International Union of Painters and Allied Trades, Local 200 v. S & S Glass & Aluminum (1993) Ltd, 2001 CanLII 14278

BEFORE: David A. McKee, Vice-Chair.

APPEARANCES: Lise Leduc, Robert Desjardins and Yves Tessier for the union; Russell Zinn, Paul Skov and David Skov for the employer and David Skov.

DECISION OF THE BOARD; July 10, 2001

1Board File 3585-00-R is an application under subsection 1(4) and section 69 of the Labour Relations Act, 1995, S.O. 1995, ch. 1 (the "Act"). In this application, the applicant, the International Union of Painters and Allied Trades, Local 200 ("the union") seeks a declaration from the Board that S & S Glass & Aluminum (1993) Ltd. and Paul Skov carrying on business as S & S Glass & Renovators are one employer with, or have sold their business to, S & S Glass (2000) Inc. Board File 3866-00-R is an application for the termination of bargaining rights of the union brought by David Skov, who alleges that he is an employee in the bargaining unit that the collective agreement would apply to if the union is successful in the section 69/1(4) application.

2At the commencement of these proceedings, the parties agreed that it was appropriate to deal with both applications simultaneously to avoid the necessity of calling the same witnesses twice in two applications.

3Before the commencement of evidence, the parties argued a motion brought by the union. In its response, as further particularized in a letter dated June 27, 2001, the applicant essentially conceded that all of the statutory preconditions necessary for an order under subsection 1(4) of the Act were present in the relationship among the three named responding parties. However, the responding parties submitted that the Board ought not to exercise its discretion under that subsection on the basis of three issues. These issues are as follows:

(1) The decision of the Board dated January 6, 2000 declaring Paul Skov carrying on business as S & S Glass & Renovators is a nullity as the "entity" that voluntarily recognized the bargaining rights of the union never existed in law.

(2) That if the declaration is valid, it must be restricted in its application to both Paul Skov carrying on business as S & S Glass & Renovators and S & S (2000) Inc. to the purposes agreed upon by the union and Paul Skov, namely to only those contracts requiring unionized subcontractors.

(3) That the union is estopped from attempting to enforce a voluntary recognition agreement that was entered into only because of its representation that the employer would be permitted to operate a double-breasted business.

4Some explanation of these issues is necessary. On August 12, 1993 Mr. Paul Skov executed a collective agreement which was stated to be between the union, and its employee bargaining agency, and an entity known as "S & S Glass & Aluminum 1993 Ltd.". In fact, no such corporation has ever been incorporated. There were three previous decisions of this Board in applications filed by the union. The decisions were issued in the absence of any response by the responding party in each application.

5In Board File 4149-98-G the Board found a violation of the collective agreement and ordered damages payable by "S & S Glass & Aluminum 1993 Ltd.". In Board File 0982-99-G the Board found that Paul Skov carrying on business as S & S Glass & Renovators had violated the collective agreement and ordered him to pay damages to the union, and in Board File 0977-99-R the Board found that S & S Glass & Aluminum 1993 Ltd. and Paul Skov carrying on business as S & S Glass & Renovators were one employer for purposes of the Labour Relations Act and issued various relief under subsection 1(4).

6It was only after the issuing of the decisions in the latter two files that the responding parties retained counsel who sought reconsideration of the Board's decisions. In the request for reconsideration, the responding parties indicated that they wished to raise as defences to all of the proceedings the same types of allegations made as a defence to this proceeding. The Board refused to grant reconsideration on the ground that the application for reconsideration had been filed beyond the time limits provided for in the Board's Rules. The Board also went on to observe, in obiter, that even if the application had been timely, the issues raised were not matters which would cause the Board to reconsider the decision.

7In its motion in this case, the union argued that the doctrine of res judicata ought to apply to prevent the employer from raising the same issues in this proceeding that it had attempted to raise in other proceedings. Following argument, I gave an oral decision which, with some grammatical changes, was as follows:

The doctrine of res judicata is one which is appropriate to apply in the circumstances of this case. The question however is what it is that the Board has decided. There is no dispute among the parties with respect to the Board as a tribunal of competent jurisdiction or that the decisions have been rendered in proceedings between the parties or their privies. The question is really one of what issue was decided by the Board in each of those cases.

The question of the issues decided in a case are defined generally by the evidence and by the decision in each case. In each of these files, there was no evidence. Accordingly, the issues are defined by the pleadings and by the conclusions the Board drew from the facts which were deemed to be true by virtue of the application of Rule 41. The fact that the responding parties failed to appear is irrelevant. Parties cannot escape the consequences of a proceeding, simply by refusing to participate. Sections 133 and 69 and subsection 1(4) do not require the consent of the parties to be effective. Accordingly, in each of these cases, the issues are limited to those raised by the applicant.

In Board File 4149-98-G the issues decided are as follows:

(a) "S & S & Aluminum (1993) Ltd." is bound to the union's provincial collective agreement. The fact that this entity was not a corporation but simply a name used by Paul Skov does not affect this finding. It may be contrary to the Business Corporations Act, but that is not a statute this Board has any authority to apply. It is likely that, if the matter were litigated, I would conclude that the entity was simply a sole proprietorship carrying on under a name that might not have been appropriate to be used. However, I do not need to enter into that analysis. In Board File 0977-99-R the Board found this entity to be one employer with another which is clearly a sole proprietorship. Therefore, these two entities, to the extent that they can be distinguished from one another, are a single entity for the purposes of the Labour Relations Act, 1995.

(b) S & S Glass & Aluminum (1993) Ltd. is bound to the union's provincial collective agreement.

(c) S & S Glass & Aluminum (1993) Ltd. owes the union $13,824.00 plus interest awarded upon filing the judgement in court.

On this basis, the first issue raised by the responding party has been decided and will not be litigated in this proceeding.

In Board File 0982-99-G the issues decided are as follows:

(a) Paul Skov carrying on business as S & S Glass & Renovators is bound to the union's provincial collective agreement.

(b) It violated the agreement in the circumstances of that job.

(c) Paul Skov is obliged to pay the union $19,180.87.

In Board File 0977-99-R the Board determined the following issues:

(a) That S & S Glass & Aluminum (1993) Ltd. and Paul Skov carrying on business as S & S Glass & Renovators carry on associated or related businesses or activities under common direction and control.

(b) That the two entities constitute a single employer for the purposes of the Labour Relations Act, 1995.

(c) Both are bound to the union's provincial collective agreement.

The issues raised by the responding party in this proceeding, in paragraphs 2 and 3 of the June 27 letter, were not raised in any of these proceedings by the union. It is understandable that the union would not raise them, but it does mean that they have not been decided. The Board refused to permit the responding parties to raise any of the issues when they sought to do so by way of reconsideration. That finding is not the same as deciding the issues raised. Rather, the Board decided that it would not hear and determine the issues that the responding parties sought to raise for the reasons given in that decision. The test for reconsideration is not an examination of the merits of the issues to be raised, but whether or not it is appropriate to reopen a final decision for the purposes of litigating them.

Therefore, the issues raised in paragraphs 2 and 3 above have never been adjudicated upon and are not matters which have been decided for the purposes of this case.

There were two additional grievances filed by the union and referred to the Board pursuant to section 133. One of these was withdrawn and the other was allowed to be terminated by the passage of time. I do not at this point know any details with respect to the withdrawal or deemed termination of these referrals, although I heard disputed assertions by both parties about them. In any event, the Board has decided nothing. Whatever effect the action of the parties in these two referrals may be on this application, there nothing which has "become part of the record" which will be applied.

To repeat, the first issue has been decided by the Board. The one or two predecessor employers are bound to the collective agreement. The responding parties in this application may urge on the Board the issues raised in paragraphs 2 and 3 as a reason not to grant the declaration under subsection 1(4), or indeed as the "baggage" or limitation that any collective agreement to which S & S Glass (2000) Inc. is bound by virtue of a finding of a sale of business. That is, the responding party may wish to argue that the union is estopped from enforcing its agreement, on "non-union jobs". The duration of such an estoppel is, of course, a matter to be decided even if the elements of estoppel are made out.

However, in this process, the responding parties may not dispute the facts which have been decided. This includes the fact that the collective agreement covered the jobs referred to in the two section 133 applications. In those applications, the employer was content to have the Board decide that the collective agreement covered those two projects. At this stage, I do not know if the general contractors from whom the responding parties receive their contracts were bound to a collective agreement requiring them to subcontract the work of the union to an employer bound to the provincial collective agreement.

Procedural Ruling

8Following this ruling, the parties then addressed the merits of the case. Again, some background is necessary. On May 17, 2001 the Board set June 28 and June 29 as the days for the hearing of these applications. On June 13, 2001 counsel for the union wrote to counsel for the responding parties requesting that certain documents be produced pursuant to subsections 1(5) and 69(13). The responding parties did not produce these documents. On June 18, 2001 counsel for the union wrote to the Board asking for an order that they be produced. With some modification, this order was made in a decision dated June 19, 2001.

9Once again, the documents were not produced.

10By letters dated June 26 and June 27 the applicant union advised the Board that it might be seeking an adjournment and ultimately that it was seeking an adjournment of the two hearing dates until the responding parties had complied with the order to produce documents. By letter dated June 27, 2001 the responding parties for the first time indicated that the documents were, in its view, irrelevant to the issues in the proceeding and constituted a fishing expedition. It asked that the Board review and rescind its production order of June 19, 2001 and stated "We strenuously object to any adjournment to produce the relevant documents".

11The request to adjourn the proceeding was denied.

12Following the rendering of the oral decision quoted above, the applicant indicated that it still wished to have production of the documents and to review them before commencing its cross-examination of any of the responding parties' witnesses. I indicated that at this stage in the proceedings, I was concerned about a further waste of the time and resources of both the Board and the parties. The parties travelled from Ottawa to Toronto for the purpose of conducting this hearing. The responding parties now conceded that certain documents existed and were arguably relevant, but that other documents were not relevant or did not in fact even exist. I suggested that it might be preferable to at least determine what documents existed and what the case, if not the evidence, of the responding parties was, before arguing about the production of documents which might not exist or about issues of relevance.

13After a brief adjournment, counsel for the applicant union advised that she wished to proceed. Counsel for the responding parties strenuously objected. He argued that this would likely prejudice his client if it was determined at some point in his examination that documents existed which ought to be produced and which were not present in the hearing room thereby necessitating an adjournment in the midst of his examination.

14I denied the request for an adjournment and directed the responding party to proceed to call its evidence. The obligation of a responding party in a section 69 or a subsection 1(4) application is well known. In Canada Cement Lafarge [1977] OLRB Rep. Jan. 5 at pp. 8-9 the Board described the obligations on a responding party as follows:

... Where relief under section 1(4) and/or section 55 is claimed, we believe that the respondent's obligation, must be sensibly delimited. In defining the obligation, some assistance is obtained by looking to Court practice in examinations for discovery in civil actions. Clearly, the analogy is not perfect or complete: the purpose of pre-trial discovery in a civil suit is quite different, as is the rationale for restricting the ambit and nature of questioning on discovery. However, the analogy is instructive, especially where there are corporate parties, for the limited purpose of indicating who should be produced, the extent to which the person produced should prepare himself to testify, and the remedies, should the witness fail to supply information properly requested from him.

On an examination for discovery, the person being examined is bound to make reasonable efforts to inform himself of all matters material to the issue in question. In the case of a corporate officer, this entails acquainting himself of facts not within his personal knowledge which are within the knowledge of other officers, servants or agents of the corporation or which form part of the records of the corporation: Bondar v. Usinovitch, 1918 CanLII 180 (SKSC), [1918] 1 W.W.R. 557 (Sask.); Geddings v. C.N.R. (1919) 1919 CanLII 223 (SK KB), 1 W.W.R. 909 (Sask. C.A.); Star Electric Fixtures Ltd. v. Sussex Fire Insurance Co., [1936] O.W.N. 654 (S.C.); and generally, Homestead & Gale, Ontario Judicature Act and Rules of Practice, vol. 2, p. 134.

Similarly, a party giving discovery is under duty to make a careful and diligent search of all relevant documents in his possession and to make diligent inquiries about all material documents which may be in the possession of others for him: Price v. Price, (1879), 48 C.J. Ct. 215.

Under the Supreme Court Rules of Practice, a corporate witness may be ordered to inform himself concerning questions properly put to him which he is unable to answer. The court also has the power to grant leave to examine a second officer if the witness has failed to give to the party seeking it the information to which it is entitled.

We believe that similar principles and procedures should apply under sections 1(5) and [69(13)]. The obligation to adduce material facts is upon the respondent, and the witness or witnesses chosen by it should tender their evidence-in-chief. Except in exceptional circumstances (e.g. where the respondent is unrepresented), we do not believe that it is desirable for the Board to conduct the inquiry. Nothing in the recent amendments causes us to disagree with the observation of the Board in the Super City Discount Foods case, supra, that "It is not for the Board ... to undertake an inquiry of its own in the matter." There may be situations where members of the panel may wish to question witnesses to have testimony clarified or amplified. However, generally speaking, it is desirable that the carriage of the proceedings be left to the parties.

Once the respondent has completed its evidence, the applicant may wish to contend that the initial obligation to adduce all material facts has not been met. In such cases, an applicant may, at that stage, ask the Board to direct compliance. In most instances, however, it would seem to us that the applicant should proceed with its cross-examination. If, in cross-examination, the witness is unable, or unwilling, to respond to questioning, and if the applicant can persuade the Board that the answer sought is likely to be material to the issues in dispute, the applicant is entitled to seek a direction from the Board requiring that the information be supplied, either by the witness informing himself or by the respondent producing the information through another witness. If the applicant completes its cross-examination without objection to the testimony given, it is reasonable to assume that it is content to accept the testimony of the particular witness as tendered. And when the respondent completes its evidence, and the case proceeds without objection from the applicant, the reasonable conclusion is that the applicant has waived any right to contend that the respondent has not fulfilled the obligation created by section 1(5) or section [69(13)], as the case may be. It may be noted that there is nothing to prevent an applicant from calling evidence to add to, vary or contradict the testimony of the respondent's witnesses.

The Board expects parties to a hearing to be prepared to fulfill that obligation, even if they have failed to comply with production orders made prior to the hearing. This is especially true when responding parties have objected to an adjournment sought the day before and indicated that they wished to proceed. Further, since there were still issues about the production of documents, there was the potential for further delay later on in the proceedings. In the absence of any other form of discovery process, the union is still unaware what documents exist. Even if it was conceded that certain documents exist, it would still be difficult to argue the issue of relevance. If the matter were adjourned at that point, with yet another production order having been made, there was still a possibility that in the course of cross-examination of the responding parties' witnesses, the union would discover the existence of more documents, require further production, necessitating further adjournments. For these reasons, I directed the responding parties to call their evidence.

15The responding parties first called Paul Skov. Counsel conducted his examination-in-chief. Following the examination-in-chief, and notwithstanding the concerns expressed above, counsel for the applicant then renewed her request for production of documents and an adjournment to give her an opportunity to examine those documents before she commenced cross-examination. In the face of that equally adamant objection to proceeding, I commenced a discussion in the hearing with counsel for the responding parties, assisted by Mr. Skov, who was still on the stand, about what documents actually existed, and how they might be relevant to the issues in this proceeding. I directed the responding party to produce to the applicant the following:

(a) Such payroll records as still exist with respect to employees of S & S Glass & Aluminum (1993) Ltd. and S & S Glass & Renovators.

(b) Payroll records for employees other than Dave Skov of S & S Glass (2000) Inc. from the date of its incorporation to March 29, 2001.

(c) All contracts, subcontracts and purchase orders in respect of all work performed by any of the three responding parties at any time after August 12, 1993.

This list of documents is considerably smaller than the documents requested, primarily because the other documents do not exist. Nonetheless, at this point, counsel for the applicant stated that she wished to examine these documents before commencing her cross-examination and renewed her request for an adjournment. The proceeding was adjourned at that point.

16Accordingly, Mr. Skov is not yet in cross-examination. Issues may arise from the production of the documents or from further discussion or refinement of the issues between counsel. The applicant will therefore have the right, if so advised, to continue the examination-in-chief of Mr. Skov to address new matters or to supplement matters already covered with additional evidence when this matter resumes for hearing.

New Hearing Dates

This matter will resume on September 12 & 13, 2001 at a location to be set by the Registrar.

"David A. McKee"

for the Board