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Newsletters 2001 > 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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