, the viva voce evidence of four witnesses and legal argument.
[9] In 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983, [2001] S.C.J. No. 61, the Supreme Court of Canada noted, at paras. 47 and 48, that the "central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account".
[10] In his 15-page decision, the vice-chair analyzed the evidence in the context of the jurisprudence and the WSIAT's specialized operational policy, which details a number of criteria as to whether the working relationship should be characterized as [page301] that of an "independent contractor" or "independent operator", or as a "worker".
[11] The applicant advanced the position that the vice-chair unreasonably concluded that the applicant was a worker with Double G, and not an independent contractor. His counsel, Mr. Head, asserted that in conducting this inquiry the tribunal misconstrued some of the evidence that he did review and ignored certain key features of evidence.
[12] Among the bits of evidence that counsel submitted were misconstrued, he cited the fact that the applicant did not bill the homeowners for his work but billed Double G (which the tribunal called "significant"), the evidence of some flexibility in setting appointments, in attending training meetings and in quality control, and the ability of each side to sever the relationship without notice, which all lean toward the conclusion that the applicant was an independent contractor and not an employee.
[13] Counsel argued that the applicant's obligation to obtain liability insurance as a condition of working with Double G was evidence that he was an independent contractor, as was the fact that he was asked each day if he wanted to work that day, evidence that the tribunal appears to have ignored.
[14] Counsel argued especially forcefully that the tribunal did not give proper weight to the important aspect of the "intention" of the parties as shown by their contractual arrangements, and confused "intention" with "motivation".
[15] Close reading of the tribunal's reasons, however, displays the vice-chair's appreciation of the particular circumstances [at para. 33]:
One criterion identified in the Tribunal's jurisprudence is the intention of the parties. In this case the evidence indicates that the parties intended to structure their relationship so that Wood would be regarded as an independent operator. Double G did not make source deductions from its payments to Wood as it did with other workers, such as its office staff. In his 2005 tax return, Wood reported the income he earned from Double G as business income. He deducted certain expenses from that income. Double G included sums to cover GST in their payments to Wood. Wood opened a GST account. However, I find that this structure was one which was imposed by Double G because of benefits which flowed to it from this arrangement. Drysdale testified, for example, that having its fitters classified as independent operators prevented the fitters from being unionized. It was not an arrangement over which Wood or the other fitters had any significant control or input. They were essentially told by Double G how the employment relationship would be structured. Nevertheless, I am prepared to accept that both parties intended that Wood would be classified as an independent operator for regulatory purposes. However, the fact that the parties intended that Wood would be an independent operator does little to persuade me that [page302] he actually was one, when an overwhelming preponderance of the evidence suggests otherwise. (Emphasis added)
[16] The law is well settled that a tribunal is not obligated to deal with every fact and every argument raised at the hearing or in the evidentiary record. The use by the tribunal of the words "for example" in the quote above is telling. The vice-chair also considered factors that favoured the applicant's position in conducting his assessment, including the fact that he owned some of his tools and invested in his own vehicle.
[17] The tribunal was alive to the point made by Roberston J.A. in Joey's Delivery Service v. New Brunswick (Workplace Health, Safety and Compensation Commission), 2001 NBCA 17, [2001] N.B.J. No. 222, 201 D.L.R. (4th) 450 (C.A.), at paras. 79 and 83:
That document can be used to supplement viva voce evidence, provided that the written word corresponds with the manner in which the parties actually conduct themselves. In these cases, the law is concerned with what people actually do and not what they agreed to do. More importantly, the law will not blindly accept the classification label the parties have placed on their relationship. @7 . . . . .
At the same time, it is universally accepted that a worker who contributes capital, by purchasing tools or equipment used in providing a service, cannot, without more, be deemed an independent contractor. . . . This is because some employers are able to exercise sufficient control over their employees to compel purchase of their own tools in the same way that they may be obligated to purchase their own uniforms.
[18] The vice-chair noted that despite Mr. Wood's ostensible status as independent contractor, Double G continued to pay a salary to him when he was off work and after he returned to work on modified duties. Further, the applicant's earnings were reported to the Workplace Safety and Insurance Board.
[19] The tribunal's conclusions were grounded in and supported by the evidence. The vice-chair was mandated by the Act to determine the "central question" posed by the legislation and Sagaz, whether in reality the applicant's services were performed as an independent contractor or as a worker. The tribunal concluded [at para. 37]:
In sum, the evidence in this case does not reveal that Wood was performing his work as a gas fitter "as a person in business on his own account," to use the words of Major J. in the Sagaz case. The first factor identified in the test outlined in that case concerns the level of control which the employer has over the worker's activities. As noted earlier, in my view Double G exercised a high degree of control over Wood's work. Double G provided initial training, ongoing training, maintained resource personnel for the fitters to consult during the course of their [page303] work, and provided quality assurance and performance evaluations in respect of the fitters' work. Wood did not hire his own helpers, he had marginal financial risk, and he had no meaningful opportunity for profit. Under any of the tests outlined earlier in these reasons, Wood was a worker rather than an independent operator.
[20] We see no error in law and no misapprehension of the facts in the tribunal's reasons. What the applicant has attempted to do in this application is essentially to re-argue his case and persuade us to re-weigh the evidence. In our view, however, the tribunal's review and analysis of the facts was transparent and intelligible, and the conclusions were consistent with the prevailing jurisprudence and the tribunal's policy as applied in "right to sue" situations. The decision falls within the range of possible and acceptable outcomes that are defensible with regard to the facts and the law.
[21] The application is accordingly dismissed with costs, if demanded.
[22] The respondent Enbridge Gas seeks costs in the amount of $15,000, all inclusive, on a partial indemnity basis against a full indemnity bill of about $19,000. The respondent Robert B. Somerville seeks costs in the amount of $7,500, all inclusive.
[23] The relevant principles were canvassed by the Court of Appeal in Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66, [2009] O.J. No. 4236 (C.A.), per Epstein J.A. The overriding principles are fairness and reasonableness: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.). An element is the reasonable expectation of the party having to pay: Moon v. Sher, 2004 39005 (ON CA), [2004] O.J. No. 4651, 246 D.L.R.(4th) 440 (C.A.), at paras. 21, 22, 35. Proportionality also plays a role: rule 1.04 (1.1) [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194].
[24] Considering these factors, we fix costs at $12,000, all inclusive, payable to Enbridge Gas; and $5,000, all inclusive, payable to Robert B. Somerville, if demanded.
Application dismissed.