COURT FILE NO.: 298/05
DATE: 20060130
SUPERIOR COURT OF JUSTICE - ONTARIO
(DIVISIONAL COURT)
RE: APPLICATION UNDER the Judicial Review Procedure Act,
in the matter of an Award of Arbitrator issued by the Board of
Arbitration chaired by Elaine Newman, dated March 31, 2004.
between:
SOLIDWEAR ENTERPRISES LIMITED
Applicant
(Responding Party)
- and -
UNION OF NEEDLETRADES, INDUSTRIAL & TEXTILE EMPLOYEES
(UNITE), Local 219
Respondent
(Moving Party)
BEFORE: CHAPNIK, J.
HEARD: January 19, 2006
COUNSEL: David A. Broad and Elizabeth M. Traynor, for the Applicant (Responding Party)
Chris G. Paliare, for the Respondent (Moving Party)
E N D O R S E M E N T
[1] The moving party, UNITE (the “Union”), seeks an order quashing the application of Solidwear Enterprises Limited (“Solidwear”) for judicial review of the Preliminary Award of Arbitrator Elaine Newman (the “Arbitrator”) dated March 31, 2004 on the ground of undue delay.
[2] After hearing counsel’s submissions and reading the materials filed, I dismissed the Union’s motion with reasons to follow. These are those reasons.
[3] It is undisputed that Solidwear did not commence its application for judicial review until July 29, 2005, 16 months after the release of the Arbitrator’s decision; and it did not perfect the application until January 10, 2006, more than 21 months after the issuance of the award. Clearly, the time period is significant and requires some scrutiny.
[4] No statutory limitation period exists within which an application for judicial review must be issued in these circumstances; nevertheless, undue delay may constitute a reason for the court to decline to exercise its discretion to grant a remedy (see Bettes v. Boeing Canada/DeHavilland, [2000] O.J. No. 5413 (Div. Ct.)). When making the determination in a particular case, the court considers the following three factors as set out in Gigliotti v. Conseil d’Administration du College des Grands Lacs (2005), 2005 23326 (ON SCDC), 76 O.R. (3d) 561 (Div. Ct.): the length of the delay, whether there is a reasonable explanation for the delay, and whether any prejudice has been suffered by the respondent or a third party as a result of it.
[5] In a labour relations context, due to the importance of resolving labour disputes in an expeditious manner, these principles have resulted in dismissal of applications for judicial review where there has been a delay of more than 6 months in commencing the application and/or 12 months in perfecting it (see Ontario Public Services Employees Union v. Seneca College of Applied Art & Technology, [2003] O.J. 3962 (Div. Ct.) at para. 5).
[6] The general rationale is that “labour relations delayed are labour relations defeated and denied” (Journal Publishing Co. of Ottawa v. Ottawa Newspaper Guild, Local 205, [1977] O.J. No. 8 (C.A.) at para. 4). At the same time, each case must be viewed within the context of its own peculiar factual matrix. As noted by D. J. M. Brown and The Honourable J. Evans, in Judicial Review of Administrative Action in Canada (Toronto: Canvasback Publishing, 2004) at 3:5310, courts have found delays ranging from 2 to 30 months and longer can be cause to refuse to hear a judicial review application but, on the other hand, delays of up to 15 years have not precluded judicial review.
THE BACKGROUND
[7] In order to properly review the three factors set out in Gigliotti within the contextual background of this particular case, I will briefly summarize the relevant facts:
Solidwear is in the business of the cut, make and trim of fabric into finished garments.
Valleycroft Enterprises Inc. (“Valleycroft”) manufactured fabrics.
Arthur Lee is the director, president and sole shareholder of Solidwear and the president and majority shareholder of Valleycroft.
At all relevant times, the employees of Valleycroft were represented by the Union, and both Valleycroft and the Union were parties to a Collective Agreement.
Valleycroft filed an assignment in bankruptcy on June 28, 2001 at which time the employment of approximately 70 employees was terminated. Solidwear, as the largest single secured and unsecured creditor of Valleycroft, appointed a receiver and manager and Trustee in Bankruptcy for Valleycroft.
The bankrupt estate did not contain sufficient assets to fully repay secured creditors and no funds were available for unsecured creditors.
On December 20, 2001, the Union filed a grievance on its own behalf and on behalf of the employees seeking payment of termination and severance pay for the employees under the Employment Standards Act, R.S.O. 1990, c. E.14 (“ESA”).
On August 27, 2003, the Union referred the grievance to arbitration and the Minister of Labour appointed Arbitrator Elaine Newman to hear and determine the grievance.
At the hearing before Arbitrator Newman on February 6, 2004, no one appeared for Valleycroft; it took the position that the hearing was stayed by virtue of the provisions of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3. The Union took the position that Solidwear is a related employer to Valleycroft and hence, jointly and severally liable for the payment of termination and severance pay under the ESA, but that it does not have status to participate as a full party in the proceedings. Solidwear took the position that, as a purported related employer, it should be entitled to the status of a full party, including the right to assert a preliminary objection to the grievance based on timeliness, stating that the grievance was filed and pursued well outside the time limits prescribed by the Collective Agreement.
Arbitrator Newman released her reasons on March 31, 2004 (the First Preliminary Award), finding in the Union’s favour that Solidwear’s right to participate in the hearing was limited and that defences available to Valleycroft are not available to Solidwear.
Following the release of the First Preliminary Award, Valleycroft retained counsel. On the second day of the arbitration hearing, held July 16, 2004, Valleycroft attempted to raise the timeliness argument. In a Second Preliminary Award, released August 20, 2004, Arbitrator Newman precluded Valleycroft from raising the preliminary issue since it had not participated on the first day of the hearing.
On October 15, 2004, Valleycroft issued a Notice of Application for judicial review of the Second Preliminary Award.
Approximately 9 months later, on July 29, 2005, Solidwear issued the Notice of Application for judicial review of the First Preliminary Award.
On October 25, 2005, Solidwear received the Notice of Listing for Hearing for the Valleycroft application, scheduled for a full day hearing on February 13, 2006.
On November 18, 2005, the Union was served with Solidwear’s Application Record and Factum, asking it to agree to have the Solidwear application heard together with the Valleycroft application.
On January 4, 2006, the Union advised Solidwear by e-mail that it would not agree to have the applications heard together.
The Certificate of Perfection for Solidwear’s judicial review application was served on the Union (respondent in that application) on January 10, 2006, and filed in the Divisional Court on January 11, 2006.
THE LENGTH OF THE DELAY
[8] Solidwear filed its Notice of Application for judicial review 16 months after receiving the First Preliminary Award and 9 months after the issuance of Valleycroft’s Notice of Application. Solidwear admits that the delay in doing so is substantial. It does not agree that the additional 5 months taken to perfect the application on January 10, 2006 was unreasonable or excessive in the circumstances.
EXPLANATION FOR THE DELAY
[9] The explanation for the delay is as follows:
Initially, Solidwear expected Valleycroft would be permitted to make preliminary arguments on its own behalf when it attended on July 16, 2004, the second hearing date.
After the Second Preliminary Award was released on August 20, 2004, Solidwear decided for business reasons to pursue only the judicial review of the Second Preliminary Award, since it was funding the costs of the Trustee in Bankruptcy, counsel for Valleycroft and its own counsel.
Several months after being served with Valleycroft’s Notice of Application in October 2004, Solidwear reconsidered its position and determined it would be advantageous for the court “to have a complete understanding of the combined effect of the two awards”. It instructed its counsel to proceed with the judicial review application of the First Preliminary Award as a companion proceeding to the Valleycroft application.
It is noted that this court in International Union of Elevator Constructors, Local 50 v. Otis Canada Inc., [2000] O.J. No. 1140 (Div. Ct.) exercised its discretion to hear an application for judicial review of a labour relations award after a delay of 15 months without reference to any reason for the delay. See also: Ascott v. Ontario (Ministry of Finance), [2002] O.J. No. 4213 (Div. Ct.).
THE ISSUE OF PREJUDICE
[10] According to the respondent, Solidwear, the issue of prejudice is the critical question in an application of this type. For example, in Seneca College, supra, where there was no actual prejudice, a delay of 19 months did not deprive a litigant of its right to have an application for judicial review determined; the rationale for the imposition of the rigorous standard for timeliness was not present.
[11] The Union insists there has been prejudice since the employees have been deprived of their due monies for several years, and this will be delayed further if the application is allowed to proceed.
[12] The importance of expeditious resolution of most labour disputes, as articulated in Dayco (Canada) Ltd. v. CAW-Canada (1993), 1993 144 (SCC), 102 D.L.R. (4th) 609 (S.C.C.) and other labour relations cases, focuses upon the “infection of discontent” in the workplace, and “emotional and volatile” matters such as wages and benefits, working conditions, hours of work, overtime, job classification and seniority. Such matters can lead to “frustration, hostility and violence”, or long running labour disputes and strikes that are disruptive to society as a whole.
[13] In the instant case, however, there has been no subsisting employment relationship for 4½ years. The issue in Solidwear’s application is not related to working conditions, seniority or collective bargaining. It is a pure question of law as to whether as a purported related employer, Solidwear has the right to raise preliminary arguments at the arbitration of a grievance under a collective agreement to which it is not a party.
[14] Thus, the rationale for imposing rigorous standards for timeliness does not apply. Moreover, Valleycroft’s application for judicial review must be heard prior to the resumption of the arbitration hearing in any event. In the circumstances, I can see no actual prejudice to the Union as a result of the delay.
CONCLUSION
[15] In balancing the various factors, though there has been substantial delay in the bringing of the application, the prejudice incurred is not such that a dismissal of the application is warranted.
[16] I am persuaded that this court ought to deal with this matter on its merits. Accordingly, the motion brought by the Union for an order quashing the application for judicial review of the grievance arbitration award of Arbitrator Elaine Newman dated March 31, 2004 is dismissed, but in the circumstances, without costs.
SOLIDWEAR’S CROSS-MOTION
[17] After hearing argument on Solidwear’s motion for an order directing that its application for judicial review be listed for hearing at the same time or consecutively with Valleycroft’s application for judicial review in Court File No. 542/04, I am satisfied that the order should be granted.
[18] The two applications both arise from the same arbitration hearing, regarding a grievance that relates to the same series of transactions or occurrences.
[19] Clearly, the hearing of both applications at the same time or consecutively, will avoid a multiplicity of proceedings and promote the most expeditious and inexpensive determination of these matters.
[20] The Valleycroft application is scheduled to be heard on February 13, 2006, for a full day. If, as argued by the Union, a new date must be scheduled to accommodate both matters (and as I understand it, dates are available in April 2006), this will cause little or no prejudice to the Union, in the circumstances of this case.
[21] For all these reasons, Solidwear’s motion is allowed. Order to go that the two applications for judicial review be heard together. There shall be no order as to costs.
CHAPNIK, J.
DATE: January 30, 2006```