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Newsletters
> May 2001
Ministry of Transport Liable for Ice on Road
MacMillan v. Ontario (Minister of Transportation
and Communication)
[2001] O.J. No. 1891 (Ont. C.A.)
The plaintiff was driving her vehicle along Highway
401 near Woodstock when she drove over an exposed bridge that was
covered with "black ice." As a result, she lost control
of the vehicle and was injured in the resulting accident. She sustained
devastating head injuries.
The case against the Ministry was dismissed at trial
on the basis that the Ministry had no knowledge of the icy surface
on the bridge. Moreover, the trial judge held it was not reasonable
for the Ministry to have foreseen the existence of black ice, a
phenomenon known as "preferential icing". The trial judge
assessed damages at almost $4 million. The Court of Appeal set aside
trial judge's conclusions on liability, held the Ministry liable
in negligence, and allowed the appeal. The Court was satisfied that
the bridge could have been salted and sanded prior to the accident
and had that happened, the appellant would not have skidded out
of control. The Ministry was liable for breach of its statutory
duty.
Under Section 33(1) of the Public Transportation
and Highway Improvement Act, the Ministry is required to keep
a highway in repair. The statutory duty of repair requires the Ministry
to undertake reasonable remedial response.
The evidence showed that, although the roadway on
either side of the bridge was bare and dry because of residual summer
heat in the underlying ground, the exposed bridge was covered with
black ice. The court held that the trial judge was wrong in deciding
the case on the basis of whether or not the Ministry had knowledge
of the actual existence of preferential icing. It held that the
Ministry's statutory obligation was to determine whether the situation
gave rise to an unreasonable risk of harm to users of the highway.
If so, the question the Court had to determine was whether the Ministry
took appropriate remedial action once it knew or ought to have known
that situation. That required an examination whether, in all the
circumstances, the bridge presented a risk of serious and imminent
harm to motorists such that it constituted a special and highly
dangerous situation which the Ministry knew or ought to have known
required special attention.
On all the evidence, it was clear that the Ministry
was aware of preferential icing on bridges, generally, and the danger
that that created to motorists. In addition, there had been frost
warnings and forecasts of freezing temperature. The Woodstock patrol
of the Ministry responsible for five bridges on their 40 kilometer
patrol could have inspected the bridges within 20 minutes and, if
they found preferential icing, they could have immediately spread
salt and sand carried on the patrol truck. It also did not escape
the Court of Appeal's attention that the evidence revealed that
two other accidents had occurred in the same patrol stretch of highway
earlier that same morning. Both were caused by icing on bridges.
By this decision, the court has again been explicit
that the duty of care on the Ministry includes the foreseeability
of the risk of danger and not just the danger itself. If there is
a foreseeable risk of harm, there is a duty to investigate to determine
whether the danger exists and, if so, to do something about it.
This case is consistent with the recent trend in Ontario decisions
showing that the courts will look very carefully at Ministry of
Transport assertions that ice-build up was unforeseeable and unavoidable.
What it also implies is that if ice-build up is inevitable, the
Ministry may have to be extra vigilant. It is difficult to see the
Ministry being allowed to claim it should not have known if "preferential
icing" is a known problem in any given area.
As counsel representing the appellant put it, the
accident was "entirely preventable. All somebody had to do
was read the weather reports."
JGN
SURETY LIABLE FOR CONTRACTOR'S
"COLLATERAL OBLIGATIONS"
The so-called "standard performance bond",
widely used in the construction industry in North America, guarantees
contractors' obligations to an owner. In Whitby Landmark Development
Inc. v. Mollenhauer Construction Ltd. [2000] O.J. No. 3838 (S.C.J.),
the performance bond wording required the surety to "complete
the contract in accordance with its terms and conditions".
By the terms of the contract, Landmark, the owner, was entitled
to 75% of cost savings if the cost of the work came in below the
contract price.
As the project progressed, it was clear that Landmark
would ultimately be entitled to savings since it was apparent that
the work would cost less than the price stipulated in the contract.
Before any final accounting, Mollenhauer encountered financial
difficulties and did not pay savings owed to Landmark.
Landmark took the position that the savings were recoverable
under the performance bond and the surety responded that its obligations
were limited to the usual "bricks and mortar" provisions
of the contract; i.e. they were limited to the terms of the bond
itself, not those of the underlying contract.
The Court found that the wording of the performance
bond obliged the surety to complete the contract in accordance with
its terms and conditions including the contractors' obligation to
remit a share of project cost savings to the owner. The surety was
probably never aware of this provision until the dispute arose.
It was suggested the surety likely issued the bond and assumed the
contractual obligations without inquiring what the contract terms
and conditions might be. This is probably because a surety is usually
more focused on the value of the indemnity standing behind the bond
rather than the actual form of the bond that is issued.
In the end result the surety was fully liable for
the contractors collateral obligations. There is much discussion
about the legal scope and ramifications of this decision. Regardless
of how far reaching this case might be as a precedent, the need
for sureties to examine and where appropriate to clarify the scope
of their bonds with reference to the terms and conditions of the
particular underlying contract is clear.
JGN
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