Universal Workers Union, Labourers' International Union of North America, Local 183 v. Ferreira

Universal Workers Union, Labourers' International Union of North America, Local 183 v. Dionisio et al. [Indexed as: Universal Workers Union, Labourers' International Union of North America, Local 183 v. Ferreira]

95 O.R. (3d) 118

Court of Appeal for Ontario,

Cronk, Gillese and G.J. Epstein JJ.A.

February 19, 2009

Arbitration -- Arbitration agreement -- Independent hearing officer hearing charges of breaches of union constitution by union officers, finding that allegations were made out and imposing penalties -- Officers not taking part in process and disputing jurisdiction of independent hearing officer -- Proceedings conducted by independent hearing officer not constituting arbitrations -- Article of union constitution setting out procedure for dealing with disciplinary matters not constituting agreement to submit such matters to arbitration.

A dispute arose between Local 183 and its parent which resulted in Local 183 being placed under trusteeship and its executive board (including the respondents) being removed from office. The trustee preferred charges against the respondents for violating the Local Constitution and the International Union Constitution. Pursuant to art. XII of the Local Constitution, charges are to be heard by members of the executive board, and if the executive board is disqualified, the general president is to refer the charges to an independent hearing officer ("IHO"). An IHO held hearings in respect of the charges. The respondents, disputing the jurisdiction of the IHO and expressing serious concerns about the fairness of the hearings, did not participate. The IHO found that the respondents had breached their duties under the Constitutions and ordered them to make certain payments to Local 183. When they did not make those payments, Local 183 brought applications under s. 50 of the Arbitration Act, 1991, S.O. 1991, c. 17 to enforce the IHO's decisions as arbitration awards. The applications were granted. The application judge found that by becoming union members, the respondents were bound by the terms of the Local Constitution and under its terms, they impliedly agreed to be bound by an "arbitration process" that yielded [page119] the IHO's decisions. He concluded that there was an arbitration agreement and that the IHO's decisions consitituted arbitration awards which were enforceable pursuant to s. 50 of the Act. The respondents appealed.

Held, the appeal should be allowed.

The proceedings conducted by the IHO were not arbitrations and they were not conducted pursuant to an arbitration agreement as that term is defined in the Arbitration Act. There are two concepts which are characteristic of arbitration: the existence of a dispute between the parties, and the duty or intent of the parties to submit that dispute to arbitration. The matter that the IHO was called on to decide was not a dispute between the parties. Rather, he was charged with determining whether the allegations of breaches of the Constitutions were true and, if so, what punishment should follow. It was not the duty or intent of the parties to submit the matter to arbitration. The respondents did not agree that the matter should be decided by the IHO. The application judge erred when he concluded that the respondents agreed to be bound by the decisions of the IHO by virtue of having become union members. When the respondents became members of Local 183, they had no choice but to abide by the Local Constitution, including the internal disciplinary hearing provisions contained in art. XII, if they wanted to work as construction labourers. An agreement to abide by a disciplinary process contained in a union constitution does not amount to evidence of an intention to submit disputes to arbitration. Article XII of the Local Constitution is not an agreement to submit a dispute that has arisen under the Constitution to arbitration. It is an internal mechanism by which disciplinary matters that arise under the terms of the Local Constitution may be resolved without recourse to outside bodies. Internal disciplinary matters are not "disputes" within the sense of the word as it is used in the definition of arbitration agreement in s. 1 of the Arbitration Act.

APPEAL from the judgments of Perell J. of the Superior Court of Justice dated December 12, 2007 granting applications to enforce decisions of the independent hearing officer as arbitration awards.

Cases referred to Downey v. Leitner, [2004] O.J. No. 4466, 2004 CanLII 34927 (S.C.J.), apld Other cases referred to Berry v. Pulley, [2002] 2 S.C.R. 493, [2002] S.C.J. No. 41, 2002 SCC 40, 211 D.L.R. (4th) 651, 82 C.L.R.B.R. (2d) 161, 287 N.R. 303, J.E. 2002-812, 158 O.A.C. 329, 11 C.C.L.T. (3d) 157, [2002] CLLC Â220-022, 20 C.P.C. (5th) 205, 113 A.C.W.S. (3d) 186; Birch v. Union of Taxation Employees, Local 70030 (2008), 93 O.R. (3d) 1, [2008] O.J. No. 4856, 2008 ONCA 809, 243 O.A.C. 6, [2009] CLLC Â220-006; Borowski v. Canada (Attorney General), 1989 CanLII 123 (SCC), [1989] 1 S.C.R. 342, [1989] S.C.J. No. 14, 57 D.L.R. (4th) 231, 92 N.R. 110, [1989] 3 W.W.R. 97, J.E. 89-499, 75 Sask. R. 82, 47 C.C.C. (3d) 1, 33 C.P.C. (2d) 105, 38 C.R.R. 232, 7 W.C.B. (2d) 61; Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, J.E. 2002-617, 219 Sask. R. 1, 10 C.C.L.T. (3d) 157, 30 M.P.L.R. (3d) 1, 112 A.C.W.S. (3d) 991; MacDougall v. MacDougall, 2005 CanLII 44676 (ON CA), [2005] O.J. No. 5171, 262 D.L.R. (4th) 120, 205 O.A.C. 216, 144 A.C.W.S. (3d) 103 (C.A.); Precision Drilling Corp. v. Matthews Equipment Ltd., [2000] A.J. No. 865, 2000 ABQB 499, [2000] 10 W.W.R. 498, 83 Alta. L.R. (3d) 157, 267 A.R. 286, 8 B.L.R. (3d) 34, 98 A.C.W.S. (3d) 967; Sport Maska Inc. v. Zittrer, 1988 CanLII 68 (SCC), [1988] 1 S.C.R. 564, [1988] S.C.J. No. 19, 83 N.R. 322, J.E. 88-463, 13 Q.A.C. 241, 38 B.L.R. 221, 9 A.C.W.S. (3d) 234; Zurich Life Insurance Co. of Canada v. Davies, 1981 CanLII 68 (SCC), [1981] 2 S.C.R. 670, [1981] S.C.J. No. 111, 130 D.L.R. (3d) 748, 39 N.R. 457, J.E. 82-23, [1982] I.L.R. Â1-1471 at 635, 12 A.C.W.S. (2d) 92

Statutes referred to Arbitration Act, 1991, S.O. 1991, c. 17, ss. 1, 2(1), 11(1), 50 [as am.], (1), (3) [as am.], (7) [page120]

Paul V. McCallen, for appellants. Christopher Wirth and Andrea Gonsalves, for respondent.

The judgment of the court was delivered

[1] GILLESE J.A.: -- Is a hearing held pursuant to a union constitution an arbitration? Is the decision of a hearing officer, in such a proceeding, capable of being enforced through the courts as an arbitration award? These appeals address those questions.

Background

[2] There is a long history of animosity between Universal Workers Union, Labourers' International Union of North America, Local 183 ("Local 183") and its international trade union parent, the Labourers' International Union of North America ("LIUNA"). The long-standing dispute centers on Local 183's autonomy and jurisdiction. A rival trade union, the Canadian Construction Workers Union ("CCWU"), has recently obtained certification status. There is fierce and direct competition between the CCWU and LIUNA for the right to represent workers in the construction industry. Many CCWU members are former members of Local 183.

[3] Messrs. Dionisio, Dias and Ferreira (the "appellants") are members of the CCWU. They were previously members of LIUNA and of Local 183. In addition, Dionisio and Dias had been members of Local 183's executive board -- Dionisio served as the business manager and Dias as the secretary-treasurer. Ferreira had been employed by Local 183 as a business representative.

[4] Local 183 is governed by the International Union Constitution and the Uniform Local Union Constitution (the "Local Constitution") (together the "Constitutions"). The Local Constitution is uniform to all local unions in LIUNA; no individual local union can amend or alter the Local Constitution. Pursuant to art. III, s. 3(b) of the Local Constitution and to the oath of office provided for in art. XIII of the Local Constitution, the appellants agreed to abide by the Constitutions, and all the rules, regulations, policies, practices and lawful orders and decisions made pursuant to them. [page121]

[5] The Constitutions are augmented in Canada by the Canadian Ethical Practices Code (the "CEPC"), a document prepared by LIUNA. Article 19 of the CEPC provides that it prevails over any of the terms of the Constitutions with which it conflicts.

[6] LIUNA investigated the affairs of Local 183 and took steps to have it placed in a trusteeship. In April 2006, Canadian Independent Hearing Officer Brian Keller concluded that it should be placed in trusteeship. LIUNA then took the matter to the Ontario Labour Relations Board (the "Board") and, in a decision dated June 12, 2006, the Board held that LIUNA had established just cause to place Local 183 under trusteeship. It also ordered that "[n]o action shall be taken by LIUNA to suspend or expel any of the present officers and/or staff of Local 183 from membership in Local 183 and LIUNA without leave of the Board".

[7] As a result of Local 183 being placed under trusteeship, the then existing executive board of Local 183, which included Dionisio and Dias, was removed from office. Mr. Rick Weiss was appointed trustee for Local 183.

[8] On August 2, 2006, Weiss preferred charges against Dionisio and Dias (and others) for violating the Constitutions by their acts in connection with an alleged scheme to divide $5 million of funds from Local 183.

[9] On September 18, 2006, Weiss preferred charges against Ferreira for violating the Local Constitution based on allegations that Ferreira misled a Local 183 member into believing he was still a business representative after his employment at Local 183 had been terminated. At the hearing, similar allegations were made in relation to a second member. In both instances, it was alleged that as a result of Ferreira's actions, the members were prevented from gaining employment for extended periods of time and suffered a loss of income.

[10] Pursuant to art. XII, s. 3 of the Local Constitution, charges are to be heard by the members of the executive board. However, if the executive board is disqualified, the general president is to refer the charges to an independent hearing officer for decision and disposition or to the appropriate District Council for trial. As Local 183 was in trusteeship at the time the charges were preferred with the result that there was no executive board, the general president referred the charges to Canadian Independent Hearing Officer Barry Stephens.

[11] CIHO Stephens held a hearing in respect of the charges against Dionisio and Dias on October 28, November 9 and November 18, 2006, and on the charges against Ferreira on January 21 and January 30, 2007. [page122]

[12] Although the appellants each received notice of the proceedings before CIHO Stephens, they did not attend because, among other reasons: (1) they claimed that pursuant to the Board decision, the Board retained jurisdiction over disciplinary matters involving Local 183; and (2) they had serious concerns about the fairness of the hearings before CIHO Stephens. The hearings proceeded in their absence.

[13] On January 5, 2007, CIHO Stephens released his decision with respect to Dionisio and Dias. He found that $5 million belonging to Local 183 had been placed in trust with a law firm in 2003. That law firm had returned the money to Local 183 and it had then been transferred to a second law firm to be held in trust. The money had been earmarked to cover legal costs related to disputes that might develop between Local 183 and its parent, LIUNA. CIHO Stephens found that there was nothing improper in establishing the fund because such disputes occur and where resolution is through litigation, the associated legal expenses are legitimate. However, he also found that, unbeknownst to Local 183's general membership, the retainer agreements with both law firms stipulated that if Dionisio and Dias were removed from their positions on Local 183's executive board by LIUNA, control over the $5 million fund would leave Local 183 and pass to them personally, with Dionisio having primary control. Accordingly, he held that Dionisio and Dias had breached their duties under the Constitutions. He suspended Dionisio's membership for one year and Dias' membership for six months. He also ordered Dionisio and Dias to each pay $10,000 to Local 183. These were the costs that CIHO Stephens found were associated with the two retainer agreements and the efforts necessary to secure the return of the money.

[14] On March 7, 2007, CIHO Stephens made another order in which he expelled the appellants, and others, from membership in LIUNA and in Local 183 because of their roles in establishing a rival union, the CCWU. He found that all of the charged members had engaged in concerted, coordinated activity, in an open and public manner, to raid the membership of Local 183. He recognized that the individuals in question had the right, in Ontario, to work on behalf of another union but held that they could not continue as LIUNA members while engaging in activities that undermined and weakened the union, and eroded the bargaining strength and security of those members who remained loyal to LIUNA. He concluded that the actions of the charged members were contrary to the Local Constitution and the CEPC. [page123]

[15] On March 26, 2007, CIHO Stephens released his decision with respect to Ferreira. He found that Ferreira had breached the Local Constitution. He suspended Ferreira from membership for six months and ordered him to pay a fine to Local 183 equal to the amount of income lost by the two members. He calculated the amount to be $26,838.88. While the money was to be paid to Local 183, he ordered that it be paid in trust and Local 183 was to then pay the money to the injured members.

[16] Under the Local Constitution, the appellants had rights of appeal they did not exercise.

[17] The appellants have not paid the amounts that CIHO Stephens ordered them to pay.

[18] Local 183 brought applications under s. 50 of the Arbitration Act, 1991, S.O. 1991, c. 17 (the "Arbitration Act") in which they sought to enforce the decisions rendered by CIHO Stephens on January 5, 2007 and March 26, 2007 (the "Stephens Decisions") as arbitration awards. The application in respect of Dionisio and Dias was heard as a companion case with the application in respect of Ferreira by Perell J. on December 7, 2007.

[19] In judgments dated December 12, 2007, the applications judge granted the applications (the "Judgments"). He reasoned that by becoming union members, the appellants were bound by the terms of the Local Constitution and under its terms, they impliedly or implicitly agreed to be bound by an "arbitration process" that yielded the Stephens Decisions. He thus concluded that there was an arbitration agreement and that the Stephens Decisions constituted arbitration awards which are enforceable pursuant to s. 50 of the Arbitration Act. By orders dated January 31, 2008 [[2008] O.J. No. 5671 (S.C.J.)], the applications judge awarded costs of $8,900 to Local 183 for each of the applications (the "Costs Orders").

[20] Dionisio, Dias and Ferreira appeal. They contend that the applications were part of continuing legal proceedings designed to hinder the growth of the CCWU. They ask this court to set aside the Judgments and dismiss the applications. They also seek leave to appeal the Costs Orders.

The Decision Below

[21] The applications judge set out the four elements or indicia of an arbitration identified by the Supreme Court of Canada in Sport Maska Inc. v. Zittrer, 1988 CanLII 68 (SCC), [1988] 1 S.C.R. 564, [1988] S.C.J. No. 19: (i) an identified dispute between the parties (i.e., a question to be resolved); [page124] (ii) the remission of the dispute to a person who is to resolve it by exercising a judicial function; (iii) the parties having an opportunity to present evidence or submissions in respect of their positions as to how the dispute should be resolved; and (iv) the parties having agreed to be bound by the decision.

[22] At para. 24 of his reasons, he stated:

In my opinion, the first three elements are satisfied in the case at bar, and the problematic part of Local 183's argument is whether the fourth element, namely, the parties having agreed to the decision, is present. It is a fundamental element of an arbitration that the parties have an agreement to submit their dispute to the arbitrator. For there to be an arbitration award, there must first be an arbitration agreement and that element is problematic in the case at bar.

[23] He held that to establish the fourth element, Local 183 had to show: first, that there was a contract between Local 183 and the appellants; and, second, that the contract expressly or impliedly included an arbitration agreement.

[24] In deciding the first matter, the applications judge relied on the following statement from Berry v. Pulley, 2002 SCC 40, [2002] 2 S.C.R. 493, [2002] S.C.J. No. 41, at para. 48:

. . . the time has come to recognize formally that when a member joins a union, a relationship in the nature of a contract arises between the member and the trade union as a legal entity. By the act of membership, both the union and the member agree to be bound by the terms of the union constitution, and an action may be brought by a member against the union for its breach. (Emphasis omitted)

[25] Based on this passage, the applications judge held that by joining the union, the appellants became bound by the terms of the Local Constitution and that a contractual relationship between Local 183 and the appellants arose.

[26] With respect to the second matter, the applications judge noted that the Local Constitution did not expressly stipulate that disputes between them were to be resolved by arbitration. However, he concluded that the process in the Local Constitution which led to the hearings before CIHO Stephens amounted to an arbitration. He reached this conclusion based on a consideration of the non-exhaustive list of factors set out by L'Heureux-Dubé J. in Sport Maska, at pp. 589 and 602-605 S.C.R., which may be considered when determining whether the parties to a dispute intended to empower a third party to arbitrate the dispute. Those factors include: [page125] -- the language used by the parties in the agreement; -- the similarity between the designated process and the judicial process; -- the nature of the task assigned to the third party and the extent to which the task is to decide between adversarial positions; -- the presence of independence and impartiality in the decision-making process; and, -- the degree of finality of the outcome.

[27] As the appellants had bound themselves to the terms of the Local Constitution, the applications judge concluded that the appellants had bound themselves contractually to the arbitration process and, thus, had agreed to be bound by the decisions rendered by CIHO Stephens.

Issues

[28] The central issue in this appeal is whether the applications judge erred in concluding that the Stephens Decisions are arbitration awards capable of being enforced pursuant to s. 50 of the Arbitration Act. Before turning to the issue, I will address the standard of review that applies to the decision below.

The Standard of Review

[29] The standard of review on questions of law is correctness whereas the palpable and overriding standard of review applies to pure questions of fact. For questions of mixed law and fact, the standard of review lies on a spectrum between the two standards: see Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, at para. 36.

[30] The parties agree that the essence of the decision below -- namely, that the Stephens Decisions are arbitration awards capable of enforcement in the courts pursuant to the Arbitration Act -- is a question of mixed law and fact. They disagree, however, on where on the spectrum that decision lies.

[31] In my view, a standard of review closer to the correctness end of the spectrum applies. The decision in question is based on the interpretation of a contract (the Local Constitution), and the Arbitration Act. Thus, it depends far more on the application of legal principles than on findings of fact based on evidence introduced by the parties. As I explain below, the errors made below are errors in principle. They include a failure to follow proper principles of contractual interpretation when construing the Local Constitution. In cases dealing with the interpretation of contracts, the failure to follow proper [page126] principles of contractual interpretation is an error of law subject to the standard of correctness: see MacDougall v. MacDougall, 2005 CanLII 44676 (ON CA), [2005] O.J. No. 5171, 262 D.L.R. (4th) 120 (C.A.), at para. 30.

Analysis

[32] Section 50(1) of the Arbitration Act reads as follows:

50(1) A person who is entitled to enforcement of an award made in Ontario or elsewhere in Canada may make an application to the court to that effect.

[33] Except in certain situations, none of which are relevant to the present appeals, s. 50(3) of the Arbitration Act makes it mandatory that the court give a judgment enforcing an arbitration award.

[34] The combined effect of s. 50(1) and (3) is to require the court, in the circumstances of these cases, to give a judgment enforcing the Stephens Decisions, so long as those decisions are arbitration awards. To determine whether the Stephens Decisions are arbitration awards, one must turn to s. 2(1) of the Arbitration Act. Section 2(1) reads as follows:

2(1) This Act applies to an arbitration conducted under an arbitration agreement unless, (a) the application of this Act is excluded by law; or . . .

[35] On a plain reading of s. 2(1), so long as the application of the Arbitration Act is not excluded by law, it applies if (1) there was an arbitration and (2) the arbitration was conducted under an arbitration agreement. Arbitration agreement is defined in s. 1 of the Arbitration Act as

. . . an agreement by which two or more persons agree to submit to arbitration a dispute that has arisen or may arise between them;

[36] In the present case, there is no suggestion that the Arbitration Act was excluded by operation of law. Thus, the applications judge was required to determine whether the proceedings conducted by CIHO Stephens were arbitrations and, if so, whether they had been conducted pursuant to an arbitration agreement, as that term is defined in the Arbitration Act.

[37] I stress that both elements must be considered because the applications judge appears to have conflated the two. Recall that as part of the applications judge's inquiry into whether the proceedings conducted by CIHO Stephens were arbitrations, he asked whether the parties had agreed to be bound by the [page127] decisions of CIHO Stephens. However, instead of making that determination, he considered whether the Local Constitution included an arbitration agreement. When he concluded that it did, he inferred that the appellants had agreed to be bound by any decision that was rendered pursuant to the process contained in the Local Constitution that had led to the hearings conducted by CIHO Stephens. While it may be that in certain instances an agreement to abide by a decision can be found in the arbitration agreement, given that s. 2(1) of the Arbitration Act requires both elements in order for it to apply, it is preferable to consider and make a determination on each element separately.

[38] In any event, as I will now explain, neither element required by s. 2(1) is present in this case.

Were the proceedings conducted by CIHO Stephens arbitrations?

[39] In Sport Maska, at p. 585 S.C.R., the Supreme Court of Canada stated:

The common law has in fact developed two concepts which it regards as characteristic of arbitration: the existence of a dispute and the duty or intent of the parties, as the case may be, to submit that dispute to arbitration.

[40] Was there a dispute between the parties? As I explain more fully in the following section, in my view, the matter that CIHO Stephens was called on to decide was not a dispute between the parties. Rather, he was charged with determining whether allegations that members of the union had breached the Constitutions or CEPC had been proven and, if so, what punishment should follow such a determination. In the case of Dionisio and Dias, it will be recalled, the allegation was that they had participated in a scheme to divide $5 million from Local 183. The allegation against Ferreira was that he had misled members of Local 183 in respect of the role that he played within the local.

[41] In Downey v. Leitner, [2004] O.J. No. 4466, 2004 CanLII 34927 (S.C.J.), Whitten J. was required to consider the disciplinary process as set out in a union constitution in the context of a motion to strike portions of a statement of defence. The defendant argued that the union constitution was an arbitration agreement under the Arbitration Act. In rejecting this argument, at para. 8 of the reasons, Whitten J. stated:

Participation in a discipline process by filing or answering a complaint is not as a function of an agreement between the parties; it is solely a discipline or offence finding exercise. [page128]

[42] I agree with this characterization.

[43] What of the second characteristic of an arbitration? Was it the intent or duty of the parties to submit the matter to arbitration? As a purely factual matter, the answer to that question must be "no". The appellants did not agree that the matter should be decided by CIHO Stephens, and they said so. They disputed his jurisdiction, arguing that the allegations were matters for the Board to decide. They also questioned CIHO Stephens' ability to conduct a fair and impartial hearing and gave cogent reasons for that concern. Finally and very significantly, in my view, the applications judge erred when he concluded that the appellants agreed to be bound by the decisions of CIHO Stephens by virtue of having become union members. When the appellants became members of Local 183, they had no choice but to abide by the Local Constitution, including the internal disciplinary hearing provisions contained in art. XII, if they wanted to be able to work as construction labourers. As I explain more fully below, an agreement to abide by a disciplinary process contained in a union constitution does not amount to evidence of an intention to submit disputes to arbitration.

Is the Local Constitution an arbitration agreement?

[44] As previously mentioned, the applications judge held that when the appellants became members of the union, they became bound by the Local Constitution and a relationship in the nature of a contract arose between the member and Local 183. I agree: see Berry v. Pulley, at para. 48. However, I do not agree that the Local Constitution contains an arbitration agreement as that term is defined in the Arbitration Act.

[45] Arbitration agreement, it will be recalled, is defined in s. 1 as "an agreement by which two or more persons agree to submit to arbitration a dispute that has arisen or may arise between them". As the applications judge correctly noted, there is no express agreement in the Local Constitution that disputes which arise under its terms are to be decided by arbitration. Accordingly, it falls to be determined whether such an agreement can be implied.

[46] Before turning to art. XII of the Local Constitution -- the only provision in the Local Constitution from which such an implication might be drawn -- it is useful to make some general observations about the Local Constitution. The Local Constitution is a standard form agreement by which each affiliated local union of LIUNA must abide. Neither a local union nor a person wishing to become a member of the union has any power to change the terms of the Local Constitution. The relationship [page129] between union and member is "in the nature of a contract"[^1] because "it is unlike a typical commercial contract".[^2]

[47] Although for many purposes a union constitution may be treated as a contract, when considering its fundamental nature for the purpose of determining whether it is an arbitration agreement, it is important to keep in mind the caution expressed by the Supreme Court in saying that it is "in the nature of a contract". That caution flows, in part, from the fact that union constitutions are adhesion contracts. Those who join the union have no bargaining power to affect the terms of membership and, in many situations, membership is a prerequisite to employment, leaving the individual with little choice but to accept the constitution and its terms.[^3] Consequently, if there is any ambiguity in the Local Constitution, it should be resolved in favour of the appellants on the basis of the principle of contra proferentem: see Zurich Life Insurance Co. of Canada v. Davies, 1981 CanLII 68 (SCC), [1981] 2 S.C.R. 670, [1981] S.C.J. No. 111, at p. 674 S.C.R.

[48] The unique character and context of the Local Constitution, as well as the nature of the questions in issue, will necessarily inform its construction in any given situation: see Berry v. Pulley, at para. 49. Consequently, it is useful to bear in mind that the Local Constitution serves two purposes. The first is to establish the relationship between the local union and its parent, LIUNA. The second is to set out the rules, rights, obligations and powers of the local and of those who become its members.

[49] Bearing in mind these considerations, I turn to art. XII, the provision under which Weiss preferred charges and LIUNA's general president referred the charges to CIHO Stephens for decision and disposition. The full text of art. XII is contained in Schedule "A" to these reasons. The most critical parts of art. XII, for purposes of this analysis, read as follows:

ARTICLE XII Charges, Trials and Appeals

Section 1. An officer or member in good-standing may prefer charges against any other officer or member of the Local Union, by filing written charges in duplicate with the Recording Secretary of the Local Union. These charges must be signed by the person preferring the charges and indicate the provisions of the Constitution to be relied upon, or the agreement or rule [page130] alleged to have been violated, and must set forth the specific violation or wrong charged and the date on which it allegedly occurred. . . .

Section 2. The Recording Secretary shall promptly . . . set a date for a hearing and trial on said charges. Immediately thereafter, a copy of the charges shall be mailed to the last-known address of the accused. . . .

Section 3. The members of the Executive Board of the Local Union shall constitute the Trial Board; except that neither the charging party nor the accused nor any member directly interested or involved in the charges may sit as a member of the Trial Board. . . . . .

Where the entire Executive Board of a Local Union appears to be disqualified, the matter may be referred to the General President who shall be entitled to investigate to determine whether such disqualification exists. Upon a finding of disqualification, the General President shall have discretion to assume original jurisdiction over such charges, in which case the matter shall be referred to the Independent Hearing Officer to hear such charges for decision and disposition; or, in the General President's discretion, the charges may be referred to the appropriate District Council for trial. . . . . .

Section 4. The hearing and trial shall be conducted in an orderly, fair and impartial manner and should assure the full presentation of all the facts to the Trial Board.

The burden of proof shall be on the charging party. If the charging party fails to appear, the charges shall be dismissed. If the accused fails to appear, the Trial Board shall proceed with the hearing and receive all the facts and evidence available.

The charging party shall first present evidence to substantiate the charges. The accused shall have the right to be present throughout the trial and to cross-examine the charging party and any of the charging party's witnesses upon completion of their testimony.

After the evidence in support of the charges has been received, the accused shall present the defense. The charging party shall have the right to cross-examine the accused and any of the accused's witnesses upon completion of their testimony.

[50] Is art. XII an agreement "to submit to arbitration a dispute that has arisen or may arise" under the Local Constitution? In my view, it is not. On a plain reading of art. XII, it establishes a process by which disciplinary matters and/or alleged offences are resolved. Further, I do not accept that the appellants agreed "to submit to arbitration" such matters. They agreed to be bound by a process should it be alleged that they had contravened the Constitutions or the CEPC.

[51] Consider the language used in art. XII. "Charges" are to be "preferred" against an "accused" and must include the provisions alleged to have been "violated" (s. 1). A "hearing and trial" date is to be set (s. 2). The burden of proof is on the "charging [page131] party" and the "accused" has the right to be present throughout the trial and, if present, "shall" present a "defense" (s. 4). The process described in s. 4 is more akin to that in a criminal or quasi-criminal trial than it is to the conduct of an arbitration. (Section 7 goes on to provide a right of appeal to the "Appellate Officer of the International Union".)

[52] As I have said, the language used in art. XII is consistent with establishing a process for disciplining offending members and/or offence finding. This view of art. XII is reinforced by reference to one of the purposes of the Local Constitution, which is to regulate the relationship between the local and its members. For a process to be characterized as an arbitration, a formulated or defined dispute must exist between the parties; an unresolved problem or matter about which they disagree will not suffice: see Precision Drilling Corp. v. Matthews Equipment Ltd., 2000 ABQB 499, [2000] A.J. No. 865, 267 A.R. 286 (Q.B.), at para. 22. In my view, internal disciplinary matters are not "disputes" within the sense of the word as it is used in the definition of arbitration agreement in s. 1 of the Arbitration Act.

[53] Further, where as in the present case, there is no executive board, the general president unilaterally chooses to whom the matter is referred and LIUNA pays that person to hear and dispose of the charges. The hallmark of a judicial decision-maker is that he or she is independent and impartial. That requirement is enshrined in s. 11(1) of the Arbitration Act, which provides that an arbitrator "shall be independent of the parties and shall act impartially". Arguably, CIHO Stephens was neither. He was appointed and paid for by one party (LIUNA). The appellants had no say in the choice of hearing officer. And, at least in the eyes of Dionisio and Dias, CIHO Stephens had been involved in prior proceedings involving the appellants. In that regard, Dionisio and Dias wrote in their letter to CIHO Stephens dated January 8, 2007 that CIHO Stephens had participated in the proceedings that resulted in Local 183 being placed in trusteeship.

[54] Finally, art. XVI, s. 3 of the International Union Constitution[^4] expressly limits the ability of members, Local Unions, [page132] District Councils and other subordinate bodies from bringing any action in the courts. This reinforces the notion that the disciplinary provisions in the Local Constitution were intended to be internal in nature.

[55] In the final analysis, based on the language used, the process contemplated in the Local Constitution, and the nature of the relationship between the parties, although the appellants agreed to be bound by the process contained in art. XII, they did not agree to submit disputes to arbitration. Article XII is nothing more or less than what it appears -- an internal mechanism by which disciplinary matters that arise under the terms of the Local Constitution may be resolved without recourse to outside bodies.

Additional Issues

[56] The appellants raised five additional issues which, in light of the foregoing analysis, can be dealt with summarily.

[57] First, the appellants say that by virtue of the Board decision in June 2006, the Board took jurisdiction over all disciplinary matters involving staff and officers of Local 183 while it was in trusteeship. They submit that as the Board had exclusive jurisdiction over the subject matter of the applications, it was not open to the court to decide them. In light of my conclusion in respect of the Stephens Decisions, it is unnecessary to decide this issue and I decline to do so. It is an important issue that is better left to be decided in a case in which it has been fully argued and for which there is an appropriate evidentiary record.

[58] For the same reasons, I would decline to decide the second and third of the additional issues raised by the appellants. Both of these issues are very significant and warrant a full and proper exploration. The second such issue is whether CIHO Stephens had the authority to levy a fine or otherwise make the monetary orders that he did. The third is whether Local 183 had standing under s. 50(1) of the Arbitration Act to bring the applications. It will be recalled that s. 50(1) reads as follows: [page133]

50(1) A person who is entitled to enforcement of an award made in Ontario or elsewhere in Canada may make an application to the court to that effect.

[59] The appellants argue that Local 183 was not a party to the hearing before CIHO Stephens and, therefore, was not a party to his decision. Thus, they contend, Local 183 was not a "person entitled to enforcement of an award made in Ontario" and lacked standing to bring the applications.

[60] Fourth, the appellants say that their expulsion from membership in LIUNA and Local 183 rendered moot the Stephens Decisions and, consequently, the court ought to have declined to decide the applications. The general principle that a court should decline to decide a case that raises merely a hypothetical or abstract question applies when the decision of the court would not have the effect of resolving some controversy which affects, or might affect, the rights of the parties: see Borowski v. Canada (Attorney General), 1989 CanLII 123 (SCC), [1989] 1 S.C.R. 342, [1989] S.C.J. No. 14, at p. 353 S.C.R.

[61] I agree with the applications judge that a live dispute remained between the parties, namely, whether the Stephens Decisions were arbitration awards capable of being enforced by the courts. The fact that the appellants are no longer members of Local 183 or LIUNA does not render that dispute academic. There is no question that the court's decision has a practical effect on the rights of the parties because that decision dictates whether the Stephens Decisions can be enforced as judgments of the court.

[62] The fifth issue raised by the appellants is whether the applications judge erred by failing to consider that there is no contractual relationship between members of a union that arises out of a union's constitution. With respect, I do not see how this issue is relevant to the matters in issue on these appeals.

[63] I would raise two final considerations. First, the Stephens Decisions suspend the appellants from membership[^5] as well as require them to pay moneys. While the requirement to pay money is a remedy that the court has the jurisdiction to grant,[^6] it is not clear to me that it has the jurisdiction to suspend them from membership. It may be that s. 50(7) of the Arbitration Act could [page134] be utilized to deal with this matter;[^7] however, as the parties have not raised this as an issue and it is unnecessary to decide the matter on these appeals, nothing more need be said on the matter. Second, following the hearing of this appeal, the respondent brought to our attention this court's recent decision in Birch v. Union of Taxation Employees, Local 70030 (2008), 93 O.R. (3d) 1, [2008] O.J. No. 4856, 2008 ONCA 809, in which a union sought to enforce, through the courts, fines it had imposed against its members for crossing a picket line. In my view, this appeal differs from Birch in a material respect. The union here is not seeking to enforce a fine but to recognize the Stephens Decisions as arbitration awards. This distinction is relevant for two reasons. First, pursuant to s. 50(3) of the Arbitration Act, so long as none of the exceptions in s. 50(3) apply, once a decision is recognized as an arbitration award, the court has no discretion. It must give a judgment enforcing the award. Second, as I have said, the Stephens Decisions were not limited to imposing "fines" on the appellants. CIHO Stephens also suspended the appellants from membership.

Disposition

[64] Accordingly, I would allow the appeals, set aside the Judgments and Costs Orders, and dismiss the applications. I would award costs of the appeals to the appellants, fixed at $15,000, inclusive of disbursements and GST.

[65] In light of my conclusion on the appeals, it is unnecessary to consider the request to grant leave to appeal the Costs Orders. The appellants are entitled to their costs of the applications. As the appellants Dionisio and Dias were separately represented from Ferreira on the applications, I would award Dionisio and Dias, together, costs of the application fixed at $8,900, inclusive of disbursements and GST. Similarly, I would award Ferreira costs of the application of $8,900, all inclusive.

Appeal allowed. [page135]

SCHEDULE "A"

ARTICLE XII Charges, Trials and Appeals

Section 1. An officer or member in good-standing may prefer charges against any other officer or member of Local Union, by filing written charges in duplicate with the Recording Secretary of the Local Union. These charges must be signed by the person preferring the charges and indicate the provisions of the Constitution to be relied upon, or the agreement or rule alleged to have been violated, and must set forth the specific violation or wrong charged and the date on which it allegedly occurred. Except for good cause, charges must be filed within ninety (90) calendar days of the time that the charging party knew or reasonably should have known of the relevant facts and circumstances giving rise to the charge(s); otherwise, charges filed beyond the ninety (90) calendar day period shall be time barred.

Section 2. The Recording Secretary shall promptly notify the members of the Executive Board that charges have been filed, and after a consultation with them, shall promptly set a date for a hearing and trial on said charges. Immediately thereafter, a copy of the charges shall be mailed to the last- known address of the accused. A written notice of the time and place where the hearing and trial will take place before the Trial Board shall be mailed to the accused and to the charging party not less than seven days nor more than twenty- one days from the date of said hearing and trial.

Section 3. The members of the Executive Board of the Local Union shall constitute the Trial Board; except that neither the charging party nor the accused nor any member directly interested or involved in the charges may sit as a member of the Trial Board.

In such cases, the President of the Local Union shall appoint a substitute or substitutes from the members in good-standing. If the President is to be disqualified, then the Vice-President shall appoint a substitute or substitutes; and if the Vice President is also to be disqualified, then the substitute shall be appointed by the remaining Trial Board members.

Where the entire Executive Board of a Local Union appears to be disqualified, the matter may be referred to the General President who shall be entitled to investigate to determine whether such disqualification exists. Upon a finding of disqualification, the General President shall have discretion to assume original jurisdiction over such charges, in which case the matter [page136] shall be referred to the Independent Hearing Officer to hear such charges for decision and disposition; or, in the General President's discretion, the charges may be referred to the appropriate District Council for trial.

Where the charging party or the accused makes a request for a delay, the Trial Board may grant a postponement, for good cause shown.

Section 4. The hearing and trial shall be conducted in an orderly, fair and impartial manner and should assure the full presentation of all the facts to the Trial Board.

The burden of proof shall be on the charging party. If the charging party fails to appear, the charges shall be dismissed. If the accused fails to appear, the Trial Board shall proceed with the hearing and receive all the facts and evidence available.

The charging party shall first present evidence to substantiate the charges. The accused shall have the right to be present throughout the trial and to cross-examine the charging party and any of the charging party's witnesses upon completion of their testimony.

After the evidence in support of the charges has been received, the accused shall present the defense. The charging party shall have the right to cross-examine the accused and any of the accused's witnesses upon completion of their testimony.

Section 5. The Trial Board shall record minutes of its meetings and proceedings and these minutes, together with any documents submitted, shall constitute the official record of the Trial Board.

Upon conclusion of the hearings, the Trial Board shall consider all of the evidence and argument submitted and proceed to make its findings and decision. It shall prepare a Report of said findings and decision, which shall be signed by all the members of the Trial Board. The Recording Secretary shall forthwith mail a copy of said Report to the charging party and the accused at their last-known addresses.

Section 6. A copy of the Trial Board Report shall be submitted to the next regular meeting of the Local Union. The findings and decision of the Trial Board shall be binding unless and until two-thirds of the members present and voting at said meeting, reverse or modify the findings and decision of the Trial Board. The Recording Secretary shall forthwith mail a copy of said action to the charging party and the accused at their last-known addresses.

Section 7. If either the charging party or the accused is aggrieved, such party may, within thirty days from the date of notice of said action, appeal therefrom to the Appellate Officer of [page137] the International Union by filing such appeal with the Appellate Officer in writing. The appeal shall clearly and specifically set forth the grounds in support of said appeal and shall contain a copy of the findings and decision, and action.

After notice of such appeal from the Appellate Officer, the Local Union shall then submit promptly to the Appellate Officer, the following:

1. Copy of the charges
2. Copy of the notice of hearing
3. Record of the Trial Board hearing
4. Copy of Report of the Trial Board
5. Copy of the notification of the Trial Board's decision
6. Copy of minutes of regular meeting at which the Trial Board reported to the Local Union
7. Copy of notification of Local Union action

If an appeal is seasonably taken, it shall have the effect of staying the decision and sentence of the Trial Board and no fine, suspension or expulsion shall be effective pending the outcome of the appeal, provided, however, that where any officer has been found guilty and suspended from office because of negligence, incompetence or dishonesty in the performance of such officer's duty, such officer shall remain suspended from holding such office pending the decision of the Appellate Officer on the appeal.

Section 8. The matter of conduct of nomination or election of Local Union officers, officials and delegates is not within the jurisdiction of the Local Union Trial Board.

Any member aggrieved with the nomination process must appeal directly to the Special Election Officer prior to the holding of the election. Any member aggrieved with the conduct of the election must protest directly to the Special Election Officer within thirty days after the election. All such protests must clearly and specifically set forth the grounds upon which the appellant shall rely.

Section 9. In jurisdictions where a District Council exists, all charges for violations of matters falling within the jurisdiction of the District Council, such as violations of agreements, working rules, etc., shall be filed with the Secretary-Treasurer of the District Council, which shall have jurisdiction to hear the charges in accordance with the provisions and procedures set [page138] forth in Uniform District Council Constitution Article XII without regard to whether the charging or charged party is an officer or delegate to the District Council.

[^1]: Berry v. Pulley, at para. 48. [^2]: Ibid. [^3]: Ibid., at para. 49. [^4]: Article XVI, s. 3 reads as follows: No member, Local Union, District Council or other subordinate body or officer thereof, shall bring or cause to be brought in any court, whether in law or equity, any action against a Local Union, District Council or the International Union or their officers, representatives or employees, asserting rights set forth in the International Union constitution, the Uniform Local Union constitution, or the Union District Council Constitution as a matter of contract. The sole and exclusive remedy for the enforcement of rights found in this Constitution shall be through procedures contained herein, including provisions relating to charges, trials and appeals. Decisions of the General President or the General Executive Board regarding such constitutional rights or, upon any appeal of the International Union Convention, deciding any such rights are final and binding and not subject to further judicial review. [^5]: In neither decision does CIHO Stephens specify whether he is suspending the appellants from membership in Local 183, LIUNA or both. [^6]: As has been pointed out, however, the power of CIHO Stephens to levy a fine or otherwise make moneyary orders in a live issue. [^7]: Section 50(7) reads as follows: 50(7) If the award gives a remedy that the court does not have jurisdiction to grant or would not grant in a proceeding based on similar circumstances, the court may, (a) grant a different remedy requested by the applicant; or (b) in the case of an award made in Ontario, remit it to the arbitral tribunal with the court's opinion, in which case the arbitral tribunal may award a different remedy.