Her Majesty the Queen - v. -, 2019 SKPC 54

IN THE PROVINCIAL COURT OF SASKATCHEWAN Citation: 2019 SKPC 54 Date: September 12, 2019 Information: 90215248 Location: Saskatoon _____________________________________________________________________________ Between: Her Majesty the Queen - and - Fire Sand Real Estate Ltd. Appearing: B. Rodgers For the Crown B. Mitchell For the Accused SENTENCE DECISION M.L.

GRAY , J [ 1 ] On March 21, 2019, the defendant company entered a guilty plea to the following charge: that on the 18 th day of August 2016 at Saskatoon, it did, being a prime contractor, fail to ensure that all activities at the required worksite that may affect the health and safety of workers or self-employed persons are coordinated, as required by

Section 5(

b) of the Occupational Health and Safety (Prime Contractor) Regulations , resulting in the serious injury of a worker, namely Randell Kaponyas, contrary to Sections 3-78(

g) and 3-79 of The Saskatchewan Employment Act . [ 2 ] The above-noted regulations came into effect on January 1, 2015; the Court was advised that this charge was the first under this legislation.

[ 3 ] Fire Sand Real Estate Ltd. [Fire Sand] has been a registered corporation since 2011 and owned the property on which the relevant job site was located. By virtue of sections 2 and 3(1) of Occupational Health and Safety (Prime Contractor) Regulations [ Regulations ], this was a “required worksite” that must have a prime contractor. Section 3(2) of the Regulations states: …the prime contractor is: (

a) the contractor, employer or other person who enters into a written agreement with the owner of the worksite to be the prime contractor; or (

b) if no agreement mentioned in clause (

a) has been made or is in force, the owner of the worksite. [ 4 ] Although the defendant corporation had contracted with Wright Construction to construct the building, their contract did not designate Wright Construction as the prime contractor. Thus, by virtue of section 3(1)(

b) of the Regulations , the defendant was the prime contractor, and responsible for the duties enumerated in

section 5 of the Regulations . It is on this basis that the defendant pled guilty. The Court was also advised that, subsequent to the workplace injury being sustained, the contract with Wright Construction was amended to name the construction company as the prime contractor. [ 5 ] On August 18, 2016, a number of trades were working on the Fire Sand construction site. Mr. Kirkup, a co-owner and then sole employee of the defendant, was present and working with the operator of an overhead crane in preparation for unloading a large piece of equipment described as a glass beveller or glass cutter. Mr.

Kaponyas, the injured worker, was a journeyman electrician who was using a scissor lift to install electrical wiring at or near the ceiling of the building. During sentencing submissions, Crown counsel alleged that the victim had repeatedly asked that the overhead crane be locked out and rendered immoveable but Mr. Kirkup refused. Defence counsel took issue with this submission and, as a result, sentencing submissions were adjourned so that evidence could be called on this point. [ 6 ] Mr. Kaponyas testified that when he arrived at the job site, he spoke to Mr.

Kirkup and advised that he would require the overhead crane to be locked out; in response, Mr. Kirkup told him that was not possible because they needed to do tests on the crane. Mr. Kaponyas then took approximately half an hour to prepare for the day’s work. He again approached Mr. Kirkup and asked that the crane be locked out. Again, he was told that it was not possible. They agreed that if the crane was going to move, the electricians who were going up in the two scissor lifts would be told. The two electricians worked their way along the building and, as they came nearer to the crane, Mr.

Kaponyas spoke to Mr. Kirkup again. On this third occasion, Mr. Kirkup said that he understood the concern and that he would tell the electricians if the crane was to move. It was after this conversation, while 25 feet up in the air, that Mr. Kaponyas heard the crane moving. He began lowering the scissor lift but did not get out of the way before the crane hit the top rail of the lift, into which he was secured, and toppled it. Mr. Kaponyas was seriously injured. [ 7 ] He also testified that he could have turned off the electrical source and locked the switch to ensure that it was not tripped.

He did not do so as he felt Mr. Kirkup was under pressure to get the job done. [ 8 ] In cross-examination, Mr. Kaponyas said that he had seven years electrical experience as an apprentice and journeyman and had been on the Fire Sand job site for about two weeks. Mr. Kirkup had been there for four days at the time of the incident and it was his belief that Mr. Kirkup was coordinating the trades. Prior to Mr. Kirkup’s arrival, he had been taking direction from Dennis Cole, a superintendent with Wright Construction who was coordinating the work. However, on August 18, 2016, it was Mr.

Kirkup who advised that the truck and equipment were coming in to be unloaded and indeed, it did arrive after the second request to have the crane locked out. Although Mr. Kaponyas could have shut off the electricity, he did not “want to ruffle feathers.” He believed that he and Mr. Kirkup had an understanding that the crane would not be moved without notice and he did not want to cut off the electricity after being told not to. [ 9 ] Mr. Kirkup testified that August 18 was his third day at the site and that he was Fire Sand’s contact on location.

The business is family owned by his parents, his two older brothers and him. They had never previously constructed a commercial building and, consequently, hired Wright Construction as that company had experience and a good reputation. Fire Sand also contracted with Prairie Crane in relation to the overhead crane but Mr. Cole, the Wright Construction superintendent, was responsible for their orientation to the site.

On August 16, inspectors discovered a flaw in the overhead crane and arrangements were made for repairs to be done early in the morning of August 18 before the glass cutter arrived and needed to be off-loaded. He saw the work site as busy, but not chaotic as described by Mr. Kaponyas. In his view, his job was to ensure that Mr. Cole knew what was happening on the site. He was satisfied that the employee from Prairie Crane was qualified to operate the crane, which was run by remote control. They discussed the plan for unloading the glass cutter and he assisted in getting out the straps and rigging. [ 10 ] Mr.

Kirkup admitted that Mr. Kaponyas asked to lock out the electrical system and that he told him that he could not. He agreed that he had a total of three such conversations with Mr. Kaponyas, but denied that there was any pressure. In the third conversation, Mr. Kaponyas was told that the crane would be moving and the horn would sound when it did. Mr. Kaponyas said that he would do what he had to do quickly. Mr. Kirkup expressed the view that those who were at risk were responsible for locking out the crane.

[ 11 ] After Mr. Kaponyas was injured, Mr. Cole of Wright Construction attended, locked out the overhead crane and directed everyone to remain on site. Mr. Kirkup testified that a three-week locking of that crane was “imposed on us” which meant that they had to hire a mobile glass lifting device. [ 12 ] Since this incident, Mr. Kirkup has completed a crane operating course and mandated a 16 hour training program as well as double safety checks for other employees. He asserted that their safety procedures now exceed industry standards.

Neither he nor anyone else on behalf of the company has contacted the victim on the advice of their legal counsel. He also testified that a fine of any amount will jeopardize the financial viability of the company which has yet to turn a profit. In fact, he says, the company is losing money and money must be injected on a monthly basis to keep 16 people employed. Mr. Kirkup refused to provide particulars, saying only that such information would give an advantage to their competitors.

The incident of August 18, 2016 has had financial implications for the company in that $25,000.00 of equipment had to be purchased and additional fees and costs were incurred. These were not specified. [ 13 ] In cross-examination, he acknowledged that this was the first building project in which he had been involved. He assumed that Wright Construction was the prime contractor but had taken no steps to confirm this belief. The installation of the glass beveller was a priority for him as he felt it was his responsibility to keep the project on schedule. He admitted that he knew what Mr.

Kaponyas’ concerns were and had told him that a horn would sound when the crane moved. He acknowledged that this provided only a few seconds warning. He reiterated his belief that a person’s safety was their own concern and responsibility. [ 14 ] Crown counsel submits that general deterrence must be given precedence in determining a fit sentence. Although this particular defendant does not have any prior convictions or any prior notices of contravention, their degree of responsibility was great.

Their failure to co-ordinate the trades increased the risk to those workers whose safety they were statute bound to protect. Although Prairie Crane also carried that responsibility, the overall responsibility fell to the defendant as the prime contractor. Prairie Crane entered a guilty plea and, on a joint submission, was sentenced to a fine of $80,000.00, inclusive of surcharge. With respect to the defendant, the Crown submits that a larger fine of $91,000.00 inclusive of surcharge would be appropriate given the higher degree of culpability.

In support of this submission, the Court was referred to R v Agri/Installations& Maintenance Corp. (Sept 28, 2018) (unreported). In that case a worker suffered neck and back injuries after being struck by a piece of falling sheet metal. A total fine of $80,000.00 was imposed. [ 15 ] Counsel for the defendant submits that a substantially lower fine would be appropriate given a number of mitigating factors. In particular, counsel points out that Mr. Kirkup had been on site for only three days before Mr. Kaponyas was injured.

Until that point, Wright Construction was responsible for compliance with the The Saskatchewan Employment Act , SS 2013 c. S-15 [ The Act ] and the Regulations . It was Mr. Kirkup’s belief, albeit a mistaken one, that Wright Construction was responsible. Further, Mr. Kirkup was not responsible for operating the crane and there was some degree of contributory negligence.

After reviewing the factors set out in R v Westfair Foods Ltd. , 2005 SKPC 26 , 263 Sask R 62 [ Westfair Foods ] counsel submitted that a fine in the range of $20-40,000.00 would be appropriate in the circumstances of this case and of this defendant. A fine commensurate with that imposed on Prairie Crane would be the absolute upper end of the range in counsel’s view. [ 16 ] The task left for the Court is to consider the circumstances of the offence and of the defendant, the law and the sentencing precedents in order to assess the appropriate penalty in this case.

In Westfair Foods Ltd ., Judge Whelan extensively reviewed the law of sentencing in relation to offences under what was then The Occupational Health and Safety Act , 1993 SS 1993 c. D-1.1 and set out a number of factors that ought to be considered.

At paragraph 38 of Westfair Foods , Judge Whelan observed: [38] Having regard to the approach taken in Cotton Felts, supra , and the emphasis upon deterrence as a sentencing factor in the decisions that I have discussed, the approach which best fits with my understanding of sentencing of regulatory offences, and pertaining most specifically to occupational health and safety regulation, might be expressed as follows: (

i) The primary objective of regulatory offences is protection and in the context of occupational health and safety legislation, it is the protection, in the workplace, of the employee and the general public. (ii) The sentencing principle which best achieves this objective is deterrence and while deterrence may be regarded in its broadest sense and includes specific deterrence, general deterrence is a paramount consideration. (iii) There are numerous factors, which may be taken into account and the weight attributed to each will depend upon the circumstances of each case. [ 17 ] Judge Whelan then enumerated a non-exhaustive list of factors that may be considered and are likely relevant to most occupational health and safety offences.

This Court considers the following to be applicable to the case at hand:

(

i) Size of the business Fire Sand is a relatively small, family-owned business that is part of a larger family-owned enterprise. In August 2016, Mr. Kirkup wasthe only employee of Fire Sand; they now have 16 employees. There is a certain degree of organizational sophistication to this company;it does not fall into the category of a “mom and pop” operation as described in R v J & D Sewer Services

(1984) Ltd., 2016 SKPC 125which employed two people in addition to the owner or R v Reimer 2012 SKPC 119 which consisted of one employee who subcontractedas necessary. As noted earlier, at the time of the offence, Mr. Kirkup was the only employee of the Fire Sand branch of the familybusiness; he and the company, in general, lacked experience in construction. (ii) Connection between profit and illegal action Although Mr. Kirkup denies that profit played a role on August 18, 2016, he does acknowledge that his priority that day was theinstallation of the glass beveller.

It is the conclusion of the Court that one of the main reasons for making installation of equipment apriority can only be about money—either to earn money sooner or to prevent extra expenditure that might be incurred by any delay. Mr.Kaponyas testified that the push was from Fire Sand, not Wright Construction, to get the lights and equipment installed. This testimonywas not shaken in cross-examination. Before the arrival of Mr. Kirkup, Mr. Kaponyas was of the belief that Wright Construction wasdiligent in maintaining safety standards. This was in contrast to Mr.

Kirkup who testified that his role on site was to keep the project “onschedule.” (iii) Gravity of the offence The Court considers the circumstances of this case to be very serious. Of course, the most egregious of occupational health and safetycases involve the loss of life. Here, Mr. Kaponyas sustained several serious injuries including a separated pelvis with multiple pelvicfractures, a severely broken arm and a head injury. Metal plates were used to mend the arm and head fractures. He was in hospital fortwo months and unable to walk. Rehabilitation was a long process and Mr.

Kaponyas still experiences physical and psychologicaleffects from his ordeal that have also rippled into and affected his family. (iv) Degree of risk, extent of danger and foreseeability It is clear from the evidence that the risk and foreseeability of that risk were patently clear to all involved. The proper procedure was toturn off the electrical source and ensure that the crane could not be moved. Mr. Kirkup acknowledged that he understood the concern ofMr. Kaponyas and undertook to provide a warning to him.

The extent of the danger was similarly obvious given the nature and size ofthe crane and the fact that the electricians were high above the ground. Particularly aggravating is that Mr. Kirkup, on three separateoccasions, refused requests by the injured worker to allow that worker to work safely and then subsequently did not provide an adequatewarning as promised. (

v) Maximum penalty prescribed by statute At para 19 of R v Cotton Felts Ltd. (1982), (ON CA), 2 CCC (3d) 287, the Ontario Court of Appeal made thisobservation: The Occupational Health and Safety Act is part of a large family of statutes creating what are known as public welfare offence. To a verylarge extent, the enforcement of such statutes is achieved by fines imposed on offending corporations.

The amount of the fine will bedetermined by a complex of considerations, including the size of the company involved, the scope of the economic activity in issue, theextent of the actual and potential harm to the public, and the maximum penalty prescribed by statute. Above all, the amount of the finewill be determined by the need to enforce regulatory standards by deterrence. In 2014, the maximum penalties available for offences relating to occupational health and safety (and other provincial statute offences)were increased.

Section 3-79 of The Saskatchewan Employment Act, SS 2013 c 5-15.1 now states:

(7) Subject to subsection (9), every person who is guilty of an offence mentioned in

section 3-78 that causes the death of or seriousinjury to a worker is liable on

summary conviction to a fine not exceeding $500,000.

(8) If an individual is convicted of an offence mentioned in subsection (7), the convicting judge may, in addition to imposing a fine,order the convicted individual be imprisoned for a term not exceeding two years.

(9) If a corporation is convicted of an offence mentioned in subsection (7), the convicting judge may order that the convictedcorporation pay a fine not exceeding $1,500,000 if the convicting judge is satisfied that it is appropriate to do so having regard to: (

a) the need to achieve general deterrence; (

b) the number of previous convictions imposed on the convicted corporation;

(

c) the number of previous notices of contraventions issued to, and the number of previous compliance undertakings entered into by, the convicted corporation; and (

d) the degree of responsibility of the convicted corporation, including considering the number of employees employed by the convicted corporation. The following is a

summary of a review of the discussions, as reported in Hansard, respecting these increases:

a) Fines were raised across a spectrum of offences in order to create a “fairly uniform range of fines.” Occupational health offences merited higher fines because they dealt with workers’ safety. (p 564 Hansard Verbatim Report No 24- May 10, 2013)

b) The significant increases in penalties were intended to complement various other measures implemented by the government to address work safety. (p 363 Hansard Verbatim Report No 17-April 24, 2013)

c) The amount of a fine imposed by the courts tends to vary depending upon the size of the employer. ( p 365 Hansard Verbatim Report No17-April 24, 2013)

d) Maximum fines have been raised to reflect the increase in the wealth and international nature of businesses in Saskatchewan while recognizing that fines must be appropriate and proportionate. (p 454-55 Hansard Verbatim Report No 20-May 2, 2013) Counsel for the defendant properly asserts that the mere increase in fines does not automatically signal that the courts should assess higher fines: see R v Carriere Forest Products Ltd. 2019 SKQB 84 affd 2019 SKQB 84 [ Carriere ] at para 34.

Based on the discussion reported in Hansard and Carriere , the Court accepts this premise; an appropriate and proportionate fine must be determined after weighing and considering all of the factors relevant to this particular offender in these particular circumstances. However, it is my view that the legislative changes increasing fines for a variety of offences was intended to reflect the passage of time since fines were last increased and to renew governmental efforts to address worker safety.

The end result would seem to be that the courts ultimately will assess higher fines after balancing all relevant factors. (vi) Range of fines and potential impact on the business Fines in occupational health and safety cases run the gamut as demonstrated by the cases tendered by counsel. Those cases show that between 2014 and 2018, after the legislated increases in penalties, fines ranging from $14,000.00 to $80,000.00 were imposed. Of all the sentencing cases referenced in sentencing, R v Prairie Crane (unreported) is the most comparable since it deals with the same set of circumstances.

However, the sentence in Prairie Crane was a joint submission and therefore, the Court does not have the benefit of the reasons leading to the imposition of that fine which was $80,000.00 inclusive of surcharge. There is evidence from Mr. Kirkup as to the dire financial state of the company; however, he was unwilling to provide particulars for fear of giving a competitor some advantage. He also testified that since the time of this offence the number of employees has increased to sixteen and monthly “injections” of cash are put into the corporation.

These statements are difficult to reconcile without further explanation, which Mr. Kirkup was unwilling to provide. Without that clarification, it is difficult to attach any significant weight to this factor.

However, it is clearly not a case where the survival of a community is dependent upon the solvency of this business as it was in Carriere. (vii) Past diligence and previous offences There have been no prior convictions or notices of contravention given the neophyte status of the defendant corporation at the time of the offence. (viii) Degree of fault (culpability) or negligence of the employer By default, the defendant became the prime contractor on this job site.

Section 5 of the Regulations tasks the prime contractor with overseeing all parties working on the site, ensuring that their policies and procedures comply with the Act on an ongoing basis, identifying hazards and informing workers regarding those hazards and working to eliminate those hazards. The primary aim of this type of legislation is to protect the worker. The liability for workplace safety might be pictured as a pyramid. The owner or prime contractor is at the top of this pyramid followed by the employers, then the supervisors, and finally the workers.

This may vary depending on fact- specific and worksite-specific factors; however, the worker will invariably be in the bottom row of the pyramid of responsibility. For example, in R v Reid & Deleye Contractors Ltd , 2009 ONCJ 776 [ Reid & Deleye ], the Court held that where a worker is known to be somewhat reckless, it is incumbent upon the employer to ensure that the worker is sufficiently supervised so as to eliminate the risk of accident as far as is reasonably possible.

It was found that placing a foolhardy worker with a more responsible worker did not adequately address the risk as the latter did not have any authority over the worker known to be reckless.

Reid & Deleye quotes Imperial Oil Ltd v Ontario (Ministry of Labour), 1993 CarswellOnt 5401 at para 250 : “In my view, the purpose of requiring a [prime contractor] to have separate and distinct responsibilities from those of an employer is to ensure there is an overall control of the safety aspects of the project.” (ix) Contributory negligence of another party In this instance, Prairie Crane has taken responsibility for their role, which was to allow a worker to perform duties for which he was not adequately trained or experienced to do safely. Further, Mr.

Kaponyas was aware of the risks and made the choice to perform the work on the mere word of Mr. Kirkup that he would be warned if there was immediate danger. However, although Mr. Kaponyas could have unilaterally taken it upon himself to turn off the power source against Mr. Kirkup’s wishes, this would have put him in a tenuous position as an employee on Mr. Kirkup’s property. In short, they were not on an equal footing in that workplace; ultimately, the onus for ensuring the safety of Mr. Kaponyas on that job site fell to Mr. Kirkup as the prime contractor. (

x) Employer’s response - reparations to victim or family - measures taken and expenses incurred so as to prevent recurrence or continued illegal activity The defendant candidly acknowledged that there was no contact with the victim after the injuries occurred. The Court considers this a neutral factor in light of the evidence that this lack of contact was on the advice of legal counsel.

The fact that the defendant, as a result of this incident, has taken significant steps in training employees in the operation of the crane and mandated double safety checks is to its credit. (xi) A prompt admission of responsibility and timely guilty plea Although a guilty plea was recorded, a sentencing hearing became necessary when the defendant disputed key assertions, resulting in the injured worker being called to testify. However, of greater concern to the Court is Mr. Kirkup’s repeated belief that the person at risk is the person responsible for their own safety.

This demonstrates a lack of any genuine remorse or a true understanding of the responsibility for employee safety that was placed on him as a property owner. In my view, this serves to neutralize the otherwise mitigating effect of a guilty plea. Conclusion [ 18 ] Under The Act and the Regulations , an owner of a required work site must designate a prime contractor to coordinate safety on location. Fire Sand failed to make that designation, and accordingly, those responsibilities fell to it. The law has placed the largest responsibility for mitigating risk in the workplace upon the prime contractor.

Further, Fire Sand, represented by Mr. Kirkup, was physically present and aware of the lack of coordination between the activities of Prairie Crane and Mr. Kaponyas. Indeed, Mr. Kirkup acknowledged that he was aware of the risk posed by that lack of coordination and when asked to provide safety coordination, he refused. In contrast, Prairie Crane was represented by an inexperienced crane operator and Mr. Kaponyas was an employee, the person at the bottom of the pyramid of those responsible for workplace safety. Mr.

Kirkup, as owner and prime contractor, had direct influence, control and input into the actions of both the crane operator and the victim, but did not act. It is the view of the Court that, in these circumstances, Fire Sand carries more responsibility than either Prairie Crane or Mr. Kaponyas, and that this liability is even greater given Mr. Kirkup’s direct role in the incident. [ 19 ] Thus, the aggravating circumstances that militate toward a higher fine include:

a) The very serious injuries sustained by Mr.Kaponyas;

b) A failure on the part of Mr. Kirkup to inform himself of his obligations respecting worker safety;

c) A demonstrated lack of understanding by Mr. Kirkup as to those obligations even at the time of the sentencing hearing; and

d) Mr. Kirkup’s failure to heed three separate requests by Mr. Kaponyas to provide the necessary safety measure. [ 20 ] By virtue of their role as prime contractor, Fire Sand not only failed to meet their obligation to coordinate safety on the site but had a pivotal role in that lack of coordination, which ultimately led to the incident before the Court. Given this greater degree of culpability, the actions of Fire Sand should attract a penalty greater than that imposed on Prairie Crane, particularly considering that deterrence is the primary objective of sentencing.

However, taking into account that the defendant immediately corrected the situation by naming an experienced builder as the prime contractor, has taken steps to ensure that staff members are trained in workplace safety and has mandated double safety checks with respect to use of the crane the Court is persuaded that the fine, in these circumstances, should be only nominally larger than that levied upon Prairie Crane. In saying this, the Court is aware that this is the first case of this

nature and that some time is required to educate potential defendants of their obligations and the significant repercussions that will flow if they do not. [ 21 ] Having taken all of the foregoing into account, there will be a fine in the amount of $60,000.00 plus the victim fine surcharge for a total penalty of $84,000.00. ______________________ M.L. Gray, J