[1999] OLRB REP. JANUARY/FEBRUARY 113
0180-96-G; 0181-96-R; 3195-97-R Ontario Pipe Trades Council and United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local Union 527 ("UA"), Applicants v. Win. Roberts Electrical and Mechanical Limited and Win. Roberts Investments Inc. and Conestogo Mechanical Inc. and Conestogo Electrical Inc. and Win. Roberts Electrical and Mechanical Inc. and Maple Key Investments Inc. and Hebel Sheet Metal Inc., Responding Parties; Ontario Pipe Trades Council and United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local Union 527 ("UA"), Applicants v. Win. Roberts Electrical and Mechanical Limited and Win. Roberts Investments Inc. and Conestogo Mechanical Inc. and Conestogo Electrical Inc. and Win. Roberts Electrical and Mechanical Inc. and Maple Key Investments Inc. and Hebel Sheet Metal Inc., Responding Parties v. The Employees of Conestogo Electric, Gary Ill, Intervenors; Sheet Metal Workers' International Association, Local Union 562 v. Hebel Sheet Metal Inc. and Conestogo Mechanical Inc. and Win. Roberts Electrical and Mechanical Limited and Win. Roberts Investments Inc. and William Roberts Electrical and Mechanical Inc. and Maple Key Investments Inc. and Conestogo Electrical Inc., Responding Parties
Practice and Procedure - Reconsideration - Related Employer - Sale of a Business -Board earlier dismissing motion brought by certain responding parties to dismiss applications under sections 69 and 1(4) of the Act for post-application delay - Responding parties asking Board to reconsider decision because of union's failure to disclose agreement between union and certain responding parties described as akin to "Mary Carter agreement" - Board concluding that agreement should have been disclosed, but also that its existence would have had no impact on Board's earlier decision regarding post-application delay - Request for reconsideration dismissed
BEFORE: G. T Surdykowski, Vice-Chair.
APPEARANCES: Alex Ahee for UA, Local 527; Craig Flood for the Ontario Pipe Trades Council; Rob Brohman for Conestogo Electrical Inc.; Simon J. Adler for Win. Roberts Electrical & Mechanical Ltd., Win. Roberts Investments Inc. and Win. Roberts Electrical & Mechanical Inc.; Margaret Szilassy for Maple Key Investments Inc.; D. Brent Labord for Conestogo Mechanical Inc,; Michael Failes for Hebel Sheet Metal Inc.; no one appearing on behalf of Sheet Metal Workers International Association, Local Union 562.
DECISION OF THE BOARD; January 27, 1999
The responding parties seek reconsideration of the Board's March 30, 1998 decision.
The actual request for reconsideration was first made by Maple Key Investments Inc. by letter from counsel dated August21, 1998, and subsequently in September 1998 by Conestogo Mechanical Inc. in other correspondence.
The responding parties assert that the request for reconsideration (although there is actually more than one, they may be conveniently treated as being one) is based on "fresh evidence" received on August 11, 1998. The request for reconsideration was filed well beyond the thirty-day time limit specified therefor in the Board's Rules. Although no express request for an extension of time was made in that respect, such a request is implicit in the request for reconsideration.
The other responding employers join with Maple Key Investments Inc. and Conestogo Mechanical Inc. in seeking reconsideration (although for reasons which will
become apparent, the Win.Roberts entities did not do so actively).
The UA entities, applicants in Board File Nos. 0180-96-G and 018 l-96-R, submit that the request for reconsideration has not been made in the proper form, that it is untimely, and that it should be denied on its merits in any event. The Sheet Metal Workers' International Association, Local 562, the applicant in Board File No. 3 195-97-R, has taken no position with respect to the request for reconsideration.
Although broadly framed, the request for reconsideration is directed at the sub-section 1(4)/69 application in Board File No. 0181 -96-R, and specifically the Board's dismissal of the responding parties' motion to dismiss that application on the basis of the post-application delay of proceeding with it.
The "fresh evidence" which is the basis for the request for reconsideration, is a document dated January 30, 1998 which bears the title "Acknowledgement", but which is clearly an agreement between the Ontario Pipe Trades Council and UA, Local 507, the applicants in Board File No. 0181-96-R (and which are conveniently referred to together as the UA for the purposes of this decision), on one hand, and Win. Roberts Electrical & Mechanical, the On-Site Group Inc., and Mattbridge Investments Ltd. on the other. Pursuant to their agreement, and the five variously-dated appendices to it, those parties have agreed that:
(a) On-Site will be subject to the same contractual arrangements which bind Win. Roberts & Mechanical Inc. in any future involvement in plumbing or pipefitting work;
(b) On-Site and Win Roberts Electrical & Mechanical Inc. were bound by and would sign the UA provincial and maintenance collective agreements;
(c) any proceedings herein before the Board against On-Site would be discontinued;
(d) the proceedings herein as against Win. Roberts & Mechanical Inc. and its predecessors will continue subject to the UA indemnifying and saving them harmless from any damages or other relief with respect to events prior to January 3, 1997 in that respect, and the applicants would make it clear in the proceedings that as against the Win. Roberts entities, the UA seeks relief only in connection with matters which occurred prior to January 3, 1997, and further that the interests of Win. Roberts Electrical & Mechanical Inc. from January 3, 1997 on need not and would not be represented before the Board;
(e) notwithstanding the aforesaid, Win. Roberts Electrical & Mechanical Inc. acknowledges the UA's right to seek declaratory relief against it under sub-section 1(4) and section 69 of the Act in Board File No. 0181-96-R, but the UA agrees that any such declaration by the Board would have no force or effect after January 3, 1997 as against Win. Roberts Electrical & Mechanical Inc.;
(f) Win. Roberts Electrical & Mechanical Inc. and Mattbridge Investments Ltd. agree that if Mattbridge ever became involved in work within the jurisdiction of the UA, it and its successor, if any, would be done by all of the terms and conditions to which Win. Roberts Electrical & Mechanical Inc. had agree to be bound by.
Upon receiving and reviewing the request for reconsideration, the Board ordered written submissions, and subsequently a hearing was held on January 14, 1999.
Counsel for the Win. Roberts entities filed written submissions in which it was asserted that as a result of the aforesaid January 30, 1998 agreement, further appearances before the Board by them in these proceedings were unnecessary. The three Win. Roberts companies asked that they and their counsel be formally relieved from the necessity of further attendances in the proceedings. This request was reiterated at the January 14, 1999 hearing by counsel.
At the hearing, the Board declined to make any order or direction in that respect. The Board noted that the Win. Roberts entities could choose not to participate further in these proceedings, but observed that if they exercised that choice, they would have to bear the consequences of doing so. (Of course, the choice which the Win. Roberts entities have is somewhat restricted in that they remain parties to the proceeding and they therefore remain obliged by sub-section 1(5) and sub-section 69(13) of the Act to "adduce at the hearing all facts within their knowledge that are material to the allegations" that the responding parties constitute one employer for purposes of the Act, or that there has been a sale of a business, as the case may be.)
Although the January 30, 1998 agreement and many of the material facts were not in dispute, the UA put the responding parties to the strict proof of certain facts which they did dispute. The Board directed that the parties make their submissions on the basis that the disputed facts relevant to the request for reconsideration were true and provable, that the UA specify the facts which it put the responding parties to the strict proof of, and that the Board would deal with that issue as and when it considered it appropriate to do so.
One of the issues identified in the written submissions was who should actually hear and determine the request for reconsideration. To some extent, events overtook the apparent dispute between the parties in that respect. However, because I resigned from the Board effective December 31, 1998, and I have not been continued as a part-time Vice-Chair, my jurisdiction is limited to dealing with Board matters I became seized with prior to the effective date of my resignation. There was no suggestion that I could not deal with the request for reconsideration of my March 30, 1998 decision. However, my jurisdiction is strictly limited to doing that and no more.
The January 30, 1998 agreement was not disclosed to the Board at the hearing of the motion for dismissal on February 24, 1998. The responding parties submit that it should have been disclosed prior to or at least during that hearing, because it is "akin" to a "Mary Carter agreement". The responding parties assert that they did not know and could not have known about the January 30, 1998 agreement until it was disclosed before the panel hearing the merits of the sections 1 (4)/69 applications at a hearing on August 11, 1998. The responding parties rely on the Law Society of Upper Canada's Rules of Professional Conduct, and the decisions in Pettey v. Avis Car (1993) 18 C.P.C. (3d) 50 (Ontario Court General Division) and Bodnar v. Home Insurance Co. (1987) 25 C.P.C. 2(d) 152 (a decision of a Master of the Ontario Supreme Court, as it then was). They submit that the failure to disclose the January 30, 1998 agreement in a timely way constitutes an additional abuse of process to the one found by the Board in the March 30, 1998 decision, such that the Board should now reconsider that decision and grant the motion for dismissal.
The UA submit that the responding parties knew or ought to have known enough about the existence of the January 30, 1998 agreement to create a due diligence obligation which would have revealed the existence of the agreement before August 11, 1998 if it had been exercised, that the request for reconsideration was not made either on a proper form or in a timely way, and that the responding parties have not satisfied the threshold criteria for reconsideration and the request should be denied on its merits, in any event.
Sub-section 114(1) of the Labour Relations Act, 1995 provides that:
(1) The Board has exclusive jurisdiction to exercise the powers conferred upon it by or under this Act and to determine all questions of fact or law that arise in any matter before it, and the action or decision of the Board thereon is final and conclusive for all purposes, but nevertheless the Board may at any time, if it considers it advisable to do so, reconsider any decision, order, direction, declaration or ruling made by it and vary or revoke any such decision, order, direction, declaration or ruling.
This provision gives the Board a very broad discretion, far beyond that provided in the Statutory Powers Procedure Act, for example, to reconsider any of its decisions. Having said that, the provision also contemplates that a Board decision will be final and conclusive unless there is good reason to change it. Legal and labour relations considerations also mitigate against revisiting matters once they have been determined. The Board has recognized this, and over the years, the Board has developed some jurisprudential guidelines which inform the exercise of its discretion under sub-section 114(1). As a general matter, the Board will not reconsider a decision unless an error has clearly been made; or a request for reconsideration raises important policy issues which have not been given adequate consideration; or the party requesting reconsideration seeks to adduce new evidence which it could not have, with the exercise of due diligence, discovered and adduced before, and which new evidence would, if accepted, have a material impact on the decision in question; or a party seeks to make representations which it had no previous opportunity to make. Of course, these are only general guidelines, and the Board retains the discretion to reconsider any decision whenever it considers it appropriate to do so. Sub-section 114(1) is not intended to provide another opportunity for a party to submit the same case, either de novo, or as a form of appeal.
Considerations of finality and expeditious litigation also mitigate against the Board exercising its discretion to reconsider decisions with respect to preliminary, procedural or evidentiary matters, or with respect to motions made in the course of a proceeding, until after a decision on the merits has issued, unless in the circumstances the Board considers it necessary or appropriate to do so. The decision on the merits may make some such issues moot, and a request for reconsideration may result in undue delays in a proceeding. It is apparent that the request for reconsideration in this case has delayed this proceeding. However, this is not the "usual" case, and the request for reconsideration raises an issue which is worthy of consideration.
The applicant's first objection can be dealt with quickly. This request for reconsideration has been made without using the form which the Board has constructed for that purpose. So what? The Board's forms have been created to facilitate rather than to impede the ability of parties to bring matters before the Board. Further, both the Act (section 123) and general principles contemplate that a defect in form or technical irregularity will not be fatal or determinative of a substantive right. Although the Board prefers that parties use the Board's forms, it is generally acceptable to file other than on the applicable form, so long as all the required information is provided, and it is presented in a legible and comprehensible manner. (Concomitantly, using a Board form will not save an application which illegible, incomprehensible or patently deficient.)
The Board is satisfied that this request for reconsideration has been filed in an acceptable form.
The UA's first point in its timeliness objection is that the responding employers failed to specifically request an extension of time to make it. As I have already indicated, the Board considers such a request to be implicit. It would in any event be unduly technical, particularly in the circumstances of this case, for the Board to refuse to consider the request because a formal request for an extension of time was not expressly made. The UA's second timeliness point is that an extension of time should not be entertained or granted because the responding employers have not proceeded expeditiously with it, in that they had notice of the January 30, 1998 agreement prior to the February 24, 1998 hearing, and in any event well before it was produced at the August 11, 1998 hearing. In that respect, the UA points to the February 3, 1998 and June 2, 1998 letters from counsel for On-Site, Mr. Labord's letter dated June 22, 1998, Ms. Szilassy's letter dated June 30, 1998, and Mr. Adler's letter dated July 27, 1998. The UA also submits that the employers' requesting reconsideration have failed to exercise due diligence because they did not request a production order from the Board which would have forced the UA to produce the January 30, 1998 agreement sooner than it did.
The Board has carefully reviewed the correspondence cited. The February 3, 1998 letter from Mr. Roger Hunt was written to Mr. Ahee. It is unclear who Mr. Hunt was writing on behalf of, but it appears (given Mr. Hunt's subsequent June 2, 1998 letter) that he was writing on behalf of all of the On-Site Group Inc., Mr. Ted Schlotzhauer and Win. Roberts Electrical & Mechanical Inc. Although Mr. Hunt does not specify it, it is apparent from his subsequent correspondence that he was writing to Mr. Ahee as counsel for both of the UA entities herein. In the February 3, 1998 letter, Mr. Hunt confirms that: (a) the UA would not be proceeding with any claim involving On-Site in these proceedings; (b) the relief being sought by the UA arises solely out of relationships alleged to have existed prior to January 3, 1997 when Mr. Schlotzhauer purchased Win. Roberts Electrical & Mechanical Inc.; (c) the UA is satisfied that Win. Roberts Electrical & Mechanical Inc. and Win. Roberts Investments Inc. merged and are continued as part of Win. Roberts Electrical & Mechanical Inc.; (d) it is agreed that no allegations are being made that there is any ongoing association or relationship between the Win. Roberts entities and the other responding employer after January 3, 1997.
The February 3, 1998 letter does not refer to the January 30, 1998 agreement directly. Nor does it do so indirectly. On the contrary, a reasonable interpretation of this letter is that it is written confirmation of some oral agreements. The Board is satisfied that a reasonably diligent counsel or other person reading this letter would not have suspected the existence of the January 30, 1998 agreement.
The June 2, 1998 letter presents somewhat differently. It is clearly written by Mr. Hunt as counsel for Mr. Schlotzhauer and Win. Roberts Electrical & Mechanical Inc. It is a letter written by counsel to the Board, stating his clients' position regarding their involvement in these proceedings and the UA's May 4, 1998 request for a production order. Although this letter does not specifically refer to the January 30, 1998 agreement, it does refer to a settlement "of these proceedings" as between the UA and Win. Roberts Electrical & Mechanical Inc. in January 1998. In the absence of the earlier February 3, 1998 letter, a reasonable person might have suspected that there was a written settlement agreement which they ought to ask be produced as part of these proceedings. Within the context of that earlier correspondence, it could equally reasonably read as referring to the agreement described in the February 3, 1998 letter itself. A fair reading of Mr. Labord's June 22, 1998 letter and Ms. Szilassy's June 30, 1998 letter suggests that that was their reading of it. However, it also appears from Mr. Labord's subsequent July 22, 1998 letter that it occurred to him that he should ask whether there was some other agreement, and that it be produced if there was. Mr. Adler's July 27, 1998 letter would not have led a reasonable reader to conclude that there was an agreement other than that set out in the February 3, 1998 letter from Mr. Hunt.
The Board is not satisfied that there was anything in any of this correspondence which should reasonably have alerted counsel to the existence of the June 30, 1998 agreement.
The Board is also satisfied that none of the responding parties failed to act with due diligence by not pursuing a request for a production order which would have forced a January 30, 1998 agreement to be produced. As a general matter, most of the documents which are relevant to a section 1 (4)/69 application are employer documents. The Win. Roberts entities which are responding parties continue to be parties, notwithstanding any agreement between the parties or some of the parties that they are not or need not participate, until the Board says they are not parties or need not participate. Board proceedings are not a cocktail party where one can come and go as one pleases. Whatever the effect of the January 30, 1998 agreement, it does not operate to limit the Board's jurisdiction, or to relieve any party of its obligations under the Act or the Board's Rules. The January 30, 1998 agreement should therefore have been produced by the Win. Roberts entities or one of them, and it ought to have been before the Board prior to the February 24, 1998 hearing. However, and notwithstanding the UA's allegations in these proceedings, the failure of the Win. Roberts entities to produce that agreement in a timely way does not operate to preclude the other responding parties from pursuing this request for reconsideration, particularly since the Board is also satisfied that the UA was under an obligation to disclose and produce the January 30, 1998 agreement itself, whether or not it is a "Mary Carter" type of agreement. That disclosure should have been made prior to or at the February 24, 1998 hearing, and in any event, when a specific request was made before the August 11, 1998 hearing (which proceeded before another panel). In that respect, due diligence in this case did not require any of the moving responding parties to seek a production order. On the face of what they knew or reasonably ought to have known, there was no reason for them to do so. Further, the Board's Rules contemplate and the Board expects parties to produce relevant documents, particularly when they are asked to do so. The Board does not expect the parties to engage the processes of the Board at every turn. The Board's processes should only be engaged as a last resort.
Accordingly, in the circumstances of this proceeding, the Board considers it appropriate, in accordance with its discretion under the Rules and as master of its own procedure, to grant leave to make the request for reconsideration herein beyond the time specified therefor in the Board's Rules. The Board considers the request for reconsideration to have been made in a timely way.
In civil litigation circles, a secret agreement between two or more parties to a piece of litigation which may affect the outcome or conduct of an action is known as a "Mary Carter" agreement. This expression appears to originate from the American case, Booth v. Mary Carter Paint Co., 202 So. 2d 8 (florida District Court App. 1967), but it has been adopted in Ontario.
The typical Mary Carter agreement contains the following features:
(1) only some of the parties to an action are party to the agreement;
(2) typically, a contracting dependent guarantees the plaintiff a certain monetary recovery and the exposure of the defendant is capped at that amount;
(3) the contracting defendant remains in the action;
(4) the contracting defendant's liability is decreased in direct proportion to any increase in the liability of any non-contracting party defendant;
(5) the agreement is kept secret.
As a matter of both litigation and procedural fairness, and where counsel is involved or aware of it as a matter of professional conduct, such an agreement must be revealed before trial, or if it is entered into after a trial has begun, as soon as it is made (see, J & M Chartrand Realty v. Martin (1981) 22 CPC 186 (Ontario High Court; Pettey v. Avis Car, sup ra, and Rules 8 and 10 of the Rules of Professional Conduct of the Law Society of Upper Canada). The Board is satisfied that such a requirement also applies in proceedings before the Board (although the nature of Board proceedings is such that the issue is less likely to arise). It is well established that it is an abuse of process not to disclose the existence and terms of such an agreement (although the disclosure of any dollar amounts of damages is in the discretion of the tribunal).
The January 30, 1998 agreement does not appear to be a true Mary Carter agreement. The contracting employers, two of which were never actually made parties to these proceedings, have not guaranteed the UA any particular result or recovery. Win. Roberts Electrical & Mechanical Inc. remains a party, but has expressed a desire not to participate further in the proceedings, and the way the agreement is structured does not actually cap that company's liability. Nor does it contemplate that its liability in any respect will be increased or decreased in accordance with the liability of any other responding party. Despite the fact that the UA has agreed to indemnify and save harmless Win. Roberts Electrical & Mechanical Inc. from any damages or other costs arising out of this proceeding, and has agreed to in effect set up an estoppel against the operation of any declaration which the Board may issue affecting that party as and after January 3, 1997, it does not purport to affect the rights of the other responding employers as between themselves and Win. Roberts Electrical & Mechanical Inc., in that the other responding parties can still claim over and against that party, and to the extent that their liability is reduced as a result, it will be the UA which will absorb the impact.
Finally, although the January 30, 1998 agreement was kept secret, it had no effect on the hearing before me on February 24, 1998. The Win. Roberts parties participated fully in the hearing that day, and vigorously supported the motion for dismissal. There was nothing in the conduct of the Win. Roberts parties at the February 24, 1998 hearing which gave any hint of the January 30, 1998 agreement.
As I have already indicated, the Board is satisfied that the January 30, 1998 agreement should have been disclosed, whether or not it is a Mary Carter type of agreement. But not only did it have no effect on the conduct of the hearing of February 24, 1998, its existence would have had no impact on the March 30, 1998 decision.
The motion before the Board on February 24, 1998 was based on post-application delay. The existence of the January 30, 1998 agreement could not have assisted the moving parties in their motion. It was irrelevant to the question of post-application delay, since if it had been revealed at or prior to the February 24, 1998 hearing, neither the length of delay, nor the basis for the motion in that respect would have been any different. If anything, it might have given the UA something to point to in mitigation of the delay.
If the agreement had been revealed, it may have given the moving parties an additional basis for their motion, in that they might have argued that there were two abuses of process; namely, the delay and the agreement (as indeed they argued at the January 14, 1998 hearing of the request for reconsideration), and that individually or cuminulatively these abuses justify dismissal. However, having reviewed the agreement and heard the representations of the parties in that respect, I am not satisfied that the result of the dismissal motion would have been any different even if they had done so.
The hearing on the merits on this case has not proceeded beyond the preliminary stages, although the failure of the UA to disclose the January 30, 1998 agreement in a timely way has delayed the proceedings even further. However, even where a true Mary Carter agreement is exposed prior to or in the early stages of a proceeding, the result will generally not be dismissal. As the Court observed in Pettey v. Avis Car, supra, parties are free to settle disputes, and settlements which are freely entered into are to be encouraged, even if the settlement does not involve all of the parties or apply to all of the issues. The important thing is that everyone, including, in this case, the Board, be aware of any such settlements so that the appropriate procedural protections can be put in place and the parties can structure their conduct of the case accordingly.
That is the case here, and as with the question of pre and post-application delay, the Board can take the January 30, 1998 agreement into account in determining the merits of the UA's application, and in fashioning an appropriate remedy, including perhaps declining to issue any declarations or other remedies even if the Board finds that the pre-conditions of sub-section 1(4) have not been met, or that there has been a sale of business within the meaning of section 69 of the Act. (I note that this is the approach which the Board took in Rosmar Drywall & Acoustics Ltd. (Board File Nos. 0863-92-R, 0864-92-R, 0865-92-G, 1303-92-R and 1656-92-G, unreported decision dated May 13, 1993), a proceeding which involved an agreement between the unions and one of the employer parties which had certain similarities to the agreement before the Board in this case.)
All of this can be and is properly dealt with by the merits panel, and I find it neither necessary nor appropriate to reconsider my March 30, 1998 decision. It is therefore unnecessary to deal with the evidentiary issues. The requests for reconsideration are dismissed.
It appears that these matters are now clear to proceed before the merits panel.