Veolia ES Canada Industrial Services Inc. v. Collins Frazer Engineering Inc.
COURT FILE NO.: 7989/17
DATE: 2022-09-07
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
VEOLIA ES CANADA INDUSTRIAL SERVICES INC.
Plaintiff
– and –
COLLINS FRAZER ENGINEERING INC.
Defendant
Dan Leduc, for the Plaintiff
Harold S. Ginn, for the Defendant
HEARD: August 10, 2022
thomas, rsj.:
The Motion
[1] This decision relates to a motion for summary dismissal of this action pursuant to r. 20.01(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”). The action claims indemnification and/or damages in the amount of $5,500,000.
[2] The plaintiff (“Veolia”), alleges negligence, negligent misrepresentation, and breach of contract. Veolia carried on industrial cleaning and maintenance services at a facility located at 449 Scott Road in Sarnia, Ontario.
[3] The defendant, Collins Frazer Engineering Inc., is an engineering firm located in Sarnia and was at the time of the incident known as Collins-Ferrera Engineering. There was a change of name in February 2016.
[4] There was an explosion at the Veolia location on October 25, 2014. That industrial accident severely injured five employees, with one employee subsequently losing his life. Veolia’s claim is for indemnification and/or damages from the defendant for sums it has paid to defend Criminal Code charges and regulatory offences related to this accident.
[5] I have extensive materials from each of the parties that include affidavits, discovery transcripts, affidavits of documents, factums, and the decisions of the Ontario Court of Justice regarding related prosecutions.
Facts
[6] A detailed history of the circumstances leading up to this tragedy is necessary. It needs to include an examination of the professional relationship between Veolia and Collins-Ferrera (now Collins Frazer). For the purposes of these reasons, I will refer to the defendant as “Collins Frazer.”
[7] On November 20, 2013, Inspector Sal Lopetrone, an Occupational Health and Safety Inspector at the Ministry of Labour, (“MOL”), attended at Veolia’s Sarnia location and delivered a field visit report.
Detailed Narrative:
Abrasive blasting and coating applications are being conducted at this workplace location. The employer recently (Feb 2013) expanded into this workplace location from their main Sarnia location at 605 Scott Rd. Sarnia.
Non silica abrasive blast media is reported to be used at this workplace location. Abrasive blasting is conducted in two areas of this workplace location.
Breathing area is provided from portable compressors. Breathing air is analysed bi-annually; analysis records are kept at the workplace and with portable trucks.
Breathing air from all lubricated compressors are required at minimum to have a high temp alarm, low oil level alarm, in line carbon monoxide (CO) detector and alarm. The employer must also ensure that CO – CO alarms are not being used. STOP WORK ORDER ISSUED.
No Pre-Start Health and Safety Reviews were conducted prior to starting up operation at this workplace location.
Live electrical outlets and other electrical devices / sources were observed inside the spray pain and thermal spray areas.
It was understood workers are fit tested and receive training in the selection, care, use and maintenance of the respiratory protection they use. However, a respirator was observed hanging to the left of the spray paint area entrance door and appeared that the inside of the respirator had not been cleaned for a long period of time (the area of the seal appeared to be clean).
The employer is to ensure that the electrical tools used outdoors or in wet areas are protected by a ground fault circuit interrupter.
The employer is to ensure that the electrical connection between the 8T white blasting pot and the grey compressor is suitable for its use and certified by the CSA or ESA.
A MOL hygiene consultant will be contacted to further review the Thermal Spray Applications (TSA); ie hearing protection, respiratory protection, skin and eye protection for all workers involved in the application of the TSA.
Bottle carts were not observed to be inside the TSA area, it was reported that they had been taken to the main shop location. It was understood that a ration of 11 oxygen : 1 propane bottles are used when performing the TSA and that these bottles last approximately one 8 hour shift.
[8] The Inspector issued several stop work orders related to the work undertaken at this location, but those deficiencies do not relate to the cause of the explosion which occurred almost a year later. However, requirement number 7 from the report, set out below, is of importance to this proceeding.
Pursuant to clause 54(1)(f) of the Occupational Health and Safety Act this inspector, for the purposes of carrying out his duties and powers under this act and the regulations, require in writing the employer to assess the equipment and processes located at 449 Scott Rd, ON that meet the intent of section 7 of the Regulation for Industrial Establishments O.Reg 851/90 and cause any tests described in clause (e) to be conducted or taken, at the expense of the employer, by a person possessing such special expert or professional knowledge as required by section 7 of O.Reg 851/90 and to provide, at the expense of the employer, a report or assessment by that person or persons.
[9] Prior to the attendance of Inspector Lopetrone in November 2013, Veolia had expanded its activities to include Thermal Spray Aluminum (“TSA”) at this location. TSA is a process whereby a wire form of aluminum is melted by an energy source and propelled or sprayed onto another metal structure (pipe in this case) for corrosion control and wear resistance.
[10] This new process is cited in the Detailed Narrative of Inspector Lopetrone set out above. Prior to this new process being commenced by Veolia at this location, a Pre-Start Health and Safety Review (“PSSR”), should have been done to the satisfaction of the MOL. A PSSR is legislatively required before certain equipment or processes (like TSA) are put into operation, primarily with a view to worker safety. PSSRs are required by Section 7 of Regulation 851, Industrial Establishments under the Occupational Health and Safety Act, R.S.O. 1990, c. O.1 (“OHSA”).
[11] In the process undertaken by Veolia, the projection of the melted aluminum caused aluminum dust to be emitted. Aluminum dust, in sufficient quantities and if not ventilated properly, becomes highly explosive if contacted by an ignition source. Veolia had positioned a mobile dust collector outside, near the building. It was not approved for the TSA process and did not collect all the dust particles. It was owned by Veolia and became the focus of attempts to ameliorate the dust problem.
[12] While Inspector Lopetrone directed that the s. 7 compliance be completed by December 31, 2013, part of the unfortunate circumstances that lead up to this deadly accident saw the MOL regularly extending the compliance date. No PSSR was ever completed to the date of the explosion. It is sadly ironic that the Review is designated as Pre-Start, but the Veolia process had been underway for at least a year before the accident.
December 13, 2013
[13] Clarissa Bell, a Veolia employee, submitted a written Risk Assessment to the MOL seeking to comply with the MOL directive.
January, 2014
[14] The date of compliance set by the MOL had now passed without further action. In January, Veolia was advised that the Bell report was insufficient and it became clear to Veolia that a professional engineering report reviewing the process and eventually conducting a PSSR was needed to attain MOL compliance.
February, 2014
[15] At some point in February 2014, Veolia contacted the defendant, Collins Frazer. Representatives of the defendant, Renzo Ferrera and Ken Pinch, met with Tony Lavoratore of Veolia at the Sarnia facility. Ferrera was – at that time – a principal in the defendant engineering firm.
[16] While no TSA operations were underway that day, there was a discussion of the process, materials and the dust accumulation concerns. Certainly, the external dust collector was there to be seen.
[17] On February 5, 2014, Ferrera emailed Veolia with a subject line “TSA Metalizing Process Investigation – PSSR (Pre-Start Safety Review) Preparation – Ministry”.
[18] The email set out three phases to the proposed work to be done by Collins Frazer:
Phase 1: Investigative, determining what is required and how it will be employed as well as identifying base PSSR (Pre-Start-up Safety Review) requirements. Phase 1 also includes for preliminary interaction with the MOL (Ministry of Labour) pertaining to the current Order.
Phase 2: Undertaking the detailed engineering required in support of the construction of the systems and services required to meet the process ventilation demands and material handling demands pertaining to the TSA Process.
Phase 3: Preparation of the final PSSR, implementation of same and finalized Ministry of Labour order compliance.
[19] Importantly, Ferrera confirmed that the defendant would be “undertaking a site review of the TSA metalizing process including the existing facility that houses same in order to determine the existing conditions and resources in relation to the required services as may be deemed necessary by the undertaking of a PSSR.”
[20] In February there were communications about a quote on a final cost but Ferrera made it clear that at that time the only quote would be for the initial assessment.
March, 2014
[21] On March 10, 2014, Veolia forwarded a purchase order to Collins Frazer agreeing to pay $5,650 for the Pre-Start Health and Safety Review. The formal retainer and contractual relationship was in place at that point.
[22] On March 28, 2014, Ferrera emailed Lopetrone at MOL. The content of this email is important for a number of reasons and I have set it out below. It clearly recognizes that Collins Frazer was retained to react to the field visit report as well as the MOL’s orders. It sets out the broad scope of what Ferrera believed was their assigned task. Finally, upon being notified that a professional engineering firm had been retained to resolve the TSA issues, Lopetrone effectively stepped out of the process. Clearly – rightly or wrongly – the MOL felt its concerns were on the road to rectification and their direct oversight was unnecessary. The email reads as follows:
Further to the above mentioned case please be advised that Collins-Ferrera Engineering Inc. has been retained by Veolia Environmental Services to review and assist them in resolving a number of the “Orders” pertaining to the case of discussion. At this time Collins-Ferrera Engineering Inc. are undertaking an overall review of the TSA Metalizing Process in order to:
• Determine the existing site and process conditions and resources in relation to the required services as may be deemed necessary by the undertaking of a PSS for the TSA Metalizing Process.
• Identify conditions that require additional engineering services be they electrical, mechanical and or building structure in support of a possible ventilation system(s) that meet the requirements of the ACGIH (American Conference of Governmental Industrial Hygienist) as well as all authorities having jurisdiction and facility and or other services including electrical classification that may require modification in support of the TSA Metalizing Process.
Upon completion of our initial review we will be providing Veolia with our findings and identifying to them a possible path forward.
Please feel free to contact the undersigned should you wish to discuss further any portion of this email.
(Email: Ferrera/Lopetrone (MOL) – May 28, 2014).
April, 2014
[23] During this month, messages were exchanged between Lavoratore, Ferrera and Ken Pinch (another engineer at Collins Frazer). Attempts were made to set up a time when Collins Frazer could view the TSA process. It seems the process was in operation from time to time, but during this month no viewing by the defendant took place.
May, 2014
[24] The parties held a “kick-off” meeting at the Veolia plant on May 1st. There was no demonstration of the TSA process. Pinch attended and took multiple photographs of the plant and equipment. Throughout May, June and July there were attempts to have Collins Frazer observe the TSA process under normal working conditions, but for a variety of reasons, including material deficiencies, this did not happen.
August, 2014
[25] On August 6, 2014, Ferrera messaged Lavoratore confirming:
• The site review had been completed.
• A number of additional exhaust fan systems were required.
• There were concerns regarding live outlets and the electrical devices inside the TSA process area. There would be a detailed design of the proposed ventilation system.
• A summary of the findings would go to Veolia that week.
[26] On August 20, 2014 Pinch attended the site for measurements. No one from Collins Frazer had seen the TSA process in operation at this point.
October, 2014
[27] On October 4, 2014, Collins Frazer invoiced Veolia for the work done at the initial review. On October 15, 2014, Thomas Collins, an electrical engineer at Collins Frazer, attended the site. This was the first time anyone from the defendant engineering firm saw the TSA process in operation.
[28] On October 16, 2014, there was a meeting at the site between Lavoratore, Ferrera, Collins, Pinch and Alan Speed, who was representing an HVAC company presenting a quote on its part of the systems renovations proposed by Collins Frazer.
[29] There is no consensus as between the parties as to the exact details of this discussion. This meeting consumed a significant part of the criminal trial before Justice Austin that I will discuss later.
[30] It is clear, however, that Thomas Collins was concerned about the accumulation of aluminum dust around the TSA process and, in particular, around the electrical equipment in the electrical room. He advised that the dust needed to be cleaned up and the electrical room sealed. There was no discussion related to the dust collector itself. It seems Lavoratore took this seriously and caused the clean up to be done. In his evidence at the criminal trial, Ferrera suggested that Veolia was told to stop the TSA process because of the danger. No one else present had the same recollection and there was no written direction from Collins Frazer about the safety concerns, as well as no follow-up.
[31] On October 21, 2014, Ferrera wrote to Lavoratore with a costs estimate for the extensive work being proposed. There was no further mention of safety concerns.
[32] On October 24, 2014, there was a fire and explosion in the mobile dust collector while the TSA process was ongoing. The explosion passed through the ductwork into the building, igniting the dust inside the building and causing a second explosion. The shop foreman, Jason Miller, was killed in the explosion and five other workers were seriously injured having sustained significant burns. There is no dispute as to the dynamics of this industrial accident.
The Criminal Trial
[33] In the fallout of this tragic accident, Lavoratore and Veolia were charged with criminal negligence in failing to ensure safe workplace conditions. In fact, it was the Crown’s position that no reasonable steps were taken by the accused to prevent bodily harm to the employees, despite the fact that the accused had received explicit information regarding the explosive dust collection.
[34] The criminal trial was conducted over multiple days before Justice Austin, an experienced judge of the Ontario Court of Justice sitting in Sarnia. Justice Austin heard evidence from all the individuals I have previously noted in these reasons.
[35] While the trial judge was critical of the steps taken by Lavoratore and Veolia, she could not find evidence to the criminal standard to support a finding of a “wanton and reckless disregard” for the safety of the employees.
[36] Justice Austin was also critical of the actions of the engineering firm Collins-Ferrera (now Collins Frazer). Below I have provided passages from the trial decision which include her impressions of the action and inaction of Collins-Ferrera.
Mr. Ferrera, as Project Lead, identified their role in three phases.
Phase 1: Investigative, determining what is required and how it will be employed as well as identifying base PSSR (Pre-Start-up Safety Review) requirements. Phase 1 also includes for preliminary interaction with the MOL (Ministry of Labour) pertaining to the current Order.
Phase 2: Undertaking the detailed engineering required in support of the construction of the systems and services required to meet the process ventilation demands and material handling demands pertaining to the TSA process.
Phase 3: Preparation of the final PSSR, implementation of same and finalized Ministry of labour order compliance.
The need for a preliminary evaluation made perfect common sense for all the parties. As a result, on March 28th 2014, Renzo Ferrera sent an email to the Ministry of Labour, to the attention of Inspector Sal Lopetrone, to the effect that their firm had been retained to address the Ministry work order and in particular, to “undertake an overall review of the TSA Metalizing process in order to determine the existing site and process conditions and resources in relation to the required services as may be deemed necessary by the undertaking of a PSSR for the TSA metalizing process.”
Mr. Ferrera advised the Ministry that upon completion of their initial review, they would be providing Veolia with their findings and recommending a path forward. After the initial meeting in February of 2014, the retainer agreement in March and the kick off meeting on May 1st, 2014, the communication and follow through between Veolia and Collins-Ferrera was slow and sparse for various reasons, some of which were explained due to holidays, and slow times for the TSA process. The reasons were not critical to the ultimate issue in this case, except that Collins Ferrera never did conduct “an overall review of the existing TSA Metalizing Process” nor did they “determine the existing site and process conditions and resources.”
The engineers did not examine the dust collector system at any time before the explosion of October 24, 2014. They did not examine any of the manuals or documentation relevant to the existing TSA process or equipment. They provided no report of findings.
Mr. Ferrera testified the reason these things were not done was that the project shifted gears and in particular, the focus changed to a construction project to build a new ventilation system to include a cyclone or dust collector and a new spray booth at 449 Scott Road. There was evidence that Veolia was amenable to the recommendation of Collins-Ferrera that an improved ventilation system and spray booth were required.
Mr. Ferrera essentially explained that as a result of the shift of focus, he no longer intended to review the existing process and conditions. As a result, the immediate safety issues were not being addressed by the engineering firm.
In the months between mid-March, 2014 and the 25th of October, 2014, there was no site visit to address the current situation. Collins-Ferrera clearly took no steps and ceased at some point to see their role as encompassing a safety review relative to the existing and interim arrangement. Rather, Collins-Ferrera were contemplating a larger scale improvement, according to Renzo Ferrera.
There was no evidence at this trial to the effect that Veolia or Mr. Lavoratore either agreed to or were made aware that Collins-Ferrera would no longer be conducting an examination or review of the existing process because of a change in focus. While the focus on a construction project may well have been a reasonable approach by Collins-Ferrera, it would not automatically cancel or be inconsistent with the retainer as written. It would be reasonable, even with a change in focus, for Veolia to expect that Collins-Ferrera would carry out the original mandate with respect to the existing process and conditions unless there was an express agreement to the contrary, or at least clear notice or communication about this change. The original retainer was consistent with a larger scale construction as the next step as well.
This is important because until the contemplated larger scale construction project was completed and operational, the current TSA operation and dust collector system would clearly be continuing in operation for an uncertain period of time. The attendant safety risks therefore would remain in existence.
The evidence points to the following:
A unilateral decision on the part of Collins-Ferrera to abandon the part of the retainer that called for a preliminary review dealing with safety issues currently at hand.
The Contractual obligations of Collins-Ferrera in terms of the original retainer remained in place given the absence of evidence that Veolia waived or agreed to change it.
Accordingly, it was reasonable for Veolia to rely upon the engineering firm to carry out a site inspection and review of the safety aspects of the TSA process as it then existed and to provide recommendations.
The contemplated new construction project was to build upon, rather than subtract from, the initial retainer and its call for immediate steps to be taken by Collins-Ferrera.
The addition of a new construction project can also be seen as reflective of Veolia’s interest in meeting the longer term safety concerns and needs of the TSA system on behalf of its employees.
The impact of this evidence is that the Crown has not negated the reasonableness of this step taken by Veolia in engaging a qualified engineering firm and relying upon its involvement to review the current situation and to make recommendations. Collins-Ferrera is not on trial in this case, but it is clear that the engagement of the engineering firm was important. Although it did not displace or meet the obligation of Veolia and of its management to take under OHSA, all reasonable steps to ensure the safety of workers engaged in the TSA process, nevertheless, the engagement of Collins-Ferrera was an important step, upon which both Veolia and the Ministry appear to have relied.
[37] I am entitled to consider the findings of Justice Austin in my determination of this motion for summary judgment. I must, however, be cautious considering that the focus of the criminal trial was different, as was the burden of proof imposed upon the Crown. My analysis is therefore predicated on the weight I accord to the findings of the criminal trial judge: Plate v. Atlas Copco Canada Inc., 2019 ONCA 196, 145 O.R. (3d) 1. Those findings are to be assessed against my ultimate concern: whether or not “the court is satisfied that there is no genuine issue requiring a trial …”: Rules, r. 20.03(2)(a).
The Provincial Offences Trial
[38] Veolia and Lavoratore were also charged with failure to apply to the Ministry of the Environment for an amended Certificate of Approval for the dust collector. This offence was contrary to the Environmental Protection Act, R.S.O. 1990, c. E.19.
[39] The corporate defendant, Veolia, pleaded guilty and accepted an agreed statement of facts. Those facts indicated that the external dust collector, while approved for former blasting and painting projects, was altered to collect the aluminum dust created by the TSA process. That alteration was never approved by the Ministry.
[40] The charge was withdrawn against Lavoratore and Veolia was fined $175,000.
Expert Reports
[41] The moving party, Collins Frazer, produced an engineering report from Rene Caskanette. Mr. Caskanette concluded that Collins Frazer met professional performance standards of Professional Engineers and that the work of Collins Frazer did not cause the explosion or fire on October 25, 2014.
[42] The responding party, Veolia, produced the report of Ralph Balbaa (“Balbaa”). Balbaa found that there were numerous signs of imminent hazards that should have been obvious to engineers capable of preparing a PSSR review. Those included the accumulation of aluminum dust, the fact that the TSA process was not confined to an isolated booth, inadequate ventilation and electrical sources of ignition around the process.
[43] I have taken note of Balbaa’s concluding remarks as set out below:
• It is my opinion that CF Engineering entered this contract with little or no knowledge of the Regulations and standards to which the Aluminum Thermal Spray operation should comply with, to ensure a hazard free environment.
• Their first sign should have been the fact that the process was not isolated from other operations and as required by Ontario Regulations and NFPA 33, the spray application should have been confined to spray booths, spray rooms or spray areas as defined in the standard.
• With imminent signs of hazards, they took more than 7 months, without addressing and mitigating these hazards, except for the fact that they retained another company to redesign the ventilation system. It is important to note that I could not find any calculations from their part to indicate the need for upgrades in the ventilation system.
• It is my opinion that had CF Engineering understood and acted on mitigating the process hazards, the explosion on October 25, 2014 would not have occurred.
Position of Collins Frazer (The Moving Party)
[44] Counsel for the engineering firm makes a simple and straightforward argument. It addresses the cause of action in negligence and contract. A plaintiff must prove that its damages were caused by the breach of the standard of care by the defendant. This analysis centres on causation. Counsel offers the authority of Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, 2 SCR 114 (“Mustapha”).
[45] In Mustapha, Chief Justice McLachlin found that it was not reasonably foreseeable that a person of ordinary fortitude would suffer serious injury from seeing flies in a bottle of water: Mustapha, at para. 18.
[46] McLachlin C.J. found that in that case there was “no inconsistency in principle or outcome between negligence and contract law.” Damages of the nature claimed by Mustapha could not have been reasonably contemplated by the contracting parties: Mustapha, at para. 19.
[47] Counsel for Collins Frazer argues that since there is agreement between the parties that his client did not cause the explosion, and rather that the explosion started in the dust collector owned by Veolia, then there can be no damages collected from Collins Frazer and accordingly, there is no genuine issue for trial.
Position of Veolia
[48] Counsel for Veolia suggests that there are in fact seven triable issues in the action, any one of which should see the proceeding move on to trial. Those issues are both in negligence and in contract:
(a) There is an incomplete record before the court, and several material witnesses have not provided evidence;
(b) CF Engineering was, at all material times, aware of the hazards in the Veolia TSA Process;
(c) CF Engineering did not have, nor did it consult, the Professional Engineers of Ontario’s PSSR Guide, the published standard for PSSRs for Ontario Engineers;
(d) CF Engineering did not have, nor did it consult, the Ontario Ministry of Labour’s PSSR Guide, the published guide for PSSRs;
(e) CF Engineering failed to warn Veolia and to stop the TSA process;
(f) CF Engineering did not start or complete its mandate; and
(g) Veolia is entitled to recover its costs as damages for pure economic loss.
[49] While I agree that this motion must be dismissed, I will concentrate only on those issues which I find make it clear that a trial is necessary.
Legislative Duty and Standard of Care
[50] Section 7 of the OHSA: Industrial Establishments directs that a Pre-Start Health and Safety Review must be conducted where:
| Item | Circumstances | Applicable provisions of this Regulation | Exemptions |
|---|---|---|---|
| 4. | A process involves a risk of ignition or explosion that creates a condition of imminent hazard to a person’s health or safety. | Section 63 | The process is conducted inside a spray booth that has been manufactured and installed in accordance with current applicable standards. |
| 5. | The use of a dust collector involves a risk of ignition or explosion that creates a condition of imminent hazard to a person’s health or safety. | Section 65 | None. |
[51] Both of the circumstances noted in the chart above apply to this Veolia site and were the reason for the MOL directive. Section 7 requires the PSSR to be conducted by a professional engineer with the expertise to appropriately assess the related hazards. A report is to be made in writing to the owner bearing a seal consistent with the requirements of the Professional Engineers Act, R.S.O. 1990, c. P. 28. The report is to detail the measures taken for compliance, structural adequacy and the testing done to ensure the health and safety of the workers.
[52] The Professional Engineers Act sets out the legislative standard of care for Ontario engineers. Collins Frazer must meet that standard. Portions of Regulation 941 of the Act, set out below, define negligence and professional misconduct:
- (1) In this section,
“negligence” means an act or an omission in the carrying out of the work of a practitioner that constitutes a failure to maintain the standards that a reasonable and prudent practitioner would maintain in the circumstances. R.R.O. 1990, Reg. 941, s. 72 (1); O. Reg. 657/00, s. 1 (1).
(2) For the purposes of the Act and this Regulation,
“professional misconduct” means,
(a) negligence,
(b) failure to make reasonable provision for the safeguarding of life, health or property of a person who may be affected by the work for which the practitioner is responsible,
(c) failure to act to correct or report a situation that the practitioner believes may endanger the safety or the welfare of the public,
(d) failure to make responsible provision for complying with applicable statutes, regulations, standards, codes, by-laws and rules in connection with work being undertaken by or under the responsibility of the practitioner,
(f) failure of a practitioner to present clearly to the practitioner's employer the consequences to be expected from a deviation proposed in work, if the professional engineering judgment of the practitioner is overruled by non-technical authority in cases where the practitioner is responsible for the technical adequacy of professional engineering work,
[53] Consistent with the chronology set out earlier, the MOL’s site visit and field visit report took place on November 20, 2013. The report identifies the need to conduct a PSSR as a result of the TSA process being conducted at this Veolia location. A PSSR review is legislatively required to protect the health and safety of the employees.
[54] There can be no doubt that Collins Frazer was engaged by Veolia as a result of this field visit report, and no doubt that the defendant engineering firm was aware of that. The focus of Collins Frazer was to ensure a safe work environment and to satisfy the concerns of the MOL. The firm and its principals knew that this required a completed and reported PSSR.
[55] On February 5, 2014, Ferrara confirmed as part of the firm’s proposed initial investigation as Phase 1 that Collins Frazer would ascertain base PSSR requirements while interacting with the MOL and undertaking a site review of the TSA process including the existing facility.
[56] On August 6, 2014, Ferrera notified Lavoratore that the site review had been completed, yet no one from Collins Frazer had seen the TSA process in operation. At that time, Ferrera also identified the need for exhaust fans and concerns about electrical ignition sources.
[57] It is not until Thomas Collins attended the site on October 15, 2014, that anyone from the engineering firm saw the active TSA process.
[58] It is clear that on October 16, 2014, Thomas Collins advised Lavoratore about his concern regarding the dust accumulation, lack of plant cleanliness and the need to seal the electrical room. Lavoratore acted upon this concern. There was not, however, any follow-up by Thomas Collins, and in particular no evidence that this concern was expressed in writing. I have no evidence whatsoever of a warning by anyone at Collins Frazer of the imminent danger the accumulating aluminum dust posed in this environment.
[59] It seems clear that by the fall of 2014, Ferrera was on a path to design and implement major changes to the plant, which would include a much more efficient ventilation system and the segregation of the molten TSA process away from electrical ignition sources. Rough estimates in the materials suggest a cost of $400,000.
[60] However, in launching themselves into this extensive redesign, it could be found that Ferrera and Collins Frazer lost sight of their initial retainer. They knew that Veolia was still conducting the TSA process. They had identified the dangers. Thomas Collins, the electrical engineer, admitted at his discovery:
Q. Okay. So as of October 16th, 2014 you knew that there were hazards associated with the TSA process as it was going underway at Veolia?
A. Yeah, well I think I knew there were hazards involving, in the process from day one, but I witnessed just how badly the collector worked that day. And as I stressed that day I mean I was, I was concerned about ignition - - as an electrical engineer you’re an electrician, so, you know…
[61] They were not even close to providing the required PSSR, now almost a year after the MOL field visit report and seven months after they were retained by Veolia, consistent with the March 10, 2014 purchase order.
[62] I find that there is a triable issue as to whether Collins Frazer breached its legislative standard of care in failing to “maintain the standards that a reasonable and prudent practitioner would maintain in the circumstances”: Professional Engineers Act, R.R.O. 1990, Reg. 941, s. 72(1).
[63] The defendant had a duty to correct or report a situation that they believed might endanger the public and to make reasonable provisions for safeguarding the employees who were affected by the work for which they were responsible. A failure to do so would amount to “professional misconduct” as defined by the Professional Engineers Act and the regulation cited above.
Duty to Warn
[64] Beyond the legislative duty of care, there is the common law “duty to warn”. In Canadian Natural Resources Limited v. Wood Group Mustang (Canada) Inc. (IMV Projects Inc.), 2017 ABQB 106, the Alberta Court of Queen’s Bench found that the engineering firm had a duty to warn the plaintiff about the risks apparent in the design of a high temperature pipeline. At trial, the firm was apportioned 20 percent of the damages as a result of the pipeline failure. The negligence of the engineers and the damages assessed were affirmed by the Alberta Court of Appeal: 2018 ABCA 305, leave to appeal to SCC refused, 38396 (May 23, 2019) .
[65] In Surrey (Dist.) v. Carroll-Hatch & Associates Ltd. (1979), 1979 CanLII 617 (BC CA), 101 D.L.R. (3d) 218 (B.C.C.A.) a retained engineering firm was found responsible for repair costs as a result of its failure to warn the owner of inadequate soil tests before construction.
[66] The responsibility of a professional engineer is discussed in the “Professional Engineers of Ontario Engineering Practice Guidelines” (2017 August), Professional Engineers Ontario at p. 11:
Sometimes professional engineers find their advice is not accepted and that the client or employer has no intention of correcting the situation. If the engineer firmly believes that, after exhausting all internal resources, the health and safety of any person is being, or is imminently, endangered, it may be necessary to report these concerns to some external authority, such as a designated regulatory body, a government ministry or ombudsperson….
[67] There is evidence available to support a finding that a duty to warn Veolia was established in these circumstances. Once established, the Court of Appeal in Buchan v. Ortho Pharmaceutical (Canada) Ltd. (1986), 1986 CanLII 114 (ON CA), 54 O.R. (2d) 92 (O.N.C.A.) described the sufficiency of the warning at p. 10:
Once a duty to warn is recognized, it is manifest that the warning must be adequate. It should be communicated clearly and understandably in a manner calculated to inform the user of the nature of the risk and the extent of the danger; it should be in terms commensurate with the gravity of the potential hazard, and it should not be neutralized or negated by collateral efforts on the part of the manufacturer. The nature and extent of any given warning will depend on what is reasonable having regard to all the facts and circumstances relevant to the product in question.
[68] Justice Austin, in her discussion of the October 16, 2014 meeting, finds no dire warning by Thomas Collins, and further found: “Although advice was given by Mr. Collins to [sic] Mr. Lavoratore to clean the shop and seal off the electrical room, there was no other guidance provided and there was evidence that Mr. Lavoratore took steps to follow rather than ignore the advice”: Reasons for Judgment, Austin J., January 15, 2018 at p. 34.
Contract
[69] With respect to the claim in contract there is evidence that, despite the claim by Ferrera in the August 6, 2014 communication that the site review had been completed, they were no closer to producing a PSSR report for which they were initially engaged. In fact, it was two months later that the TSA process was even viewed by anyone from Collins Frazer. Justice Austin, in her reasons produced above, found that the contractual obligations of Collins-Ferrera remained in place, but that the engineering firm made a unilateral decision to abandon the preliminary review regarding safety issues. There is a triable issue regarding breach of contract.
Causation
[70] Counsel for Collins Frazer argues that even if there is a breach of the standard of care by the engineering firm, the defendant did not cause the explosion. It cannot be held liable for damages.
[71] I do not find the authority in Mustapha assists the defendant here. The explosion caused by the ignition of the aluminum dust was not only foreseeable, it was clearly foreseen by the electrical engineer Thomas Collins, and as well as by Ferrera, who offered an extensive renovation of the plant to isolate the process and properly ventilate the dust.
[72] Counsel for the defendant argues that Collins Frazer did not have the authority to issue a “stop work” order, and that such a power lay only with Veolia and the MOL. While that is true, it misses the point. As professional engineers, after recognizing the imminent danger, they pushed forward with a plan for a major renovation knowing the TSA process continued. There is no evidence that anyone from Collins Frazer warned of the gravity of the danger present. Clearly Veolia and/or the MOL should have stopped the process, but that does not mean that Collins Frazer necessarily escapes liability or damages.
[73] In Rivtow Marine Ltd. v. Washington Iron Works, 1973 CanLII 6 (SCC), [1974] S.C.R. 1189, the Supreme Court of Canada considered whether a log barge company could collect damages from the installer of cranes on its barges, after it became clear that the barges had to be removed from service to allow for the repair of cracks in the cranes. It was clear that the installer had been aware for some time of the defective design of the cranes which led to cracking. The installer had not designed the cranes. The Court held that there had been a breach of the installer’s duty to warn the barge owner of the defect in the cranes, and as a result, negligence was found, and the economic loss of business revenue could be recovered from the installer.
[74] While Collins Frazer did not cause the explosion which lead to the tragic loss of life and injuries to Veolia’s employees, there is a line of authorities that support the notion that it could still be held responsible for the subsequent economic loss sought in this action.
[75] In addition to the cases noted above, I believe a viable argument can be made as to causation, drawing on the line of cases which include Clements v. Clements, 2012 SCC 32, 2 S.C.R. 181 and Donleavy v. Ultramar Ltd., 2019 ONCA 687. Those cases discuss the “but for” test for causation and extend a causal connection in negligence cases in narrow circumstances to conduct that does not actually cause the tortious harm but materially contributes to the risk of that harm occurring: R. v. Doering, 2022 ONCA 559 at para. 143.
[76] In Donleavy, the Court of Appeal considered damages for an oil spill. The defendant, Ultramar supplied fuel oil to a tank at the plaintiff’s home. The trial judge found that Ultramar failed in its duty to inspect the tank before the oil supply commenced. The Court of Appeal, however, found that since the cause of the spill was ascertainable, the tank was unfit for outdoor installation, and the “but for” test for causation had to be applied. Justice van Rensburg stated at para. 73 of Donleavy:
Accordingly, even in a case where there are multiple tortfeasors, the “but for” test presumptively will apply. In the case of a negligent omission, as in the present case, the application of the “but for” test requires the trier of fact “to attend to the fact situation as it existed in reality the moment before the defendant’s breach of the standard of care, and then to imagine that the defendant took the action the standard of care obliged [it] to take, in order to determine whether [its] doing so would have prevented or reduced the injury”: Sacks, at para. 46. The “but for” causation question in respect of each appellant, is whether, if that party had discharged its duty to the respondents, and had not been negligent, the oil spill would have been prevented.
[77] I conclude that the discussion of causation noted above as it applies to the facts here defeats the argument of the defendant that the action can be dismissed for an obvious lack of causal connection.
Conclusion
[78] Considering r. 20.04(2)(a) of the Rules, I find that there are genuine issues requiring a trial with respect to this claim. Those issues can only be resolved by a full trial allowing for the exploration of all events leading up to the explosion and the related credibility findings by the triers of fact.
[79] As a result, I dismiss the defendant’s motion to dismiss the action.
[80] On the issue of costs: If costs cannot be resolved by the parties, I will receive written submissions of no more than five pages, excluding the bill of costs. The plaintiff’s submissions are to be submitted within 30 days of the release of these reasons and the defendant’s within 15 days thereafter. If no submissions are received consistent with this timeline, there will be no order as to costs.
Regional Senior Justice B. G. Thomas
Released: September 7, 2022.
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
VEOLIA ES CANADA INDUSTRIAL SREVICES INC.
Plaintiff
– and –
COLLINS FRAZER ENGINEERING INC.
Defendant
REASONS FOR JUDGMENT
Thomas, RSJ.
Released: September 7, 2022.