Bower v Evans, 2016 ABQB 286

Court of Queen ’ s Bench of Alberta Citation: Bower v Evans, 2016 ABQB 286 Date: 20160519 Docket: 1503 04672 Registry: Edmonton Between: Sheldon Bower Plaintiff - and - Frances Evans and Ruth Evans Defendants _______________________________________________________ Reasons for Judgment of W. S. Schlosser , Master in Chambers _______________________________________________________ [ 1 ] This is the Defendants’ application for

summary judgment. The lawsuit is about an industrial accident. Two employees were steam-cleaning an oil tank. The tank exploded. One worker was killed. The other, (the Plaintiff), was seriously injured. [ 2 ] The Defendants are directors of 479215 Alberta Ltd. The numbered company operated the shop where the accident happened.

[3] Paragraphs 5 and 6 of the Statement of Claim allege: 5. The Accident was caused by the negligence of the Defendants, jointly and severally, who, while acting as directors of 479215owed a personal duty of care to Mr. Bower, some particulars of the negligence of the Defendants include, but are not limited to thefollowing:

a) Knew or ought to have known of serious and avoidable or reducible danger to Mr. Bower in relation to 479215’s operations;

b) Had the authority to envision, establish and enforce corporate policies which could reasonably avoid or reduce such seriousdanger; and

c) Could have reasonably envisioned, established and enforced the actions necessary to carry out such policies and procedures and toreasonably avoid or reduce such serious danger. 6. The Defendants were jointly and severally negligent and breached their duties to envision, establish and enforce proper safetypolicies for 479215 and their employees, . . . [4] The Pleading goes on to list the particulars of negligence. The defendants say there is no duty and, therefore, no basis for theclaim List of Authorities: 1) By the Applicant: 1.

Encana Corp v ARC Resources Ltd. 2011 ABQB 431; 2. 732311 Alberta Ltd. v Paradise Bay Spa & Tub Warehouse Inc., 2003 ABQB 228; 3. Transportation Lease Systems v Weaver, 2007 ABQB 246; 4. Condominium Corporation No. 0321365 v 970365 Alberta Ltd., 2012 ABCA 26; 5. Papaschase Indian Band No. 136 v Canada (Attorney General), 2008 SCC 14; 6. Hryniak v Mauldin [Combined Air Mechanical Services Inc. v. Flesch], 2014 SCC 7 , 2014 SCC7; 7. Windsor v Canadian Pacific Railway, 2014 ABCA 108; 8. AT Films Inc. v AT Plastics Inc.,2014 ABQB 422; 9. WP v Alberta, 2014 ABCA 404; 10.

Harding v Hudsons Canadian Hospitality Ltd., 2015 ABQB 38 11. Stewart v Enterprise Universal Inc., 2010 ABQB 259; 12. Petrobank Energy & Resources Ltd. v Safety Boss Ltd., 2012 ABQB 161 13. Rai v 1294477 Alberta Ltd., 2015 ABQB 349 2) By the Respondents: 1. Access Mortgage Corporation

(2004) Limited v Arres Capital, 2014 ABCA; 2. Can v Cagary (Police Service), 2014 ABCA 322; 3. Windsor v Canadian Pacific Railway, 2014 ABCA 108; 4. First Calgary Holdings (Alb) Corp. v. Metropolitan Ventures Inc., 2015 Carswell Alta 108; 5. Baywood Homes Partnership v Haditaghi, 2014 ONCA 450 ; 6. Kassian v. The Attorney General of Canada, 2014 ONSC 844 ; 7. CBC v Isport Media, 2014 ONSC 1905 ; 8. Garry v George, 2001 ABQB 727 ; 9. Arabi v Alberta, 2014 ABQB 295 ; 10. N. (

D) v Oak Bay (District), 2005 CarswellBC 2469; 11. Roy v Doucet, 2005 NBCA 84 ;

12. Brae Centre Ltd. v 1044807 Alberta Ltd., 2008 ABCA 397 ; 13. Hall-Chem Inc. v Vulcan Packaging Inc., (1994) 12 B.L.R. (2d) 274 (Ont. Gen. Div.); 14. Tracy v Instaloans Financial Solution Centres (B.C.) Ltd.,2008 BCSC 669 ; 15. American Reserve Energy Corp v McDorman, (NL SCTD); 16. Tracy (Representative ad litem of) v Instaloans Financial Solution Centres (B.C.) Ltd., 2009 BCCA 110 ; 17. Michawl King v Geoffrey Dawe, 2011 ONSC 6842 ; 18. Troost v Ewanchuk, 2002 ABPC 140 ; 19. Kosmopoulos v Constitution Insurance Co., [1987] 1 SCR 2, SCC); 20.

Morgan v Saskatchewan, Hardy and Binkley, (SK CA). 3) By the Court: Nielsen Estate v Epton, 2006 ABCA 382, 45 CCLT (3rd) 31; affirming 2006 ABQB 21 per Watson, J., now JA. Analysis [5] The defendants’ position is that Frances and Ruth Evans are directors and shareholders in name only. They didn’t knowanything and they didn’t do anything – at least anything of substance – with respect to running the company. Their husbands ran it.

Theymerely did what they were told. [6] In technical terms, the argument is that misfeasance is actionable: nonfeasance is not; (‘mr. feasance’ - or blaming it on yourhusband - is not a defence). The defendants argue that before there can be liability there has to be an overt act, tortious in itself. Andthere wasn’t one. [7] The defendants were examined on their affidavits. They are the sole directors and sole owners of the company. They bothdrew income from it by way of a salary or dividends.

They minimized any involvement they had with the company, beyond merelyclerical or administrative duties. [8] The plaintiff puts credibility directly in issue, contradicting the defendants’ attestation of non-involvement in detailedaffidavit. [9] But for the credibility issue, the ‘no duty’ defence might have worked, had it not been for the Epton case.

Speakinggenerally, the Court of Appeal held: [20] It is settled law that a corporate director may have a personal duty of care and may be liable for acts that are in themselves tortious: Montreal Trust Co. of Canada v ScotiaMcLeod Inc (1995), (ON CA), 129 D.L.R. (4th) 711, 26 O.R. (3d)481 (C.A.); Blacklaws v 470433 Alberta Ltd. (2000), 84 Alta. L.R. (3d) 270, 2000 ABCA 175 . [10] In that case the personal duty of the director consisted of an obligation to oversee workplace safety and to put policydirectives into place.

The Court found: [14] The trial judge held that, in order for a director to be liable, there had to be proof of a personal duty of care and a personal breachof the relevant standard of care with causative effect.

Referring to various statutes as evidence of a duty of care, he concluded thatlegislation: embodies a duty on the part of the directors to take such measures as are reasonably within their capacity to ensure that where thecorporations employ others in hazardous activities, the directors will in good faith establish corporate policies that are reasonablyoriented towards the corporation [meeting] its legal requirements as to worker safety and public safety: 2006 ABQB 21 atpara. 570. [15] The trial judge found that whatever the standard of care was, it would not be met by a director blindly delegating everything as tosafety to others without any standards, supervision or guidance.

He concluded that Epton should have taken precautions to reduce oravoid the foreseeable harm. He found Epton breached the standard of care by failing to provide policies and working conditions thatwould ensure a safe working environment for the workers. (emphasis added) This part of the trial decision was affirmed. [11] The Applicant argues: While it may be that the facts in this case, if proven, would suggest liability on the Company for failing to take additional safetyprecautions, that failure does not equate to personal liability upon the Directors. [12] The Epton case suggests otherwise.

[ 13 ] I acknowledge that the Epton case was partly fact-driven but, at the very least, it establishes a duty on the defendants with respect to health and safety in the workplace. It remains to be seen whether liability will be established on the facts, but the defendants’ own evidence that they did nothing would seem to take the plaintiff most of the way there. To put it mildly, the defendants’ position is hardly unassailable on the record before the Court. Disposition [ 14 ] The application is dismissed.

Despite the failure of either side to mention the Epton case, the plaintiff is entitled to his costs payable forthwith and in any event of the cause. Heard on the 18 th day of February, 2016. Dated at the City of Edmonton, Alberta this 19 th day of May, 2016. W. S. Schlosser M.C.C.Q.B.A. Appearances: Doug Skovberg Skovberg Hinz for the Plaintiff/Respondents Nanette Kufeldt and Kunal Nand Chomicki Baril Mah LLP for the Defendants/Applicants