COURT FILE NO.: 406/06
DATE: 20070213
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
BROOKFIELD LEPAGE JOHNSON CONTROLS FACILITIES MANAGEMENT SERVICES LTD.
Applicant
- and -
ONTARIO LABOUR RELATIONS BOARD, IBEW CONSTRUCTION COUNCIL OF ONTARIO, JOHNSON CONTROLS LTD., JOHNSON CONTROLS NOVA SCOTIA U.L.C., JOHNSON CONTROLS L.P., JOHNSON CONTROLS WORLD SERVICES LTD., and BROOKFIELD MANAGEMENT SERVICES LTD.
Respondents
Douglas F. Best and Kelly A. Charlebois, for Brookfield Lepage Johnson Controls Ltd.
Michael S. F. Watson, for Johnson Controls
Leonard Ricchetti, for Brookfield Management
Ronald N. Lebi, for IBEW Construction Council of Ontario
HEARD: January 24 and February 9, 2007
REASONS FOR DECISION
CUMMING J.:
The Motion
[ 1 ] The Respondent IBEW Construction Council of Ontario (the “Council”) moves to quash an application for judicial review (presently scheduled for March 2, 2007) by the Applicant Brookfield Lepage Johnson Controls Facilities Management Services Ltd. (“Brookfield LJ.”) on behalf of the five corporate Respondents.
[ 2 ] The Respondents Johnson Controls Ltd (“Johnson C”), Johnson Controls Nova Scotia U.L.C. (“Johnson N.S.”), Johnson Controls L.P. (“Johnson LP”), Johnson Controls World Services Ltd. (“Johnson WS”) and Brookfield Management Services Ltd. (“Brookfield”) are each employers (hereafter, the “employers”).
[ 3 ] The Council is the designated employee bargaining agency representing 13 locals, including Local 586, of the International Brotherhood of Electrical Workers (“IBEW Union”).
Background
[ 4 ] Local 586 of the IBEW Union brought two separate proceedings in 1998 against the employers: a grievance and an application to the Ontario Labour Relations Board (“Board”). At issue was whether the employers constituted one employer for the purposes of the Labour Relations Act, 1995 (the “Act”) and the collective agreement already in place.
[ 5 ] The employers say that negotiations culminated in a consensual resolution of the dispute and resulted in Minutes of Settlement (“Settlement”) executed July 7, 1999. As a result of the Settlement, the 1998 application was discontinued. Reportedly, on two occasions since 1999, Local 586 has initiated proceedings against the employers to enforce the Settlement, with the sanction of the Board.
[ 6 ] The employers assert that the Settlement includes in para.7 a prohibition upon the Council filing further proceedings for a ten year period, that is, until January 1, 2009.
[ 7 ] The employers assert that contrary to paragraph 7, the Council filed an Application in August, 2004 (the “Current Application”) before the Board under s. 69 and/or s. 1(4) of the Act. The employers say that the type of proceeding commenced by the Current Application is exactly the type of proceeding expressly contemplated and prohibited by paragraph 7 of the Settlement. The Board agreed to hear a preliminary motion by the employers on this threshold issue.
[ 8 ] The Council’s position is that it is not bound by the Settlement.
[ 9 ] The Board rendered a decision March 6, 2006, upon this preliminary issue, being as to whether the Settlement was binding upon the Council. The Board found that there is an ambiguity in the 1999 Settlement, the Settlement is enforceable as against those parties who have indicated their agreement to it, and that the President of the Council, Ken Scott, had at least the ostensible authority to bind the Council. However, the Board concluded the Settlement was unenforceable as against the Council.
[ 10 ] The employers also submitted before the Board that the Current Application is an abuse of process. This issue was not addressed by the Board in its written decision.
The Application for Judicial Review
[ 11 ] The employers have applied for Judicial Review of the Board’s decision, seeking an order prohibiting the Board from proceeding with the Council’s Current Application on the basis that it constitutes a breach of the Settlement and an abuse of process.
The Motion at hand
[ 12 ] The application for judicial review deals with the threshold motion and issue determined by the Board, that is, whether the Board properly can proceed to deal with the Current Application on its merits (as found by the Board), or whether the Council is in effect prohibited from proceeding by reason of being bound by the Settlement. In essence, the employers submit that the correct interpretation of the Settlement precludes any consideration of the Current Application on its merits.
[ 13 ] Section 7 of the Settlement Agreement reads:
- These Minutes of Settlement will be effective for a period of ten (10) years commencing January 1, 1999. Thereafter, but not before, the Applicant and/or any affiliated bargaining agent of the International Brotherhood of Electrical Workers and the IBEW Construction Council on [sic] Ontario will be free to file related employer/sale of a business applications involving one or more of the same parties hereto at the Ontario Labour Relations Board, including filing a new related employer/sale of a business application identical or similar to the one in these Proceedings. Notwithstanding any provisions of these Minutes of Settlement the applicant will be entitled to rely on any and all facts and pleadings in the instant Applications. Both parties agree that they shall carry out the terms of this agreement in good faith in the interpretation and administration of these minutes of settlement.
[ 14 ] On its face, para. 7 appears to apply to the Council. First, the Council is named expressly as being bound. Second, Vice-Chair Jesin notes at para 4 of his Decision that the Council is itself an “affiliated bargaining agent” of the bargaining agency (ie. Local 586). Thus, the Council is purportedly also embraced by this term in para. 7 of the Settlement.
[ 15 ] A settlement is enforceable against those parties “who have agreed to the settlement” and if put in writing and signed by the parties “or their representatives”: s. 96(7) of the Act.
[ 16 ] There is common ground that at the time of negotiating the Settlement, Mr. Ken Scott was Business Manager of Local 586 and President of the Council. The decision (para. 20) of Vice-Chair Jesin states: “I do not doubt that Mr. Scott, as President of [the Council] had at least the ostensible authority to bind the Council.” However, Vice-Chair Jesin noted that Mr. Scott signed the Settlement only in his capacity as President of Local 586. The Council is not a signing party. Nor is the Council a named party in the title of the Settlement. Vice-Chair Jesin noted (para. 21) that
…the evidence did not establish that [the responding employers] were told or even knew that Mr. Scott had any official position with the Council when they entered into the settlement.”
[ 17 ] Vice-Chair Jesin did not find there was apparent authority on behalf of Mr. Scott to bind the Council under contract law, as the agent on behalf of a principal ie. the Council. (It is implicit to Vice-Chair Jesin’s decision that he found that Mr. Scott was an agent with express authority to bind Local 586 as a principal).
[ 18 ] Moreover, it is noted that para.7 concludes by saying “Both parties agree….” It does not say” All parties”. This reinforces the argument that the Council was not a party to the Settlement.
[ 19 ] At the commencement of the hearing before the Board, at the apparent request of Vice-Chair Jesin, counsel for the Council wrote a letter to Local 586 formally warning that if the Council was successful in its Current Application (arguing that the Settlement was unenforceable and illegal) then some of the terms seen as beneficial to Local 586 would fall away. It seems strange that Local 586 would remain passive if it did not favour the demise of the Settlement.
The “Abuse of Process” Issue
[ 20 ] The employers also advanced as a ground of their motion before Vice-Chair Jesin that there was an abuse of process on the part of the Council (and Local 586) in bringing the Current Application, given the intent of the Settlement as expressed in para. 7.
[ 21 ] Vice-Chair Jesin provided no express findings on the asserted ground of ‘abuse of process’ by the employers. Implicitly, the result of his Decision dismisses this assertion. However, Vice-Chair Jesin provides no reasons at all in respect of this ground raised by the employers in their motion before him. Moreover, none of the counsel now involved for the parties was present at the hearing before Vice Chair Jesin and it is unclear as to what submissions were made to Vice Chair Jesin on this issue of abuse of process.
[ 22 ] The employers apparently advance two arguments in this regard.
[ 23 ] First, the employers argue that there could be a finding of bad faith on the part of Local 586 and the Council within the meaning of para. 7 of the Settlement if the evidence established that Local 586 has persuaded the Council to act as its surrogate in overcoming the constraints of para. 7 imposed upon Local 586. The employers say that the evidence is that the Current Application is in reality brought on behalf of and for the benefit of Local 586 electrician employees. They say that any decision in the current proceeding before the Board would only benefit Local 586 employees and not the Council itself.
[ 24 ] It is noted that the concluding words of para. 7 state:
…Both parties agree that they shall carry out the terms of this agreement in good faith and that each owes to the other a duty of good faith in the interpretation and administration of these minutes of settlement.
[ 25 ] The employers argue the Council is knowingly seeking to facilitate a party to the Settlement, Local 586, to act in bad faith, and thereby defeat the Settlement, contrary to Local 586’s contractual obligations,. In other words, Local 586 would be seeking to do indirectly what it cannot do directly, and doing so through the knowing agency of the Council.
[ 26 ] Second, the employers argue that the Council is bound by the Settlement even if it is not formally a signatory to it. The employers say that the evidence establishes that the Council had formal notice of the 1998 Application and proceedings and the opportunity to participate in both the proceedings and the negotiations leading to the Settlement. The employers say that the Council, at the least, knew of the wording of paragraph 7 as it was being negotiated and chose not to intervene to contradict the reasonable expectations created on the part of the employers. The employers say that for five years the Council has acquiesced in the application of the terms of the Settlement.
[ 27 ] The employers say there is estoppel by conduct on the part of the Council. The employers argue that the evidence establishes that in the circumstances the Council is either a party or a privy to the Settlement such that it is an abuse of process for the Council to now bring a second proceeding that mirrors the issues raised in the 1998 proceeding and resolved through the Settlement. See generally, Donald J. Lange, The Doctrine of Res Judicata in Canada (2d ed.: Lexis Nexis Butterworths) at 387.
Disposition
[ 28 ] In my view, the issue raised by the application for Judicial Review is discrete, that is, it is whether the Council has the right to proceed. The facts relevant to its determination are separate and distinct from the facts to be put forward relating to the merits of the Council’s Current Application before the Board.
[ 29 ] In my view, the Judicial Review sought is not properly categorized as seeking prematurely a review of a mere “interim decision” of the Board. The threshold motion and issue before the Board constitutes an exceptional or extraordinary situation that should properly be reviewed prior to any dealing by the Board with the Council’s Current Application on its merits.
[ 30 ] There is no risk of fragmenting or protracting the proceedings for this Judicial Review of the Board decision on the threshold issue. See Howe v. Institute of Chartered Accountants of Ontario, [1994] O.J. No. 1803 (C.A). There is equity and efficiency in proceeding to deal with a Judicial Review of the threshold issue as to whether the Council is bound by the Settlement prior to any further steps in the underlying merits proceeding before the Board. Reportedly, the Board has not yet scheduled the hearing date for the merits proceeding to commence.
[ 31 ] It is sufficient to say that the correctness of the OLRB decision on this threshold issue is open to serious debate. See generally Ash v. Loyd’s Corp. (1992), 8 O.R. (3d) 282 at 284 (Gen. Div.).
[ 32 ] For the reasons given, I dismiss the motion of the Council to quash the Application for Judicial Review.
Alternative Motion of the Council to Strike the Affidavit of Mark Goldenberg
[ 33 ] The Applicant employers seek to put evidence before the Court, namely an affidavit of Mr. Mark Goldenberg, which the Council asserts does not properly form part of the record in an Application for Judicial Review. The Council moves to strike the affidavit.
[ 34 ] The employers state that the proffered Goldenberg affidavit is necessary to determine whether the Board made a jurisdictional error. Affidavit evidence may be admissible in support of an application for judicial review where a party would be prejudiced in its submissions on a fundamental issue under review. See Denby v. Ontario (Agriculture, Food and Rural Affairs Appeal Tribunal), [2005] O.J. No. 4952 (Div. Ct.).
[ 35 ] Mr. Goldenberg, Senior Vice-President of Human Resources for the Applicant Brookfield LJ, attended at the hearing of the Board dealing with the Current Application. In his affidavit, Mr. Goldenberg traces the history of Local 586’s 1998 Application before the Board, the negotiation and achievement of the Settlement, and the events leading up to the Current Application. He asserts that Mr. John Pender, a representative of the Council, is personally aware of the history and meaning to the Settlement. Mr. Goldenberg’s evidence is prima facie relevant to the issues.
[ 36 ] Mr. Goldenberg has not, of course, been cross-examined on his proffered evidence. Moreover, an affidavit by an interested party of his recollection as to the testimony of the witness for the opposing party at a hearing some two years earlier is certainly a departure from the norm relating to admissible evidence. However, there is no transcript of evidence (reportedly the norm for Board proceedings). As well, there was an agreed statement as to facts before the Board with only one witness, Mr. John Pender, giving oral testimony.
[ 37 ] In my view, it is necessary and appropriate in the interests of a proper and fair Judicial Review to have a record of relevant evidence, to the extent this is reasonably possible.. I addressed this situation by directing counsel for Mr. Pender to provide an affidavit as to his testimony before the Board in respect of the Current Application and the preliminary motion. The hearing was adjourned pending receipt of this affidavit.
[ 38 ] At the resumption of the hearing, I reviewed the affidavits of Mr. Goldenberg and Mr. Pender in open Court with counsel. Deletions have been made in respect of both affidavits put forward in the first instance, to arrive at restatements which amount to virtually common ground as to what the testimony of Mr. Pender was before Vice-Chair Jesin and the relevant background facts to the issues. If counsel cannot formalize this evidence by agreement in preparation for the March 2, 2007, Judicial Review, they may speak to me.
Disposition
[ 39 ] For the reasons given, the intended affidavit evidence of Mr. Goldenberg and Mr. Pender is admitted into evidence for the purpose of the Judicial Review.
CUMMING J.
Released: February 13, 2007
COURT FILE NO.: 406/06
DATE: 20070213
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
BROOKFIELD LEPAGE JOHNSON CONTROLS FACILITIES MANAGEMENT SERVICES LTD.
Applicant
- and -
ONTARIO LABOUR RELATIONS BOARD, IVEW CONSTRUCTION COUNCIL OF ONTARIO, JOHNSON CONTROLS L.P., JOHNSON CONTROLS WORLD SERVICES LTD., and BROOKFIELD MANAGEMENT SERVICES LTD.
Respondents
REASONS FOR DECISION
CUMMING J.
Released: February 13, 2007