Court of Appeal for Ontario
Date: July 27, 2018
Docket: C63620 & C63635
Judges: LaForme, Rouleau and van Rensburg JJ.A.
C63620
Between
Sam Caetano, as representative of the members of the United Food and Commercial Workers Canada, Local 175, Region 6 who were employed by the Quality Meat Packers Limited, Toronto Abattoirs Limited, Great Lakes Specialty Meats of Canada and/or any of the Defendants in this Action in 2014
Plaintiffs (Appellants)
and
Quality Meat Packers Holdings Limited, Quality Meat Packers Limited, Toronto Abattoirs Limited, Great Lakes Specialty Meats of Canada Inc., 2268204 Ontario Inc., Two Tecumseth Street Inc., Tasty Chip (2008) Inc., BNJ Cold Storage Inc., Franklyn Bernard Company Limited, 1581337 Ontario Inc., David Schwartz, Franklyn Schwartz, Brian Schwartz and Sheldon Garfinkle
Defendants (Respondents)
C63635
Between
Debbie Abreu, in their personal capacity and as the proposed representative of all non-union terminated employees and retirees of Quality Meat Packers Limited under Rule 10 of the Rules of Civil Procedure, Alex Abreu, in their personal capacity and as the proposed representative of all non-union terminated employees of Toronto Abattoirs Limited and Great Lakes Specialty Meats of Canada Inc., under Rule 10 of the Rules of Civil Procedure
Plaintiffs (Respondents)
and
Quality Meat Packers Holdings Limited, Quality Meat Packers Limited (in bankruptcy), Toronto Abattoirs Limited (in bankruptcy), Great Lakes Specialty Meats of Canada Inc. (in bankruptcy), 2268204 Ontario Inc. (under receivership), Two Tecumseth Street Inc., Tasty Chip (2008) Inc., BNJ Cold Storage Inc., Franklyn Bernard Company Limited, 1581337 Ontario Inc., David Schwartz, Franklyn Schwartz, and Brian Schwartz
Defendants (Appellants)
Counsel
Andrew J. Hatnay, Demetrios Yiokaris and Amy Tang, for the appellants (C63620) and for the respondents (C63635)
Jeffrey E. Goodman, Frank Cesario and Dianne Jozefacki, for the appellants (C63635) and for the respondents (C63620), Quality Meat Packers Holdings Limited, BNJ Cold Storage Inc., Two Tecumseh Street Inc., Tasty Chip (2008) Inc. and David Schwartz
Matthew P. Gottlieb and Brad Vermeersch, for the appellants (C63620) and for the respondents (C63635), Brian Schwartz and Franklyn Bernard Company Limited
Kyla Mahar, for the respondent, 1581337 Ontario Inc.
Heard: January 31, 2018
On appeal from the orders of Justice Edward Belobaba of the Superior Court of Justice, dated March 17, 2017, with reasons reported at 2017 ONSC 1199.
H.S. LaForme J.A.:
OVERVIEW
[1] A family-owned meat processing business went bankrupt in 2014 and some 800 employees were terminated without notice or severance. Two separate actions were commenced on behalf of the terminated employees. The first was brought by Sam Caetano as the "representative" of the 700 or so unionized employees (the "Caetano action"). The second was brought by Debbie Abreu and Alex Abreu as the "proposed representatives" of the 100 or so non-unionized employees (the "Abreu action").
[2] The defendants in both actions are: (i) the bankrupt companies; (ii) the other purportedly related family-owned companies – Quality Meat Packers Holdings Ltd., Two Tecumseth Street Inc., Tasty Chip (2008) Inc., BNJ Cold Storage Inc., Franklyn Bernard Company Limited, 1581337 Ontario Inc.; and (iii) two individuals – David Schwartz and Brian Schwartz. Together, they are alleged to have been the common employer of the terminated employees and thus jointly and severally liable for the unpaid severance.
[3] The defendants in both the Abreu and Caetano actions have not filed a statement of defence. Instead, the non-bankrupt defendants brought two motions under Rule 21 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194:
In the Caetano action, they requested under Rule 21.01(3)(a) that the Caetano action be stayed on the basis of jurisdiction (the "jurisdiction motion"); and
Under Rules 21.01(1)(a) and (b) they requested that the representative elements of the Caetano and Abreu actions be struck because the claims of the individuals sought to be represented are time-barred and thus fail to disclose a reasonable cause of action (the "limitations motion").
[4] On the jurisdiction motion, the motion judge stayed the Caetano action. On the limitations motion, he agreed that the representative aspect of the Caetano action was statute-barred. In contrast, he concluded it was not plain and obvious that the representative aspect of the Abreu action was statute-barred.
[5] In the Caetano action, Caetano appeals, whereas in the Abreu action it is the defendants who appeal. In my discussion below, in both appeals I will refer to the respective parties as Caetano, the Abreus and the Defendants.
[6] For the reasons that follow, I would dismiss the Caetano appeal and allow the Abreu appeal.
DISCUSSION
(1) Caetano Appeal – Jurisdiction
(a) Motion Judge's Reasons
[7] The issue on this motion was whether the Ontario Labour Relations Board ("OLRB") had exclusive jurisdiction to determine the claims asserted in the Caetano action.
[8] The motion judge concluded that the court had no jurisdiction to decide the matter since the essence of the claim - the wrongful dismissal of unionized employees - is subject to the exclusive jurisdiction of the provincial labour relations regime. The collective agreements between the former unionized employees that Caetano purports to represent and the bankrupt employers comprehensively dealt with the terms of employment. As a matter of law, the collective agreements incorporated provincial employment standards law. The collective agreements also set out a detailed dispute resolution procedure that must be followed to resolve grievances arising out of the collective agreements. He found, at para. 21:
The core dispute in Caetano's claim is wrongful dismissal and unpaid severance. The claim is directly connected with their employment at [the bankrupt employers], the terms and conditions of which are governed by comprehensive collective agreements. Since the essential character of the dispute arises out of the interpretation, application, administration or violation of the collective agreements, the dispute falls within the exclusive jurisdiction of an arbitrator and the OLRB.
Accordingly, the motion judge stayed the Caetano action.
(b) Submissions
[9] Caetano argues that the motion judge erred in concluding that he did not have jurisdiction. The Supreme Court in Weber v. Ontario Hydro, [1995] 2 S.C.R. 929 clarified the respective jurisdiction of courts, labour arbitrators, and labour tribunals when dealing with disputes arising from a collective agreement. To determine jurisdiction in this context the court must consider whether the dispute arises from the interpretation, application, administration, or violation of the collective agreement. Caetano submits the motion judge erred in applying these factors.
[10] The collective agreement, Caetano points out, is silent on severance pay. The employees' entitlement to severance is based in the Employment Standards Act, 2000, S.O. 2000, c. 41 (the "ESA"). Further, Caetano and the other unionized employees seek payment of severance pay from third parties to the collective agreement. Therefore, Caetano submits that the essential character of the dispute has nothing to do with the collective agreement — this action is essentially an enforcement action for the severance owing.
[11] Caetano relies on jurisprudence such as Ritchie v. Canadian Airlines International Ltd. (2001), 13 C.P.C. (5th) 368, where the Superior Court applied the test in Weber and declined to dismiss an action for want of jurisdiction. In Ritchie, union members, as a class, claimed unpaid severance pay from companies other than their bankrupt employer. As in this case, the defendant in Ritchie was not a party to the collective agreement. Caetano argues that since the court in Ritchie had jurisdiction over the subject matter of the dispute, the court has jurisdiction in this case.
[12] Caetano also submits that this case is similar to Logue Mechanical Services Ltd. v. UA, Local 787, [2016] O.L.R.B. Rep. July/August 691, in which the OLRB noted that it does not have jurisdiction over enforcement proceedings against related employers when the original employer is bankrupt. Caetano submits that the jurisdiction of the court is clearer in the case at bar for a number of reasons: the businesses are shut down, the property has been sold, there are no employees, and there is no bargaining unit.
(c) Analysis
[13] The motion judge was correct to conclude that he did not have jurisdiction over the Caetano proceeding. He properly conducted the Weber analysis. It is the substance of a dispute that governs this analysis. If "the dispute, in its essential character, arises from the interpretation, application, administration or violation of the collective agreement", the dispute falls within the exclusive jurisdiction of the labour arbitrator: Weber, at p. 957.
[14] The core of Caetano's claim is wrongful dismissal and unpaid severance of unionized employees in the context of a common employer. These claims are directly tied to the employees' employment and the terms and conditions of their employment. These terms and conditions were comprehensively governed by the collective agreement, whether explicitly or through incorporation of provincial employment standards. The types of claims raised by Caetano can be, and have been in the past, resolved within the labour arbitration process.
[15] As explained by the motion judge, Caetano's reliance on Ritchie is misplaced as that case involved a breach of contract claim separate and apart from the collective agreement, not a common employer claim.
[16] Similarly, the decision in Logue does not go as far as Caetano submits. The Chair of the OLRB in Logue was concerned that the declaration the union sought "'smells' too much like interference (if not an attempt to gain a priority outside of the bankruptcy) in the orderly and fair distribution of a bankrupt's property among the creditors of the bankrupt": Logue, at para. 34. Unlike in Logue, Caetano is not making an end-run around the provisions of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, to undermine the orderly distribution of the bankrupts' property to creditors.
[17] Further, the Chair was hesitant to act in Logue as "it is not normally the Board's function to actually enforce … its orders or declarations": Logue, at para. 35. Caetano draws comparisons between this proceeding and enforcement proceedings, but Caetano's statement of claim makes clear that the analogy only goes so far. Caetano seeks wrongful dismissal damages, a common employer declaration, and aggravated and punitive damages. Caetano also makes oppression and conspiracy claims, within the context of the employment relationship, against the Defendants. Unlike in Logue, this is not a proceeding where the OLRB is being asked to essentially enforce its own orders against a defendant.
[18] For these reasons, I would uphold the motion judge's order staying the proceeding on jurisdictional grounds.
(2) Caetano Appeal - Rule 12.08
[19] Given my conclusion on the jurisdiction issue, it is not strictly necessary to decide the Rule 12.08 issue raised by Caetano. However, I believe it is an important question that should be commented on for future consideration.
(a) Motion Judge's Reasons
[20] The issue on the limitations motion was whether – as required under Rules 21.01(1)(a) and (b) – it was plain and obvious that the representative aspects of the two actions were certain to fail because no representation orders were obtained within the two-year limitation period. Indeed, Caetano did not bring a motion for a representation order within the limitation period.
[21] The motion judge, in the alternative to his jurisdiction analysis, concluded that the representative aspect of the Caetano action must be dismissed pursuant to Rule 21.01(1) on the basis that the failure to obtain the required representation order within the two-year limitation period was fatal.
[22] In reaching this conclusion, the motion judge found that Rule 12.08 applied. He noted that while there was no reference to Rule 12.08 in the statement of claim, Caetano agreed in his factum that he proceeded under Rule 12.08.
[23] Focussing on the plain meaning of Rule 12.08, the motion judge interpreted the Rule as follows, at para. 31:
Note the precision in the statutory language: a proposed representative "may be authorized by the court to bring a proceeding on behalf of or for the benefit of all." In my view, this only can be read in one way. A representation order authorizing the plaintiff to commence a representative proceeding under Rule 12.08 must be obtained before the proposed representative proceeding is actually commenced. It is not enough to commence an individual action, add a representative component in the style of cause and then, perhaps years later, seek the required court order. Under Rule 12.08, a court order is needed to authorize the initiation of the representative action. And the initiation of the representative action will only be authorized by the court if the plaintiff can show that "a proceeding under the Class Proceedings Act, 1992 would be an unduly expensive or inconvenient means for determining [his] claim." [Italics in original.]
[24] He also added, at paras. 39-40:
Whether or not the required representation order … must be obtained within an applicable limitation period is a question that does not turn on any notion of "adding parties." Both sides spent some time in their written material and oral submissions advancing or refuting lower-court decisions that appeared to undertake an "added parties" analysis under Rule 5.03 or s. 21(1) of the Limitations Act.
It is important to remember both in the context of class proceedings and representative proceedings that the only "parties" to the action are the certified or court-appointed representative plaintiffs and the named defendants. The class members that are represented under the Class Proceedings Act or the class of persons that is represented under Rules 10.01 and 12.08 are not "parties." It causes unnecessary confusion in the case law to suggest otherwise. [Footnotes omitted.]
[25] As I read the motion judge's reasons, since he did not find a limitations problem based on adding parties under s. 21(1) of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B ("Limitations Act"), he must have concluded that there was a limitations problem based on s. 4 of the Limitations Act, which precludes the commencement of a proceeding in respect of a claim after the second anniversary of the day on which the claim was discovered.
(b) Legal Context
[26] Before turning to the question at hand, I will provide some legal context. I begin by considering the wording of Rule 12.08 and how limitations issues have been dealt with in the context of class actions. Finally, I consider the question at issue – whether a representation order may be obtained after the expiry of the limitation period in the circumstances of this case, or whether it is plain and obvious that such an order is statute-barred.
(i) Rule 12.08
[27] Rule 12.08 states:
Where numerous persons are members of an unincorporated association or trade union and a proceeding under the Class Proceedings Act, 1992 would be an unduly expensive or inconvenient means for determining their claims, one or more of them may be authorized by the court to bring a proceeding on behalf of or for the benefit of all.
[28] There is little reported case law dealing with the application of Rule 12.08. Indeed, the parties did not point to any cases that directly deal with the issue here, namely, whether a representation order can be obtained under Rule 12.08 following the expiry of a limitation period.
[29] However, there are several points worth mentioning about Rule 12.08.
[30] First, Rule 12.08 falls under Rule 12, which is entitled "Class Proceedings and Other Representative Proceedings".
[31] Second, it is engaged where a person or persons seek to bring a claim on behalf of or for the benefit of all members of an unincorporated association or trade union. The rule addresses the problems facing unincorporated associations and trade unions seeking to sue in their own names.
[32] Third, Rule 12.08 is meant to provide for a less costly and more convenient procedure than the Class Proceedings Act, 1992, S.O. 1992, c. 6 ("CPA"). Indeed, in determining whether to authorize a representative action under Rule 12.08, the court will take a similar approach to that taken in determining whether a class action should be certified under the CPA: see Ginter v. Gardon (2001), 53 O.R. (3d) 489 (S.C.), at para. 14; Ottawa (City) Police Assn. v. Ottawa (City) Police Services Board, 2014 ONSC 1584, 55 C.P.C. (7th) 183, at para. 38 (Div. Ct.).
[33] Fourth, the rule is discretionary. One or more members of an unincorporated association or trade union "may be authorized by the court" to bring a proceeding on behalf of or for the benefit of all. Thus, unless and until authorization is granted, no representative proceeding may be brought.
[34] Fifth, the rule is silent on the question of limitation periods.
(ii) Limitation Periods and Class Proceedings
[35] As Rule 12.08 provides an alternative to a representative proceeding under the CPA, it is instructive to consider how the CPA deals with the question of limitation periods.
[36] Section 2(1) of the CPA permits a class member to commence a proceeding on behalf of the class:
One or more members of a class of persons may commence a proceeding in the court on behalf of the members of the class.
[37] Section 20 of the Limitations Act recognizes that a limitation period may be extended, suspended or otherwise varied by or under another Act. Section 28(1) of the CPA does exactly that:
Subject to subsection (2), any limitation period applicable to a cause of action asserted in a class proceeding is suspended in favour of a class member on the commencement of the class proceeding and resumes running against the class member when,
(a) the member opts out of the class proceeding;
(b) an amendment that has the effect of excluding the member from the class is made to the certification order;
(c) a decertification order is made under section 10;
(d) the class proceeding is dismissed without an adjudication on the merits;
(e) the class proceeding is abandoned or discontinued with the approval of the court; or
(f) the class proceeding is settled with the approval of the court, unless the settlement provides otherwise. [Emphasis added.]
[38] Section 28(1) suspends the limitation period from the time the proceeding is commenced, not from the time the proceeding is certified as a class action: Logan v. Canada (Minister of Health) (2004), 71 O.R. (3d) 451 (C.A.).
[39] As noted by Karakatsanis J. in Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, [2015] 3 S.C.R. 801, at para. 175:
Without s. 28 [of the CPA] the commencement of a proceeding by a representative plaintiff would only suspend the limitation period with respect to that plaintiff; the limitation period governing all other potential class members would continue to run during the certification proceedings.
Côté J., who wrote separate reasons, agreed with that statement at para. 74. (See also: Coulson v. Citigroup Global Markets Canada Inc., 2010 ONSC 1596, 92 C.P.C. (6th) 301, at para. 49, aff'd 2012 ONCA 108, 288 O.A.C. 355, at para. 11.)
(c) Submissions
[40] Caetano submits that the motion judge erred in concluding that he relied on Rule 12.08 and that he could only seek a representation order in a future motion under Rule 12.08 and not Rule 10.01. In the circumstances, I need not decide whether Rule 10.01 was available. As I will explain below, the result in the circumstances of this case would be the same under either Rule. Thus, I will proceed on the assumption that Caetano relied on Rule 12.08.
[41] Turning to Caetano's other arguments, he submits that under the Limitations Act, a proceeding need only have been commenced within two years and a representation motion is not a proceeding. He points to Rule 1.03(1), which defines a "proceeding" as an application or action.
[42] In Caetano's view, a court may issue a representation order under Rule 12.08 at any stage of a proceeding, which promotes flexibility and fairness.
[43] In the alternative, he says that s. 28 of the CPA should apply by analogy to suspend the limitation period.
[44] He also argues that a representation order can be made nunc pro tunc.
(d) Analysis
[45] In my view, there are several problems with Caetano's arguments.
[46] First, under Rule 12.08, authorization is required "to bring a proceeding on behalf of or for the benefit of all" members of a trade union or unincorporated association. As I noted earlier, under s. 4 of the Limitations Act, "a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered." Reading Rule 12.08 harmoniously with s. 4, the limitation period does not stop running for the claims of class members until a proceeding has been brought on their behalf and that does not happen unless and until court authorization has been granted under Rule 12.08.
[47] Second, Caetano is effectively arguing that Rule 12.08 suspends the limitation period – that once a proposed representative commences a proposed representative proceeding, the limitation period is suspended on behalf of all members of the trade union or unincorporated association. That, as explained above, is the situation under the CPA where s. 28 expressly suspends any limitation period applicable to a cause of action asserted in favour of class members on the commencement of a proceeding. In contrast, Rule 12.08 is silent on the question of limitation periods and does not purport to extend, suspend or otherwise vary any limitation period applicable to claims asserted in favour of class members.
[48] Third, the Supreme Court's decision in Green supports the view that, without a tolling provision, any limitation period applicable to the claims advanced on behalf of class members continues to run until the court authorizes the claims to be brought by the representative plaintiff: Green, paras. 74, 174-175.
[49] Finally, I would reject the argument that a nunc pro tunc order would be available in the circumstances of this case where leave was not sought prior to the expiry of the limitation period: see Green, at paras. 94-111.
[50] I recognize that a representative action under Rule 12.08 is meant to provide a less onerous and less expensive alternative to bringing a class action and yet a proposed representative plaintiff may feel it is necessary to proceed under the CPA instead of Rule 12.08 to avoid any limitations problems even if it would be more expensive and less convenient to do so. My interpretation, therefore, may seem to be at odds with concerns about expense and convenience. However, as Côté J. observed in Green, at para. 75, "policy concerns, as compelling as they are, do not override the plain meaning of the text and the intent of the Ontario legislature."
[51] In conclusion, even if the Superior Court were the correct forum for pursuing the claims of terminated union members, the representative aspect of the Caetano action would be statute-barred.
(3) Abreu Appeal - Rule 10.01
[52] This appeal by the Defendants focuses on one issue: is it plain and obvious that a representation order cannot be made under Rule 10.01 in respect of the claims of the individuals sought to be represented by the Abreus after the expiry of the limitation period in the circumstances of this case? As I will explain, my answer to this question is yes.
(a) Motion Judge's Reasons
[53] The motion judge concluded that the Abreu action was not statute-barred and could proceed. He reasoned that there was nothing in Rule 10.01 that plainly and obviously required that a motion for a representation order be brought within the two year limitation period when the proceeding within which it was brought was properly commenced within that limitation period. He noted that a Rule 10.01 representation order can only be obtained after the initial proceeding has commenced.
(b) Submissions
[54] The Abreus argue that since Rule 10.01 representation orders are brought within an already commenced proceeding, and the representation order sought does not seek to add new parties, the Limitations Act poses no barrier to a representation order.
[55] They further submit that this court's decision in Lawrence v. International Brotherhood of Electrical Workers, 2017 ONCA 321, 138 O.R. (3d) 129, aff'd 2018 SCC 11, 16 C.P.C. (8th) 1, is authority for permitting a representation order to be made outside of a two year limitation period. The Abreus' additional submissions are similar to those advanced by Caetano and are addressed by my Rule 12.08 analysis above.
(c) Analysis
(i) Can a representation order be granted to add statute barred claims?
[56] Rule 10.01 provides as follows:
In a proceeding concerning,
(a) the interpretation of a deed, will, contract or other instrument, or the interpretation of a statute, order in council, regulation or municipal by-law or resolution;
(b) the determination of a question arising in the administration of an estate or trust;
(c) the approval of a sale, purchase, settlement or other transaction;
(d) the approval of an arrangement under the Variation of Trusts Act;
(e) the administration of the estate of a deceased person; or
(f) any other matter where it appears necessary or desirable to make an order under this subrule,
a judge may by order appoint one or more persons to represent any person or class of persons who are unborn or unascertained or who have a present, future, contingent or unascertained interest in or may be affected by the proceeding and who cannot be readily ascertained, found or served.
[57] In this case, the proceeding does not concern any of the matters listed in (a) to (e). Rather, the Abreus are relying on (f) – that in their motion for a representation order they will be able to persuade a judge that the proceeding concerns "any other matter where it appears necessary or desirable to make an order under this subrule" and that they otherwise meet the criteria for an order to be made. It is apparent that the Abreus seek to rely on Rule 10.01 as a class action alternative.
[58] I note that courts have used Rule 10.01 as a class action alternative. However, the proper scope of Rule 10.01 has not been delineated by this court, and it need not be addressed to determine this appeal. The resolution of the limitations issue is driven by a consideration of what the Abreus are seeking to achieve through this litigation in respect of the claims of other terminated non-union employees of the Defendants. I will explain why such individual claims are already statute-barred, and why a representative order under Rule 10.01 would not avoid this limitation period problem.
[59] First, I agree with both the motion judge and the Abreus that s. 21(1) of the Limitations Act, which prevents adding parties to an existing action after the expiry of a limitation period, has no direct application here. As the motion judge stated at para. 40 of his reasons, "[i]t is important to remember both in the context of class proceedings and representative proceedings that the only 'parties' to the action are the certified or court-appointed representative plaintiffs and the named defendants." The Abreus are not seeking to add plaintiffs. Their argument is that their statement of claim already seeks relief on behalf of the persons they seek to represent under Rule 10.01.
[60] The concern in this case is the application of s. 4 of the Limitations Act:
Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
[61] While the Abreus do not seek to add parties to their action, the question is whether they can assert claims, through the device of a representation order, on behalf of persons who are not plaintiffs in the proceeding, after the limitation period in respect of such claims has already expired. The Abreus' statement of claim seeks termination pay under the ESA and wrongful dismissal damages, as well as common employer and other declarations, and aggravated and punitive damages for themselves. It purports to assert claims for monetary amounts for approximately 125 other non-unionized former employees of the Defendants, relying on Rule 10.
[62] Here it must be recalled that the limitation periods for certain individual claims expired on May 6, 2016, and for others on June 9, 2016. The Abreu action was commenced on May 6, 2016. Although the statement of claim refers to the plaintiffs' status as "proposed representatives" under Rule 10, no motion was brought for a representation order within the two year limitation period applicable to the wrongful dismissal claims.
[63] The Abreus note that a representation order under Rule 10.01 is made "[i]n a proceeding". This is in contrast to the wording of Rule 12.08 which contemplates that proposed representatives will "bring a proceeding on behalf of or for the benefit of all." On this line of reasoning they assert that, since s. 4 of the Limitations Act bars commencing a proceeding, and under Rule 10.01 the proceeding has already begun before a representation order is sought, the limitation period is of no moment.
[64] This court, however, has repeatedly held that parties cannot circumvent the Limitations Act by amending their pleadings to add additional claims: see Frohlick v. Pinkerton Canada Ltd. (2008), 2008 ONCA 3, 88 O.R. (3d) 401; Dee Ferraro Ltd. v. Pellizzari, 2012 ONCA 55, 346 D.L.R. (4th) 624; 1100997 Ontario Limited v. North Elgin Centre Inc., 2016 ONCA 848, 409 D.L.R. (4th) 382. The addition of new statute-barred claims by way of an amendment to a statement of claim is conceptually no different than issuing a new and separate statement of claim that advances a statute-barred claim: Frohlick, at para. 24. An amendment will be statute-barred if, after the expiry of the limitation period, it seeks to advance "a fundamentally different claim based on facts not originally pleaded": North Elgin Centre, at para. 23.
[65] An amendment will also be statute-barred if it seeks to add a new "cause of action": North Elgin Centre, at paras. 19-23, 33. "A cause of action is 'a factual situation the existence of which entitles one person to obtain from the court a remedy against another person'": North Elgin Centre, at para. 19. A new cause of action is not asserted if an amendment pleads an alternative claim for relief from the same facts, or in other words, if the amendment flows directly from the facts already pleaded: see North Elgin Centre, at paras. 20-21; Dee Ferraro, at paras. 13-14.
[66] In this case, the Abreus' statement of claim sets out facts relevant for all 125 non-union employees of the Defendants who were terminated en masse on May 6, 2014 and June 9, 2014. The statement of claim also clearly sets out that it is "a proposed representative action under Rule 10". At first blush, a representation order permitting the Abreus to bring claims on behalf of these employees may not appear to be adding new claims. The facts grounding the representation order have already been pleaded, and the claims advanced on behalf of the potentially represented employees are not fundamentally different than the claims advanced by the Abreus.
[67] The reality however is that, while the claims of other terminated employees are referred to in the statement of claim, those employees are not parties to the proceeding, and their claims cannot be advanced by the Abreus unless or until a representation order is obtained. In the interim, the limitation period in respect of such claims has continued to run. There is no equivalent to s. 28 of the CPA that would toll the operation of the limitation period.
[68] As noted above, representative plaintiffs under s. 2 of the CPA commence proceedings on behalf of the members of the class, and a certification order is sought within the context of that proceeding. Despite a certification motion under the CPA occurring within the context of an already commenced proceeding, individual members of the class require the presence of a tolling provision to maintain their claims beyond applicable limitation periods. The commencement of a class proceeding is not enough on its own: see Green, at para. 175.
[69] Similarly, under Rule 10.01 a representation order is sought within the context of an already existing proceeding, but there is no tolling provision applicable to Rule 10.01. Thus, the logic set out by the Supreme Court in Green applies and the limitation period continues to run for those individuals on whose behalf the Abreus purportedly assert claims. This approach treats limitations issues arising in Rule 10.01 proceedings that are akin to class actions in a manner consistent with Rule 12.08 and CPA proceedings.
[70] Without addressing the question of the various types of proceedings in which a Rule 10 representation order might be available, I note that courts should be cautious to not create limitations issues where none exist. A representation order under Rule 10.01 may be sought in proceedings in a variety of circumstances. In many circumstances limitation period defences may have little or no application, and therefore pose no impediment to the making of a representation order at any stage in the proceedings. Here, however, it is clear that the representation order sought by the Abreus could not have the effect of extending the limitation period for claims against the Defendants that have already expired. It is plain and obvious that the claims would be defeated by the two-year limitation period under the Limitations Act.
(ii) Lawrence
[71] Finally, the Abreus submit that this court's conclusion in Lawrence is authority for a representation order to be made outside the limitation period. I do not agree with this submission.
[72] Ms. Lawrence brought an action for wrongful dismissal against the International Brotherhood of Electrical Workers, Local 773 ("Local 773"). She subsequently added individuals, all directors of Local 773, as defendants. In its statement of defence, Local 773 pleaded that, as a union, it could not be named as a party under the Rights of Labour Act, R.S.O. 1990, c. R.33. Ms. Lawrence successfully moved to amend her statement of claim, after the expiry of the limitation period, to add the individuals as representatives of all the members of Local 773 by way of a Rule 12.07 representation order. Rule 12.07 provides that "[w]here numerous persons have the same interest, one or more of them may defend a proceeding on behalf or for the benefit of all, or may be authorized by the court to do so".
[73] On appeal, this court dismissed Local 773's appeal and upheld the representation order despite the expiry of the limitation period. Writing for the majority, Sharpe J.A. concluded that "the request for a representation order in this case could properly be characterized as a request to 'correct the name of a party incorrectly named' within the meaning of r. 5.04(2)": at para. 27.
[74] As noted by Sharpe J.A., this court explained in Lloyd v. Clarke, 2008 ONCA 343, 52 C.P.C. (6th) 41, at para. 4, "where there is a coincidence between the plaintiff's intention to name a party and the intended party's knowledge that it was the intended defendant, an amendment may be made despite the passage of the limitation period to correct the misdescription or misnomer". Subsection 21(2) of the Limitations Act specifically permits the correction of a misnaming or misdescription of a party after the expiry of a limitation period.
[75] The Supreme Court affirmed the majority's reasoning: Lawrence SCC, at para. 1.
[76] Lawrence has no application to the circumstances of this case. Nor does it provide any general authority for granting a representation order to permit claims to be pursued after a limitation period in respect of such has expired. The case turned on the fact that the union was already named as a defendant (although by law it could not be sued), and that the representation order could be used, in the particular circumstances of the case – where the parties proceeded as though the union had been properly sued - to correct a misnomer.
[77] For these reasons, I would allow this appeal. I would strike references to the action proceeding as a representative action under Rule 10 from the Abreu statement of claim on the basis that the claims of the persons sought to be represented are statute-barred.
DISPOSITION
[78] In the result, I would dismiss the Caetano appeal and award costs to the Defendants (respondents) in the amount of $25,000 inclusive of disbursements and HST. I would allow the Abreu appeal and award costs to the Defendants (appellants) in the amount of $18,500 inclusive of disbursements and HST.
Released: July 27, 2018
"H.S. LaForme J.A."
"I agree. Paul Rouleau J.A."
"I agree. K. van Rensburg J.A."
Footnote
[1] There is no dispute that the plaintiffs and the other former unionized and non-unionized employees in both actions were terminated on May 6, 2014 and June 9, 2014, depending on the location of their employment. There is no dispute that the limitation period for all claims asserted in the statements of claim expired on May 6, 2016 and June 9, 2016, respectively. Specifically, there is no issue that both actions were commenced within the two-year limitation period and are not time-barred as they relate to claims by the plaintiffs in their personal capacities.
