Nielsen Estate et al. v. Epton et al., 2006 ABQB 21

• Judge: Watson, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: January 06, 2006
• Citations: 2006 ABQB 21;(2006), 392 A.R. 81 (QB)

Nielsen Estate v. Epton (2006), 392 A.R. 81 (QB)

MLB headnote and full text

Temp. Cite: [2006] A.R. TBEd. JA.069

Rita Nielsen, Administratrix of the Estate of Gert Bo Nielsen, Rita Nielsen, Shane Nielsen, Thomas Soemod, Kim Nielsen and Joshua Nielsen, an infant by his next friend, Rita Nielsen (plaintiffs) v. Keith Epton and Fred Korby (defendants)

(9803-21798; 2006 ABQB 21)

Indexed As: Nielsen Estate et al. v. Epton et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Watson, J.

January 6, 2006.

Summary:

A worker died when a "live load" fell on him during an unsafe lifting procedure in a building fabrication plant. Workmen were attempting to flip over an assembled roof unit with a crane, forklift and the workmen standing under the roof using two by fours. The plant was managed by Epton, who was a director and part owner. There was no safety equipment, safety training and no written safety procedures at the plant. Profit allegedly trumped safety at Epton's direction. The worker's family sued Epton for negligence, alleging that he was personally liable, as a director, for misfeasance in developing, maintaining and permitting a dangerous work environment. At issue was whether Epton, in his capacity as director, could be found personally liable in tort and, if so, whether others shared that fault.

The Alberta Court of Queen's Bench held that Epton, in his capacity as director, owed a personal duty of care to his employees. Epton fundamentally breached that duty by creating and maintaining corporate policy which predictably sustained dangerous working conditions. The dangerous work environment was a direct product of Epton's decisions, actions and omissions. The court apportioned fault as follows: Smith, the person who designed the lifting beam used (1%); Atwood, the crane operator (10%); Edworthy (the employee in charge of the lift, 39%); and Epton (50%). The company was vicariously liable for the acts or omissions of the others found at fault and Epton was vicariously liable for the fault of Atwood and Edworthy. Effectively, Epton was found 99% at fault.

Company Law - Topic 4183

Directors - Liability of directors - For torts - A worker died when a "live load" fell on him during an unsafe lifting procedure in a building fabrication plant - Workmen were attempting to flip over an assembled roof unit with a crane, forklift and the workmen standing under the roof using two by fours - The plant was managed by Epton, who was a director and part owner - There was no safety equipment, safety training and no written safety procedures at the plant - Profit allegedly trumped safety at Epton's direction - The worker's family sued Epton for negligence, alleging that he was personally liable, as a director, for misfeasance in developing, maintaining and permitting a dangerous work environment - The Alberta Court of Queen's Bench held that Epton, in his capacity as director, owed a personal duty of care to his employees - Epton fundamentally breached that duty by creating and maintaining corporate policy which predictably sustained dangerous working conditions - The dangerous work environment was a direct product of Epton's decisions, actions and omissions.

Company Law - Topic 4183

Directors - Liability of directors - For torts - At issue was a director's liability for management failings respecting workplace safety - The Alberta Court of Queen's Bench stated that "I am persuaded that a personal duty of care of corporation directors towards corporation employees should be found in circumstances where (1) the director has or ought to have personal factual awareness of serious and avoidable or reducible danger to which the corporation's employees are exposed in relation to corporation-related activities, (2) it is within the authority of the director to envision, establish and enforce corporate policies which could reasonably avoid or reduce such serious danger and (3) it is within the reasonable capacity of the director to envision, establish and enforce the actions necessary to carry out such policies and to reasonably avoid or reduce such serious danger. This obligation falls to the director personally because all the characteristics giving rise to the duty of care by the director are personal, not vicarious. The obligation is realistic to impose on the directors because the danger must be serious, by which I mean to say that it foreseeably threatens life, limb or psychological health, not that transitory or trifling perils await." - See paragraph 573 to 574.

Evidence - Topic 4688

Witnesses - Examination - Testimonial recollection or refreshing witness's memory - Past recorded recollection - A witness was unable to answer a question respecting an incident nine years earlier based on memory - However, the witness answered the question by refreshing his memory with a written statement given at the time - The witness asserted that the statement was accurate when given and that he read it over and signed it - The actual statement was not introduced into evidence, but was paraphrased by the witness - The Alberta Court of Queen's Bench held that the "paraphrase" was not admissible as a "past recollection recorded" - See paragraphs 147 to 152.

Torts - Topic 77

Negligence - Duty of care - Relationship required to raise duty of care - [See second Company Law - Topic 4183 ].

Torts - Topic 77

Negligence - Duty of care - Relationship required to raise duty of care - The Alberta Court of Queen's Bench stated that "in order to establish that a defendant owes a plaintiff a duty of care, the reasonable foreseeability of harm must be supplemented by proximity. It is only if harm is a reasonably foreseeable consequence of the conduct in question and there is a sufficient degree of proximity between the parties that a prima facie duty of care is established. In essence, proximity looks at the nature of that relationship in order to determine whether it would be just and fair to impose a duty of care on the defendant. Public policy considerations may yet over-ride the legal effect of such proximity in the later aspects of the analysis ... There may be circumstances where even if it would be just and fair to recognize the duty of care, the enforcement of the duty of care may involve too much collateral damage to significant social values outweighing the objectives of enforcement. Policy concerns about indeterminate liability ... are, in my view, answered in part here by the stipulation that the danger in question must be serious, i.e. to life or limb or psychological health, and not just to transitory or trivial risks, or risks which are the common lot of humankind and bear no particular relationship to corporation-actuated activities. The category of plaintiffs is predictable, and the category of potential harm is manageable by reasonable steps. Policy concerns about indeterminate liability are, in my view, also answered in part by the fact that to the degree the directors face liability for their corporate management failings of this type, they have the option of insurance through the Workers Compensation Act system, or perhaps liability insurance otherwise." - See paragraphs 576 to 581.

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Rich (Marc) & Co. AG et al. v. Bishop Rock Marine Co. et al., [1996] A.C. 211; 185 N.R. 265; [1995] 3 W.L.R. 227; [1995] 3 All E.R. 307; [1995] 2 Lloyd's Rep. 299 (H.L.), refd to. [para. 552, footnote 81].

Murray v. Lindsay and Southern Electric Ltd. (1995), 146 N.S.R.(2d) 234; 422 A.P.R. 234; 1995 CarswellNS 215 (S.C.), refd to. [para. 553, footnote 82].

Hedley Byrne & Co. v. Heller & Partners Ltd., [1964] A.C. 465 (H.L.), refd to. [para. 555, footnote 83].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241; 35 C.C.L.T.(2d) 115; 31 B.L.R.(2d) 147; [1997] 8 W.W.R. 80; 1997 CarswellMan 198, refd to. [para. 555, footnote 84].

Castillo v. Castillo (2005), 343 N.R. 144; 376 A.R. 224; 360 W.A.C. 224; 2005 CarswellAlta 1887; 2005 SCC 83, affing. [2004] 9 W.W.R. 609; 357 A.R. 288; 334 W.A.C. 288; 30 Alta. L.R.(4th) 67; 1 C.P.C.(6th) 82; 6 M.V.R.(5th) 1; 244 D.L.R.(4th) 603; 2004 CarswellAlta 908; 2004 ABCA 158, refd to. [para. 559, footnote 85].

Bow Valley Husky (Bermuda) Ltd. et al. v. Saint John Shipbuilding Ltd. et al., [1997] 3 S.C.R. 1210; 221 N.R. 1; 158 Nfld. & P.E.I.R. 269; 490 A.P.R. 269; 153 D.L.R.(4th) 385; 48 C.C.L.I.(2d) 1; 37 B.L.R.(2d) 1; 40 C.C.L.T.(2d) 235; 1999 A.M.C. 108; 1997 CarswellNfld 207, refd to. [para. 560, footnote 86].

Watkins v. Olafson et al., [1989] 2 S.C.R. 750; 100 N.R. 161; 61 Man.R.(2d) 81; 61 D.L.R.(4th) 577; [1989] 6 W.W.R. 481; 39 B.C.L.R.(2d) 294; 1989 CarswellMan 1, refd to. [para. 560, footnote 87].

M'Alister v. Stevenson - see Donoghue v. Stevenson.

Donoghue v. Stevenson, [1932] A.C. 562 (H.L.), refd to. [para. 560, footnote 88].

Elliott v. Insurance Crime Prevention Bureau et al. (2005), 236 N.S.R.(2d) 104; 749 A.P.R. 104; 26 C.C.L.I.(4th) 1; 256 D.L.R.(4th) 674; 2005 CarswellNS 353; 2005 NSCA 115, refd to. [para. 577, footnote 90].

Canadian National Railway Co. et al. v. Norsk Pacific Steamship Co. and Tug Jervis Crown et al., [1992] 1 S.C.R. 1021; 137 N.R. 241; 91 D.L.R.(4th) 289; 11 C.C.L.T.(2d) 1; [1991] R.R.A. 370; 1992 CarswellNat 168, refd to. [para. 579, footnote 91].

Ultramares Corp. v. Touche, Tiven & Co. (1931), 255 N.Y. 170; 174 N.E. 441 (C.A.), refd to. [para. 580, footnote 92].

Hill et al. v. Hamilton-Wentworth Regional Police Services Board et al. (2005), 202 O.A.C. 310; 2005 CarswellOnt 4589 (C.A.), affing. [2003] O.T.C. 807; 66 O.R.(3d) 746; 2003 CarswellOnt 3369, refd to. [para. 582, footnote 93].

ADGA Systems International Ltd. v. Valcom Ltd. et al. (1999), 117 O.A.C. 39; 43 O.R.(3d) 101; 44 C.C.L.T.(2d) 174; 39 C.C.E.L.(2d) 163; 168 D.L.R.(4th) 351; 41 B.L.R.(2d) 157; 1999 CarswellOnt 29 (C.A.), refd to. [para. 588, footnote 94].

WIC Premium Television Ltd. v. General Instrument Corp. et al., [2000] 2 W.W.R. 417; 243 A.R. 329; 73 Alta. L.R.(3d) 365; 1 C.P.R.(4th) 467; 1999 CarswellAlta 452; 1999 ABQB 805, refd to. [para. 592, footnote 95].

NBD Bank Canada v. Dofasco Inc. et al. (1999), 127 O.A.C. 338; 47 C.C.L.T.(2d) 213; 181 D.L.R.(4th) 37; 1 B.L.R.(3d) 1; 46 O.R.(3d) 514; 15 C.B.R.(4th) 67; 1999 CarswellOnt 4077 (C.A.), leave to appeal refused (2000), 254 N.R. 400; 135 O.A.C. 195; 2000 CarswellOnt 1164 (S.C.C.), refd to. [para. 593, footnote 96].

Hovsepian et al. v. Westfair Foods Ltd. et al., [2001] 10 W.W.R. 504; 296 A.R. 283; 17 B.L.R.(3d) 291; 95 Alta. L.R.(3d) 331; 2001 CarswellAlta 1113; 2001 ABQB 700, refd to. [para. 594, footnote 97].

Garry v. George et al., [2001] A.R. Uned. 286; 2001 ABQB 727 (Master), refd to. [para. 594, footnote 98].

Wenzel Downhole Tools Ltd. v. NQL Drilling Tools Inc. (2002), 29 B.L.R.(3d) 202; 2002 CarswellAlta 1387; 2002 ABQB 636, refd to. [para. 594, footnote 99].

916470 Alberta Ltd. v. Standard Life Assurance Co. et al. (2005), 364 A.R. 339; 7 B.L.R.(4th) 127; 2005 CarswellAlta 906; 137 A.C.W.S.(3d) 710 (Q.B. Master), refd to. [para. 594, footnote 100].

Morgan v. Saskatchewan et al. (1985), 43 Sask.R. 129; 31 B.L.R. 173; 1985 CarswellSask 51 (C.A.), refd to. [para. 595, footnote 101].

Sorrel 1985 Limited Partnership et al. v. Sorrel Resources Ltd. et al., [2001] 1 W.W.R. 93; 277 A.R. 1; 242 W.A.C. 1; 85 Alta. L.R.(3d) 27; 10 B.L.R.(3d) 61; 2000 CarswellAlta 1023; 2000 ABCA 256, dist. [para. 596, footnote 102].

Fontaine v. Loewen Estate, [1998] 1 S.C.R. 424; 223 N.R. 161; 103 B.C.A.C. 118; 169 W.A.C. 118; 156 D.L.R.(4th) 577; 46 B.C.L.R.(3d) 1; [1998] 7 W.W.R. 25; 34 M.V.R.(3d) 165; 41 C.C.L.T.(2d) 36; 1997 CarswellBC 2930, refd to. [para. 603, footnote 103].

Graham Barclay Oysters Pty. Ltd. et al. v. Ryan et al., [2002] HCA 54; 211 C.L.R. 540 (H.C.), refd to. [para. 605, footnote 104].

New South Wales v. Bijdoso, [2005] HCA 76 (H.C.), refd to. [para. 605, footnote 105].

Vancouver General Hospital et al. v. McDaniel et al., [1934] 4 D.L.R. 593; [1934] 3 W.W.R. 619; 1934 CarswellBC 78 (P.C.), refd to. [para. 612, footnote 107].

Lloyds Bank Ltd. v. Savory & Co., [1933] A.C. 201 (H.L.), refd to. [para. 613, footnote 108].

Crits et al. v. Sylvester et al. (1956), 1 D.L.R.(2d) 502; [1956] O.R. 132 (C.A.), affd. [1956] S.C.R. 991; 5 D.L.R.(2d) 601; 1956 CarswellOnt 84, refd to. [para. 613, footnote 109].

ter Neuzen v. Korn - see Neuzen v. Korn.

Neuzen v. Korn, [1995] 3 S.C.R. 674; 188 N.R. 161; 64 B.C.A.C. 241; 105 W.A.C. 241; 127 D.L.R.(4th) 577; 11 B.C.L.R.(3d) 201; [1995] 10 W.W.R. 1; 1995 CarswellBC 593, refd to. [para. 614, footnote 110].

Bennett v. Minister of Community Welfare et al., [1992] HCA 27; 176 C.L.R. 408 (H.C.), refd to. [para. 615, footnote 111].

Economy Foods & Hardware Ltd. v. Klassen et al. (2001), 153 Man.R.(2d) 136; 238 W.A.C. 136; 196 D.L.R.(4th) 413; 5 C.C.L.T.(3d) 12; [2001] 6 W.W.R. 104; 2001 CarswellMan 36; 2001 MBCA 16, refd to. [para. 620, footnote 112].

Plaisance v. Brink's Express Co. of Canada and Montreal (City), [1977] 1 S.C.R. 640; 9 N.R. 11; 1975 CarswellQue 55, refd to. [para. 621, footnote 113].

C.S. v. Miller et al., [2004] 5 W.W.R. 282; 358 A.R. 196; 22 C.C.L.T.(3d) 21; 26 Alta. L.R.(4th) 345; 2003 CarswellAlta 1901; 2004 ABQB 137, refd to. [para. 621, footnote 114].

Wadsworth v. Hayes et al., [1996] 3 W.W.R. 561; 178 A.R. 256; 110 W.A.C. 256; 36 Alta. L.R.(3d) 204; 132 D.L.R.(4th) 410 (C.A.), leave to appeal refused [1996] 9 W.W.R. xlvii; 205 N.R. 394; 193 A.R. 179; 135 W.A.C. 179; 41 Alta. L.R.(3d) xl; 42 Alta. L.R.(3d) xxii; 137 D.L.R.(4th) vii; 1996 CarswellAlta 1188 (S.C.C.), refd to. [para. 623, footnote 115].

Rayani v. Yule & Co. (Hong Kong) Ltd., [1996] 3 W.W.R. 574; 178 A.R. 231; 110 W.A.C. 231; 36 Alta. L.R.(3d) 217; 1996 CarswellAlta 491 (C.A.), refd to. [para. 623, footnote 116].

Raywalt Construction Co. v. Bencic et al. (2005), 386 A.R. 230 (Q.B.), refd to. [para. 628, footnote 117].

E.B. v. Order of the Oblates of Mary Immaculate (B.C.) et al. (2005), 340 N.R. 202; 217 B.C.A.C. 1; 358 W.A.C. 1; 2005 CarswellBC 2484; 2005 SCC 60, refd to. [para. 631, footnote 118].

Mooney v. British Columbia (Attorney General) et al., [2004] 10 W.W.R. 286; 202 B.C.A.C. 74; 331 W.A.C. 74; 25 C.C.L.T.(3d) 234; 31 B.C.L.R.(4th) 61; 2004 CarswellBC 1707 (C.A.), refd to. [para. 634, footnote 119].

Statutes Noticed:

Occupational Health and Safety Act, R.S.A. 1980, c. O-2, sect. 1(k)(iv) [para. 84]; sect. 2(1) [para. 81].

Workers' Compensation Act, S.A. 1981, c. W-16, sect. 12(1) [para. 6]; sect. 18(2) [para. 23]; sect. 149 [para. 10].

Authors and Works Noticed:

Flannigan, Robert, The Personal Tort Liability of Directors (2002), 81 Can. Bar Rev. 247, generally [para. 550, footnote 80].

Fridman, Gerald Henry Louis, The Law of Torts in Canada (2nd Ed. 2002), pp. 392 to 399 [para. 612, footnote 106].

Mah, Douglas, The Untold Story of WCB Subrogation (2005), 78 The Barrister 19, pp. 19 [para. 66, footnote 36]; 19 to 21 [para. 50, footnote 22]; 20 [para. 54, footnote 30].

Counsel:

Karin E. Buss and Dushan Bednarsky (Ackroyd, Piasta, Roth & Day LLP), for the plaintiffs;

Dennis L. Picco and Ward A. Hanson (Fraser Milner Casgrain LLP), for the defendants.

This action was heard on November 14 to 30 and December 2-5, 2005, before Watson, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following judgment on January 6, 2006.