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IN THE MATTER OF AN ARBITRATION
Under
THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT
Before
THE GRIEVANCE SETTLEMENT BOARD
BETWEEN
Ontario Public Service Employees Union (Hymers et al.)
Grievor
- and -
The Crown in Right of Ontario (Ministry of Natural Resoruces)
Employer
BEFORE
Belinda A. Kirkwod
Vice-Chair
FOR THE UNION
Gavin Leeb Barrister and Solicitor
FOR THE EMPLOYER
Lisa Campagnone Counsel Management Board Secretariat
HEARING
June 16, 2003.
INTERIM DECISION
This Decision relates to the scope of evidence to be called in this hearing.
Allan Hymers and Kevin Wingfield filed grievances on March 20, 2002. They claimed that with the termination of the compressed work year agreement, which in this interim decision is referred to as “Schedule A”, that the Employer was required to return them to the terms and conditions set out in the Pilot Float Agreement under Schedule 6.
The Union is seeking to call extrinsic evidence relating to the various agreements entered into by the parties, in order to interpret the contracts in accordance with the parties’ intentions.
The grievors are water bomber pilots who were originally CL-215 pilots, but who have since become CL-415 pilots. As the identification of these pilots as CL-215 pilots or CL-415 pilots makes no difference to the issues in this arbitration, for simplicity, I will refer to these pilots who hold currently hold the CL-415 classification as CL-215 pilots. Originally they were unclassified employees, hired on one year contracts, but over the course of time became classified employees.
Initially all pilots in the MNR were governed by a Memorandum of Understanding entered into in 1981. This agreement was superseded by a later agreement dated April 1, 1988, which is known as the “Float Agreement”. The parties agreed in the Float Agreement, that the Float Agreement was in effect for a year and was to be renewed annually automatically unless notice in writing was given prior to January 1 of the intention to alter or amend the Float Agreement.
In March 1991, the parties developed terms and conditions of work that related specifically for the water bomber CL-215 pilots and signed a document called “Application of Schedule A to CL-215 Pilots Positions”. Schedule A was put into effect retroactively by a “Minute of Understanding” dated November 4, 1991. Under this Minute of Understanding, the CL-215 pilots were transferred from Float Agreement to Schedule A for a one year trial period and it was agreed that they would not be covered by the Float Agreement for as long as Schedule A was in effect.
The Minute of Understanding entered into between the Employer and the Union on November 4, 1991 states:
Effective March 18, 1991, CL-215 Pilot positions will be transferred from Schedule 6 to Schedule A for a one-year trial period.
It is hereby understood and agreed that while Schedule A is in effect, the full time classified pilots assigned to these positions will not be covered by the April 1, 1988 Memorandum of Understanding between the Ministry and OPSEU with respect to Pilots (i.e., “Float Agreement”).
The CL-215 pilots have been governed by Schedule A each year from 1991 with a brief interruption in 2002. In 2002, the parties entered into agreement recognizing the past history and agreeing that the CL-215 pilots would still be considered under Schedule A. The pilots are no longer under Schedule A this year, 2003.
In the interim, on March 16, 1995 the Ministry and the Union entered into a Memorandum of Understanding, hereinafter called the “1995 MOU” and it was agreed that it was to apply to all pilots with the exception of the CL-215 pilots. Its preamble states:
i. This agreement applies to all classified and unclassified pilots employed by the Ministry of Natural Resources, with the exception of those classified pilots that are assigned to the CL-215 water bomber program.
ii. The intent of this agreement is to recognize the pilots’ irregular working conditions necessitated by the Ministry’s diversified role in resource management aviation and transport.
iii. Unless otherwise provided for by this Agreement, all appropriate provisions of the Public Service Act and regulations and the Collective Agreement apply.
It is the Employer’s position that after 1995, the default agreement for the CL-215 pilots, should they no longer fall under Schedule A had changed. It was no longer the Float Agreement, but the collective agreement. The Union however claims that once Schedule A is not in effect, the pilots are covered by the 1995 MOU, which had replaced the 1988 Float Agreement. Alternatively, the Union claims that once the CL-215 pilots are no longer under Schedule A, the Employer is bound by the 1991 Minute of Understanding and therefore, the default agreement is the Float Agreement entered into in 1988.
Union Counsel submits that the issue that is being placed before this Board, is whether the parties intended and did change the default agreement for the CL-215 pilots in 1995 to the collective agreement, or did the 1991 Minute of Understanding prevail.
Union Counsel submits that to resolve the issue it is necessary to determine whether the parties agreed to cut out access to the Float Agreement for the CL-215 pilots in 1995. The Union submits that it is necessary to hear extrinsic evidence in order to interpret the 1995 MOU, as the 1995 MOU is latently ambiguous, when looked at in the context of what has transpired. The Union submits that the intention in the 1995 MOU while creating a new agreement for non-CL-215 pilots, was to leave the CL-215 pilots under Schedule A with no alterations to their conditions of employment which would therefore not cut out their access to the Float Agreement for the CL-215 pilots on the termination of Schedule A. The Union submits that the 1995 MOU did not reflect an agreement to remove the default agreement from the CL-215 pilots, as alleged by the Employer.
Union Counsel submits that if in 1995, the parties intended to override the 1991 agreement, which would be the outcome if the Employer’s position was accepted, the CL-215 pilots would be the only pilots who would not be able to access the Float Agreement. The Employer could at will decide to terminate Schedule A and place the pilots under the collective agreement, which would place the CL-215 pilots in a worse situation than the other pilots, as they would no longer be under an agreement tailored to their special circumstances. Union’s Counsel submits that it makes no sense that the pilots would give up their rights in 1995 without any arrangements made to meet the conditions under which they work.
Union Counsel submits that the 1981 agreement, the Float Agreement and the 1995 MOU refer in each of their preambles that the pilots work irregular hours of work. Union counsel submits that it would not make sense that the parties intended to exempt CL-215 pilots from access to these arrangements, as they too have irregular hours. Union Counsel submits that as found in the Canada Post (Burkett) decision, where the agreement does not make sense, an agreement is latently ambiguous, extrinsic evidence is admissible. Similarly, as in OPSEU/Craig/Grimes and The Crown in Right of Ontario (Ministry of Transportation) GSB #2662/91, 2711/91 (Dissanyake), where the language leads to an irrational or inconsistent result, such that reasonable parties would not have intended the result, an ambiguity is established. Accordingly, the Union submits that the reference to the irregular hours creates a latent ambiguity for which extrinsic evidence is required.
Union Counsel furthermore submits that as in Marystown Shipyard Ltd. and Industrial Union of Marine & General Workers, Local 20 1993 CanLII 16698 (NL LA), [1993] 39 L.A.C. (4th) 276 (Browne) that silence on the issue creates an ambiguity.
Union Counsel submits that arbitrators now have the power to rectify agreements (Public Service Alliance of Canada and Nav. Canada 2002 CanLII 44896 (ON CA), [2002] 212 D.L.R. (4th) 68 (Ontario C.A.). Union’s counsel submits that in this case, the Board may need to rectify the 1995 and the 1988 agreements as there are statements in the agreements which do not reflect the parties’ intentions. Extrinsic evidence is necessary to determine if the documents reflect the parties’ intentions.
To support the Union’s position, Union counsel is seeking to call evidence that the pilots have, for at least twenty years, been covered by agreements which have deviated from the collective agreement, and they have never been covered by the collective agreement per se, or by the collective agreement alone.
The Union is also seeking to call extrinsic evidence in areas such as:
the interpretation of the 1995 Float Agreement on the basis that circumstances have rendered 1995 ambiguous.
on the letter dated April 3, 1991, from Rob Kennedy to Jill Morgan, to prove that the letter as stated reflected the parties’ agreement.
on the letter dated April 27, 1995 from Cameron Walker to Rob Kennedy, to demonstrate that the CL-215 pilots had not yet been discussed, and that there was no intention to alter the arrangements affecting the CL-215 pilots. This evidence would also support the Union’s interpretation of the 1995 MOU; and
that in the 1995 negotiations, representatives of those affected are at the negotiating table. In 1995, the pilots were not part of the negotiations.
Union Counsel is also seeking to call evidence with respect to the 1991 negotiations and the conditional nature of the agreement, the nature of the transfer to Schedule A in condition for its fall back position.
The Union submits on the basis of Re Web Graphics Ltd. And Graphic Communications International Union, Local 525M 1999 CanLII 35925 (BC LA), [1999] 84, L.A.C. (4th) 200 (Blasina) that the Board should hear extrinsic evidence first and then determine if there was an ambiguity and determine whether there are grounds to rectify the contracts.
Employer Counsel:
Employer Counsel submits that all the contracts relating to the pilots are clear and unambiguous, and therefore no extrinsic evidence is not admissible as an aid to the interpretation of the contracts (Foothills Provincial General Hospital and United Nurses of Alberta, Local 115 et al. 1993 CanLII 7083 (AB KB), 140 A.R. 321). In particular, Employer counsel submits the 2001 contract is the pivotal contract, and is clear and determines the issue between the parties. The April/May 2001 Memorandum of Understanding, hereinafter referred to as the “2001 MOU”, states in part:
Whereas the parties signed an MOU on April 11, 1991 transferring CL 215 (now CL-415) pilots from Schedule 6 to Schedule A for a one-year period, and
Whereas the parties developed guidelines for the application of Schedule A to CL-215 (now CL-415) pilots dated March 22, 1991 for that one-year trial period, and
Whereas the parties have continued this arrangement past the one-year trail period, now
The parties do hereby agree to the following arrangements with respect to the application of Schedule A to CL-415 pilots for the fiscal year 2001/02:
4 This parties agree that, except for the changes made herein, the guidelines for the application of Schedule A to CL-215 (now CL-415) pilots dated March 22, 1991 remain applicable for the duration of this agreement.
The parties agree to review the status of this agreement at the end of the current operating season. The parties understand that such a review may result in minor or major amendments to the agreement, or to the termination of the agreement in its entirety.
Employer Counsel submits that the preamble to the 2001 MOU clearly states that the CL-215 pilots transferred from Schedule 6 to Schedule A, and makes no reference to the Float Agreement. Accordingly, Employer Counsel submits, that since the parties agreed in the preamble that they were continuing the terms from 1991, and have agreed in paragraph 4 of the MOU that the guidelines for the application of Schedule A would be continued, the omission of any reference to the Float Agreement has to be given some meaning, and that meaning is that the default agreement for the CL-215 pilots was not the Float Agreement. Employer Counsel submits that as the 2001 MOU is clear, no extrinsic evidence is required to interpret the 1995 MOU.
Employer Counsel submits that in any event, the language in the 1995 MOU is clear and unambiguous, especially when one accepts the preamble that the agreement reached is in recognition of the pilots who work irregular hours and do not include the CL-215 pilots, who work regular but inordinate number of hours during fire season.
Employer Counsel submits that the 1995 MOU was intended to replace the Float Agreement, as seen through the summary of the changes made to the Float Agreement in the covering letter to the new 1995 MOU. It covered compensation, work schedules and hours of work. The Employer intends to argue that the some similarities in the two agreements, such as the same recognition of the irregular working conditions, together with the changes made supports the argument that the 1995 MOU was to replace the Float Agreement.
Similarly, Employer Counsel submits that the Float Agreement was to cover those pilots who had irregular hours of work, such as pilots in air transportation, and not to cover the CL-215 Pilots as they did not work irregular hours, but inordinate number of hours.
Employer Counsel further submits that the parties found that the Float Agreement was not appropriate for the CL-215 pilots, as the CL-215 pilots worked an inordinate number of hours, and looked for a new arrangement that would be more appropriate for them. As a result, to recognize the numbers of hours which the CL-215 pilots worked, the parties negotiated and signed a different contract on March 22, 1991 which they named Schedule A, which was put into effect on November 4, 1991, and retroactively removed the CL-215 pilots from Schedule 6 and placed them under Schedule A for a one year period from March 18, 1991. Employer counsel argued that Schedule A was new, and was not conditional as suggested by Union Counsel.
The implementation of Schedule A was a reflection of the new arrangements which were put into effect on a trial basis.
Employer Counsel submits that the 1991 Minute of Settlement contemplates that there are three different arrangements or contracts, Schedule 6, Schedule A, and the 1988 Float Agreement. Employer Counsel argued that paragraph two of the 1991 Minute of Understanding was no longer applicable, as the parties had lived with the arrangements in Schedule A, and as a result, it had been automatically been removed. There was no issue for 10 years as Schedule A was renewed each year.
Employer Counsel submits that language in all the contracts is clear and that there is no need for rectification of the contracts. It therefore does not require extrinsic evidence to interpret the contracts. Employer’s Counsel further submits that as in Re Eastern Bakeries Ltd. and Bakery, Confectionary & Tobacco Workers International Union. Local 86 1989 CanLII 9283 (NB LA), 9 L.A.C. (4th) 366 (Graser), mere silence on an issue does not mean that there is an ambiguity, which would then give rise to evidence of past practice.
Employer Counsel argues that there is a high threshold to allow the admission of extrinsic evidence, such as seen at page 8 of OPSEU/Craig Grimes (supra) decision, which she argues has not been met. To allow extrinsic evidence requires more than irrational results, it must be to the degree that it is not reasonable to conclude that the parties intended such results. Furthermore, as shown in Re Wilson’s Truck Lines Ltd. and Industrial Wood & Allied Workers of Canada, Local 700 1999 CanLII 35984 (ON LA), 80 L.A.C. (4th) 1 (Verity) at page 17, hardship to one party is not reason to alter the clear meaning of a provision.
The Employer also relies on United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction 1993 CanLII 88 (SCC), [1993] 102 D.L.R. (4th) 402 (SCC) in support of the requirements for the admissibility of extrinsic evidence.
Decision
The issue I have been asked to resolve in this arbitration is to determine what agreement sets out the appropriate terms and conditions that are applicable to the CL-215 pilots, when the Employer terminates or has terminated the Guidelines to the application of Schedule A. The contracts upon which the answer to this question rests, are the subject of this interim decision. The issue for this interim decision, is whether the contracts are clear and unambiguous, in which case extrinsic evidence is not admissible as an aid to interpretation, or whether the Union is permitted to present extrinsic evidence as an aid to interpretation of the various contracts, as the contracts are ambiguous; and whether extrinsic evidence is admissible to rectify the contracts in accordance with the parties intentions at the time of the construction of the contracts.
Mr. Justice Gale in the landmark decision of Leitch Gold Mines (supra) reviewed the basic principles of contract interpretation, starting with general premise that the parties should be entitled to rely on the documents which they have drafted as setting out the terms of their agreement. As a result, a general rule had developed prohibiting the use of extrinsic evidence to interpret agreements, and interpretation of the documents were based upon their clear and ordinary meaning. However, where the intentions of the parties as evidenced in their written document cannot be discerned as a result of an ambiguity in the document, extrinsic evidence is then admissible to clarify its meaning.
Chief Justice Gale in Leitch Gold Mines (supra) sets out the basic principle at page 215:
A transaction having been reduced to writing, extrinsic evidence is generally inadmissible to contradict, vary, add to or subtract from its terms. This is fundamental in the interpretation of written instruments. Parol evidence may, however, be admitted in aid of interpretation.
Chief Justice Gale went out to describe the difference between a latent and a patent ambiguity and the consequences of finding either ambiguity at page 216:
Where the language of the document and the incorporated manifestations of initial intention are clear on a consideration of the document alone and can be applied without difficulty to the facts of a case, it can be said that no patent ambiguity exists. In such a case, extrinsic evidence is not admissible to affect its interpretation. On the other hand, where the language is equivocal, of if unequivocal but its application to the facts is uncertain or difficult, a latent ambiguity is present. The term “latent ambiguity” seems now to be applied generally to all cases of doubtful meaning or application.
At times an ambiguity must be distinguished from an inaccuracy. The former is a double or devious meaning, that is to say, one word or one expression or a series of expressions capable on its face or in its application of two or more meanings. As the term is used in the law of contracts, it implies that the parties knew fundamentally what they were contracting for or about but did not express it clearly when they put their intentions and agreement into writing. On the other hand, an inaccuracy will occur when the terms of the agreement which has been made orally are incorrectly reduced to writing.
Extrinsic evidence may be admitted to disclose a latent ambiguity, in either the language of the instrument or in its application to the facts, and also to resolve it, but it is to be noted that the evidence allowed in to clear up the ambiguity may be more extensive than that which reveals it. Thus, evidence of relevant surrounding circumstances can be accepted to ascertain the meaning of the document and may clarify the meaning by indirectly disclosing the intention of the parties.
If the surrounding circumstances, however do not explain the latent ambiguity an equivocation is said to be established, in which event in addition to evidence of circumstances, direct evidence of the parties’ intention may be received to resolve the equivocation.
These basic principles of contract interpretation have been applied in many cases when assessing whether there was an ambiguity, and whether extrinsic evidence is allowed to aid in the interpretation of the agreement.
More recently, the Supreme Court discussed the importance of the general rule prohibiting the use of extrinsic evidence, and the corollary acceptance of extrinsic evidence where there is an ambiguity in Bradco Construction (supra) at page 419:
The general rule prohibiting the use of extrinsic evidence to interpret collective agreements originates from the parol evidence rule in contract law. The rule developed from the desire to have finality and certainty in contractual obligations. It is generally presumed that when parties reduce an agreement to writing they have included all the necessary terms and circumstances and that the intention of the parties is that the written contract is to be the embodiment of all the terms. Furthermore, the rule is designed to prevent the use of fabricated or unreliable extrinsic negotiations to attack formal written contracts.
On of the exceptions to the parol evidence rule has always been that where there is ambiguity in the written contract itself, extrinsic evidence may be admitted to clarify the meaning of the ambiguous terms: se Leggatt v. Brown (1899), 30 O.R. 225 (Div. Ct.). However, determining when one falls within the scope of this exception is far from easy, as even what can be said to constitute a patent ambiguity is unclear. Some authorities have held that there must be more than arguability of different constructions of the agreement (Re Milk & Bread Drivers, Local 647, and Dairies Ltd. (1969). 1969 CanLII 1464 (ON LA), 20 L.A.C. 406), while others suggest that the appropriate test is a lack of clear preponderance of meaning stemming from the words and structure of the agreement: Re Int’l Assoc. of Machinists, Local 1740, and John Bertram & Sons Co. (1967), 1967 CanLII 1039 (ON LA), 18 L.A.C. 362. An ambiguity is to be distinguished from an inaccuracy, a novel result or a mere difficulty in construction.
Mr. Justice Sopinka went further at page 421 and accepted the ability of an arbitrator to accept extrinsic evidence without finding that the agreement was ambiguous, but finding that the agreement was unclear. Mr. Justice Sopinka referred to the approach taken by Mr. Justice Gonthier, who found that a contract may have to be looked at in the context of greater or broader contracts, that might effect it.
Therefore, the basic presumption upon which contract interpretation rests, is that the parties, when reducing an agreement to writing, set down the terms and conditions upon which they intend to rely. Accordingly, in order to ensure that the integrity of the contract remains intact, the general rule in contract interpretation prohibits the use of extrinsic evidence to interpret the agreement. However, as parties do not always express themselves clearly and without ambiguity, in order to give effect to the parties’ intentions, where the written document is found to be ambiguous, extrinsic evidence is admissible to clarify what was meant by the parties when they constructed the agreement in order to give effect to their agreement. Where there is an ambiguity, such that there is more than one meaning on the face of the document a patent ambiguity arises, and extrinsic evidence can be used as an aid to interpretation. A latent ambiguity may arise in the application of the terms of the agreement to the facts, or where circumstances render the meaning of the document ambiguous. As a result, as the intention in contract interpretation is to give effect to the parties’ intentions as they expressed themselves or intended to express themselves in an agreement, extrinsic evidence has been allowed to clarify what was meant by the parties when the parties were constructing the contract.
As recognized in the Leitch Gold Mines (supra) decision and Re Canada Post Corporation (supra) decision, extrinsic evidence can also establish an ambiguity. In cases where extrinsic evidence is admitted, the purpose of allowing the evidence to be heard is not with the view of changing an agreement, which has been reached, but it is to clarify an ambiguity, to reflect the parties’ intentions.
Where an agreement is silent on a particular term, it may create an ambiguity in the agreement, or it may reflect that there was no agreement or even a consideration of the term. On the other hand, it also may reflect a mistake by the parties to include an agreed term in the contract. In that case, extrinsic evidence is admissible, again not for the purpose of changing the contract, or of creating a new contract, but to ensure that the contract reflects the true intentions of the parties.
These principles must therefore be applied to the case at hand. Union Counsel submits that the 1995 MOU is latently ambiguous, which ambiguity is caused by circumstances outside the agreement, and further that the 1995 MOU may need to be rectified to correspond to the parties’ intentions. Employer Counsel submitted that it was not necessary to accept extrinsic evidence to interpret the 1995 MOU, as the 2001 MOU resolved the issues between the parties.
I interpret the 2001 MOU as setting out the terms that were to apply for the 2001 year, but it does not set out what is to occur at the termination of the agreement or at the discontinuance of the Guidelines for the application of Schedule A. The preamble sets out the history, that the parties transferred the pilots from Schedule 6 to Schedule A for a one year period, that the parties developed guidelines for the application of Schedule A for the one year trial period, and that the parties have continued those arrangements past the trial period.
Furthermore, the fourth paragraph of the preamble and paragraph 4 in the substance of the 2001 MOU only deal with the application of Schedule A for the fiscal year 2001/2002. Paragraph 4 states that the “except for the changes made herein, the guidelines for the application of Schedule A to CL-215 (now CL-415) pilots dated March 22, 1991, remain applicable for the duration of this agreement. The “Application of Schedule A to CL-215 Plot Positions”, the guidelines, to which it refers, does not set out what occurs on its termination.
Paragraph 5 of the 2001 MOU contemplates that the agreement may be terminated, but it also does not state what is to occur on termination. As there is no reference to what occurs on termination of Schedule A in the 2001, the 2001 MOU does not answer the question posed by the parties, as suggested by Employer Counsel. It is silent as to the parties’ intentions. Therefore it is necessary to consider whether the 1995 MOU is ambiguous, or needs to be rectified to meet an oral agreement of the parties.
On the plain and ordinary meaning given to the preamble in the 1995 MOU, the 1995 MOU does not apply to the CL-215 pilots. Therefore as a result of that exclusion, the 1995 MOU can be interpreted as not having any effect on any pre-existing agreement between the parties over the terms and conditions governing the CL-215 pilots. As a result, trusting that there were no intermediary agreements reached between the parties after the 1991 Minute of Settlement concerning these pilots, the application of the exclusion clause, leads to an interpretation that the CL-215 pilots would remain governed by the 1991 Minute of Settlement. Trusting that the interpretation of the 1991 Minute of Settlement provides the CL-215 pilots with access to the Float Agreement, the CL-215 pilots would retain access to the Float Agreement.
Another interpretation arising from the application of the 1995 MOU to the CL-215 pilots places the CL-215 pilots in an unclear, if not ambiguous situation. The parties have excluded the CL-215 pilots from the application of the 1995 MOU, and yet did not state what agreement was to apply to them, although previously the agreements covering the CL-215 pilots were tied to the agreements covering all pilots with irregular hours. As the Float Agreement was negotiated to cover all pilots with irregular hours, and was said by the parties to cover the CL-215 pilots prior to the implementation of Schedule A, once the Float Agreement has been replaced by the 1995 MOU, it is possible that the parties intended that with the replacement of the Float Agreement with the 1995 MOU, the exclusion of the CL-215 pilots, had the intention to not interfere with the application of Schedule A save as to change the default agreement for the CL-215 pilots to the current agreement covering all pilots with irregular hours. The silence in the 1995 MOU as to the effect of the agreement on the CL-215 pilots has made the situation unclear.
Silence, could, on the one hand, reflect that there was no agreement between the parties as to what was to occur, but it may also reflect a mistake by the parties in the drafting of the agreement, to not include an agreed term. This cannot be determined without hearing the extrinsic evidence. Whether there was no agreement, or whether there was a term of an agreement which the parties mistakenly failed to include in the 1995 MOU, which would require rectification of the contract, or whether the circumstances rendered the 1995 MOU ambiguous, cannot be determined from the face of the document.
As reflected in the decision of the Public Service Alliance (supra), consistent with the expanded scope of an arbitrator’s jurisdiction, an arbitrator’s jurisdiction now includes among the arbitrator’s remedial powers, the power to rectify an agreement. Accordingly, if it can be proved, that the parties failed to include an agreed term of the agreement in the written document, I do have the jurisdiction to rectify that document. However, in order to protect the integrity of the agreement and to protect against the dangers foreseen in the Bradco (supra) decision when extrinsic evidence is admitted, the evidence will need to meet the stringent requirements as set out in the Public Service Alliance (supra) decision at page 82 that:
… the party seeking rectification had to show, on a standard of convincing proof, the existence and content of the inconsistent prior oral agreement; that the written document did not correspond with the prior oral agreement and that permitting the other party to take advantage of the mistake would be fraud or equivalent to fraud; and the precise form in which the written instrument could be made to express the prior intention.
Therefore, as extrinsic evidence can be admissible to establish an ambiguity, and assist in the interpretation of an agreement, I will admit extrinsic evidence with respect to the interpretation of the 1995 MOU.
There was an issue as to what was meant by “ irregular hours” and whether it covered the CL-215 Pilots. I understood the submissions of both counsel as saying that all the pilots were covered under the Float Agreement, but that both parties found that it was not appropriate for the CL-215 pilots due to the nature of their working hours and the nature of their work and therefore Schedule A and the 1991 Minute of Understanding was developed to implement Schedule A. This position was supported by the second paragraph in the 1991 Minute of Understanding in which it said that the CL-215 pilots would not be covered under the Float Agreement while Schedule A was in effect. The corollary meaning was that they were under the Float Agreement before the 1991 Minute of Understanding came into effect. Notwithstanding this interpretation, I am not making any finding over the effect of the application of the 1991 Minute of Settlement, as a contradictory position was taken by Employer Counsel, when Employer counsel raised a debate over the meaning of “irregular hours” and whether the CL-215 pilots fell within that category and therefore whether they were covered under the Float Agreement. As “irregular hours” could relate to an irregular pattern of scheduled hours of work in any number of scenarios, over a day, week month or year, I find there is an ambiguity, which the parties have raised and for which extrinsic evidence will be admissible.
Union Counsel sought to bring evidence of the conditions under which the 1991 Minute of Understanding was drafted, and its conditional nature. Employer Counsel opposed such evidence on the basis that it was clear from the Minute of Understanding that this was a new arrangement. Looking at the 1991 Minute of Understanding, I find that it is clear that the agreement is for a one year trial period as it states. There is no evidence of any conditions, in the agreement or that the agreement gives rise to any conditions. I do not find that there is any ambiguity, latent or patent, in the Minute of Settlement and therefore extrinsic evidence relating to any underlying negotiations on conditions is not admissible.
As a result, extrinsic evidence is necessary to aid in the interpretation of the contracts and to determine whether the contracts reflect the intention of the parties, and I will allow the Union to proceed as requested with respect to the extrinsic evidence relating to the 1995 MOU, and I will admit extrinsic evidence relating to the interpretation of “irregular hours”, and its application to the pilots to determine the scope of the various agreements. The weight of such extrinsic evidence, will of course, remain subject to argument.
The Union was seeking to introduce evidence from the last twenty years relating to the history of agreements reached with between the Employer and the CL-215 pilots which were outside the collective agreement. Without any specificity and without hearing the request in the context of evidence which is lead, and without hearing submissions from Employer Counsel in this regard, it is not possible to make a ruling on this aspect at this time. However, as pointed out by Employer Counsel, the November 4, 1991 Minute of Understanding refers to three documents, Schedule 6, Schedule A and a 1988 Memorandum of Understanding between the Ministry and OSPEU, the “Float Agreement”, none of which are described. What remains to be seen is what is Schedule 6, and what is Schedule A, and is Schedule A different from the Guidelines for the Application of Schedule A, and where does the collective agreement fit in with respect to these Schedules. Whether that requires extrinsic evidence remains to be seen.
Dated at Toronto, this 17th day of September, 2003