[1999] OLRB REP. NOVEMBER/DECEMBER 1088
1941-99-G Labourers' International Union of North America, Local 183, Applicant v. Res-Can Joint Venture, Responding Party
Construction Industry - Construction Industry Grievance - Employer - Board finding that 'joint venture company' is bound by collective agreement where each company forming part of the joint venture has signed the collective agreement
BEFORE: David A. McKee, Vice-Chair and Board Members G. Pickell and G. McMenemy
APPEARANCES: Michael O'Brien for the applicant; no one appearing for the responding party.
DECISION OF THE BOARD; November 2, 1999
This is a referral of a grievance to arbitration pursuant to section 133 of the Labour Relations Act, 1995, 5. 0. 1995 c. 1 ("the Act").
The applicant alleges that the responding party had failed to make contributions to various health and welfare and other supplementary benefit funds required under the collective agreement between the Ontario Form Work Association and the Formwork Council of Ontario effective May 1, 1998 (the "Collective Agreement"). Contributions for the months of June and July, 1999 were received long after their due dates and not at all for the month of August.
The hearing commenced at 10:05 a.m. No one appeared for the responding party. Counsel for the applicant advised the Board that the payments for the month of August 1999 had been received and that the grievance was withdrawn with respect to the August payments. The applicant still sought the "liquidated damages" claim for late payments for June and July as set out in the pleadings filed.
The first issue raised is whether the responding party is bound to the collective agreement. The evidence we heard is as follows. The responding party is "Res-Can Joint Venture". Attached to the application is a letter on letter head of the Res-Can Joint Venture addressed to the applicant which states as follows:
"Re: Residences At The Pinnacle Two
33 Empress Avenue, North York
Highrise Formwork.
Dear Sir,
This is to inform you that the formwork on this project as per the collective agreement for residential high-rise, will be executed by a joint venture company (Res-Can Joint Venture) consisting of:
Resform Construction Ltd.
and
Canform Structures Limited
Both of these companies are presently signatory to your collective agreement.
Yours truly,
Res-Can J/V
Alex Delulis
At the hearing the applicant filed copies of the voluntary collective agreements by which both Resform Construction Ltd. and Canform Structures Limited became bound to the Collective Agreement.
The applicant also filed financial records indicating that Res-Can has complied with the collective agreement and made remittances to various benefit funds required under the Collective Agreement since April 1999.
There is no agreement signed by anyone on behalf of the joint venture. In the circumstances we have no trouble finding that Res-Can is bound to the collective agreement. The applicant has asked that the Board consider this issue in greater detail as the issue does arise from time-to-time.
The responding party is described as a "Joint Venture" between corporations. The term 'joint venture" is not a legal term of art. In this panel's experience, in the construction industry the term generally means an association of two or more corporations formed for the purpose of completing a specific project or a series of projects or type of project. Generally such associations meet the legal definition of a partnership.
This appears to be the generally accepted meaning of the term in commercial transactions in general. In 1987 the Ontario Court of Appeal stated:
Another class is that where persons repose trust in one another where common property may or may not be involved. Examples of this class are partnerships and joint venture types of cases. A joint venture (also known as a joint adventure) is in essence a form of partnership. It has been defined in Black's Law Dictionary, revised, 4th ed. (1968), at p. 73, as:
A commercial or maritime enterprise undertaken by several persons jointly; a limited partnership, - not limited in the statutory sense as to liability of the partners but as to its scope and duration . . . An association of two or more persons to carry out a single enterprise for profit, for which purpose they combine their property, money, effects, skill and knowledge. . . . A special combination of two or more persons where, in some specific adventure, a profit is jointly sought without any actual partnership or corporate designation.
See also United Dominions Corp. Ltd. v. Brian Pty. Ltd., (1989) 59 ALJR 676. Partnerships and joint ventures are, of course, commonly, and one can say with some degree of certainty, usually formed for the purpose of carrying on commercial activities. In many cases the persons who become partners or joint adventurers are at ann's length prior to the creation of the partnership or joint adventure. Each is concerned with promoting his or her own interests and welfare. This has not prevented the courts from finding that a fiduciary relationship may exist between the intended partners or joint venturers before the partnership or joint venture has been created and even though the intended partnership or joint venture never comes into existence: see United Dominions Corp. Ltd., supra.
(International Corona Resources Ltd. v. Lac Minerals Ltd. (1987) 62 O.R. (2d) p. 1 at pp 45-46).
See also the comments of the court in Carleton Condominium Corp. No. 11 v. Shenkman Corp. Ltd. (1985) 1985 CanLII 2056 (ON HCJ), 14 DLR (4th) 571 (Krever J.) at pp. 597-8.
The question for the Board in this case is whether the joint venture is bound by the one collective agreement that has been executed by one (or in this case both) of the members of the joint venture.
Res-Can's letter of April 19, 1998 does not specify what the nature of the relationship between the two entities engaged in the joint venture is. Absent any other explanation, and given the manner in which the term is used in the construction industry, we are prepared to conclude that a joint venture is at law a partnership unless the contrary is demonstrated. In this case the responding party has stated that there are two corporations making up the joint venture both of which are bound to the Collective Agreement. Assuming that the joint venture is in fact a partnership, the Partnership Act R.S.O, 1990 c. P-S (which is itself a codification of common-law principles) applies. This Act provides that the partnership itself and each partner are jointly and severally liable for the debts and the wrongful acts or omissions incurred or committed by any partner (and obviously any agent, officer, or employee of any partner) in the course of conducting the business of the partnership: see sections 10 and 11. The act of being engaged in a partnership does not, however, make each partner liable for all of the debts or obligations of all the other partners incurred or undertaken outside the partnership. The issue for the purpose of this application is whether the partnership is bound by the Collective Agreement obligations of one or more of the partners when it undertakes work covered by that collective agreement.
One way of approaching the problem is by way of an application under sub-section 1(4) or section 69. Although the Board has never dealt with an application similar to the facts of this case, in two cases it has dismissed applications under sub-section 1(4) characterizing the relationship among the responding parties to those cases as one more like a simple commercial sub-contracting arrangement than a joint venture: Construction P. H. Grager Inc. [1985] OLRB Rep. Feb. 233 at paragraph 10, Ainsworth Electric Co. Limited [1993] OLRB Rep. Sept. page 817 at paragraph 31. Subsection 1(4) might apply to the relationship between a corporation bound to a collective agreement and the joint venture itself. The sub-section applies when there are two or more corporations, individuals, firms, syndicates or associations or any combinations thereof. The sub-section uses the word "firm" which may mean any sort of unincorporated business or industry including a partnership (see section 5 of the Partnership Act) but does not use the word "partnership". Does this mean that, in circumstances such as these, the applicant is obliged to bring an application under sub-section 1(4) or section 69 or can the Board find that the joint venture is bound by virtue of the fact that a collective agreement is binding on one or more of the partners?
In the absence of any other facts from the responding party, we conclude that we can and we do find that the joint venture in this case is bound to the Collective Agreement. If a corporation is bound to observe the terms and conditions of a collective agreement when it carries on business activities covered by a collective agreement, it makes no difference that the corporations that does so jointly with another party. The partner does not lose any of its legal obligations or attributes by becoming involved in the joint venture or partnership. All that the joint venture (if it is a partnership) does is to make the other partner liable for any breach of the collective agreement if the breach of this obligation occurs in the course of the business of the partnership. Therefore the joint venture is bound to the same collective agreement as the individual member of the joint venture. Of course, any other partners in the joint venture which do not have collective agreement obligations, are not required to observe the terms and conditions of the collective agreement in any business they conduct outside of the scope of the joint venture.
This conclusion is, of course, only a presumption that may be rebutted depending on the facts. In Foundation-Janin (A Joint Venture) [1972] OLRB Rep. Feb. page 137 the International Union of Operating Engineers brought an application for certification for the employees of the joint venture. One of the partners, Foundation, led evidence that the joint venture was a partnership but was structured so that Foundation did all of the construction work and employed all of the employees on the site in the name of Foundation not in the name of the joint venture. All employees who performed work under the collective agreement of the Operating Engineers were covered by and paid pursuant to the collective agreement with Foundation. The role of the other partner (Janin) was limited to supplying capital and making the financial arrangements necessary for the project. The Board concluded that the employment relationship was exclusively with Foundation and therefore dismissed the application for certification. Given that there is no particular legal form designated by the words 'joint venture", the particular manner in which any one joint venture is structured may give rise to many other considerations. Conflicting collective agreement obligations (as opposed to work jurisdiction issues) may also require resolution through section 69. One can speculate endlessly. What we have decided for the purposes of this case, is that on these facts, we conclude the responding party is bound to the Collective Agreement.
The financial records filed by the applicant indicate that the responding party has filed remittances on the dates indicated in the application. Applying Article 16.04 of the Collective Agreement, the "liquidated damages" for late payments are $22,366.61. Although the interest rate for subsequent months of a late payment is very high, in the absence of any submissions by the responding party we see no reason not to apply the terms of the Collective Agreement as set out in Article 16.04. The responding party had the applicant's calculations, with the interest rates set out, when it chose not to file a Form A-87. It therefore could not have been under any illusion as to what the applicant sought. We note as well that one of the signatories for the employer association is that of Alex Delulis who also wrote the April 19, 1998 letter on behalf of the Joint Venture.
Accordingly the Board orders the responding party to pay to the applicant the sum of $22,366.61 forthwith.