COURT FILE NO.: CV-10-48496

DATE: 2012/05/08

ONTARIO

SUPERIOR FCOURT OF JUSTICE

BETWEEN:

KELLY CONNERTY Plaintiff – and – DAVE COLES on his own behalf and on behalf of all other members of COMMUNICATIONS, ENERGY AND PAPERWORKERS UNION OF CANADA/SYNDICAT CANADIEN DES COMMUNICATIONS, DE L’ENERGIE ET DU PAPIER and JIM FLING on his own behalf and on behalf of all other members of LOCAL 34 OF COMMUNICATIONS, ENERGY AND PAPERWORKERS UNION OF CANADA/SYNDICAT CANADIEN DES COMMUNICATIONS, DE L’ENERGIE ET DU PAPIER and SUSAN BALLANTYNE and RAVEN, CAMERON, BALLANTYNE & YAZBECK, and JEFF SMITH Defendants

Walter T. Langley, for the Plaintiff

Phillip G. Hunt, for the Defendants, Dave Coles on his own behalf and on behalf of all other members of Communications, Energy and Paperworkers Union of Canada/Syndicat canadien des communications de l’énergie et du papier and Jeff Smith Allan R. O’Brien, for the Defendants, Susan Ballantyne and Raven, Cameron, Ballantyne & Yazbeck Paul Champ, for the Defendants, Jim Fling on his own behalf and on behalf of all other members of Local 34 of Communications, Energy and Paperworkers Union of Canada/Syndicat canadien des communications de l’énergie et du papier

HEARD: April 4, 2012

REASONS FOR DECISION

mARANGER j.

Introduction

[ 1 ] This motion to have the action stayed or dismissed was brought by the defendants Dave Coles on his own behalf and on behalf of all other members of the Communications, Energy and Paperworkers Union of Canada (CEP national), Jeff Smith, and Jim Fling on his own behalf and on behalf of all other members of local 34 of the CEP pursuant to Rule 21 of the Rules of Civil Procedure , R.R.O. 1990, Reg. 194.

[ 2 ] The plaintiff, Kelly Connerty, is disabled from her employment as an installer technician with Entourage Technology Solutions, a subsidiary of Bell Canada. She was at all material times a member of the CEP local 34.

[ 3 ] The evidence discloses that this disability was diagnosed as a permanent one in the month of June, 2006. The disability insurer denied her claim for LTD benefits.

[ 4 ] The ability to successfully sue or appeal the decision of the disability insurer was prescribed by virtue of a two-year limitation period that expired at the end of the month of June, 2008.

[ 5 ] The defendants are local and national unions; Jeff Smith, a retired representative for CEP national, Dave Coles, a national union representative for CEP national; and Jim Fling a union representative for local 34. They advance this motion on the basis that the court has no jurisdiction to hear the matter as it is a matter that should be before the Ontario Labour Relations Board.

Factual Background

[ 6 ] The factual background to this case can be summarized as follows:

• The plaintiff is 48 years old and resides with her husband and children in Morrisburg, Ontario. She was employed as an installer technician with Entourage Technologies Solutions, a subsidiary of Bell Canada. The plaintiff was a member of local 34 of the CEP.

• Dave Coles was at all material times the president of CEP Canada. Jim Fling was the local representative of local 34 of CEP. Jeff Smith was at all times a national representative for local 34 of CEP (he is now retired).

• The collective agreement provided amongst other benefits a long-term disability income plan. Originally funded through Provident Life Insurance Company, later taken over by RBC Life Insurance Company.

• In May, 2003, the plaintiff developed a severe illness as a result of eating a hamburger at a fast food restaurant. She received short-term disability benefits from May, 2003 to November, 2003.

• The disability continued and she applied for and received long-term disability benefits commencing November 2, 2003.

• The plaintiff in the fall of 2003 approached CEP about her disability issues specifically concerning short-term disability benefits.

• On October 20, 2003 a grievance was filed by CEP local 34. Disability benefits were paid retroactive to November 2, 2003.

• In April, 2005, the plaintiff sent a letter to Smith outlining the difficulties she was having with RBC in determining her eligibility for LTD benefits.

• RBC continued this long-term disability coverage until March, 2006, when they advised the plaintiff that she was no longer disabled and was being provided with transitional benefits until June 1, 2006.

• In March 2006, the plaintiff signed an authorization at Smith's request permitting the union to represent her in all matters relating to short-term and long-term disability claims "up to including any legally required court proceedings".

• RBC notified the plaintiff by letters dated June 20, 2006, and June 27, 2006, that the decision to terminate benefits was confirmed. Following these letters the plaintiff contacted both Smith and Fling on a regular basis and was advised by them that CEP would be appealing on her behalf RBC's decision. It would be filing a grievance and commencing legal action including engaging the services of a lawyer as a means of assisting her.

• On August 1, 2006, another grievance was filed by local 34 CEP alleging that the employer was in violation of the collective agreement in that they had cut off disability benefits.

• CEP national and Jeff Smith assisted the plaintiff in her attempts to return to work on January 10, 2007 she completed a functional abilities evaluation which indicated she would be suited to lighter duties. On March 19, 2007, Smith wrote to the employer indicating that the plaintiff should be returned to work on modified duty or they should demand that the disability insurance benefits be reinstated.

• On August 10, 2007, another grievance was filed by local 34 CEP alleging a violation of the benefits provisions of the collective agreement demanding either reinstatement of LTD benefits or accommodation to return to work.

• Susan Ballantyne and her firm has acted for local 34 since the 1990s. They were primarily her client.

• She did not have a general retainer agreement but was contacted on an "as needed basis".

• On August 1, 2006, November 16, 2006, October 24, 2007, and July 16, 2008, Susan Ballantyne met the plaintiff, Fling the local union representative, was also present at two of the meetings. The discussion at these meetings concerned the plaintiff returning to work and what the employer's duty was to accommodate her disability.

• The evidence supports the proposition that the lawyer was not specifically retained to initiate a lawsuit against RBC for long-term disability benefits. She was retained by the union to assist in providing advice concerning the filing of grievances in regards to work accommodation for the plaintiff.

• Medical evidence was sought by Ballantyne in the context of obtaining an opinion about the plaintiff getting back to work. In particular, the "groomer" position with the employer was being contemplated. Correspondence sent on November 7, 2007, to the plaintiff's physician corroborates this issue.

• On October 31, 2008, local 34 retained Susan Ballantyne to assist the plaintiff with her claim for long-term disability benefits. Ballantyne received medical reports between in September and November, 2008, demonstrating that the plaintiff was totally disabled.

• The limitation period to sue for long-term disability benefits against RBC expired at the end of the month of June 2008. The plaintiff sued everyone concerned including all of the unions and their representatives for negligence and breach of contract.

Analysis

[ 7 ] The fundamental issue to be decided on this motion is whether this is a matter that is governed by the Labour Relations Act and consequently outside of the court’s jurisdiction, or whether it is a matter that can proceed as an action in negligence/breach of contract in the Superior Court of Ontario.

[ 8 ] In Weber v. Ontario Hydro, 1995 108 (SCC) , [1995] 2 S.C.R. 929, the Supreme Court of Canada set out the test to determine exclusive jurisdiction at paras. 50, 51, and 52:

[50] The final alternative is to accept that if the difference between the parties arises from the collective agreement, the claimant must proceed by arbitration and the courts have no power to entertain an action in respect of that dispute. There is no overlapping jurisdiction.

[51] On this approach, the task of the judge or arbitrator determining the appropriate forum for the proceedings centres on whether the dispute or difference between the parties arises out of the collective agreement. Two elements must be considered: the dispute and the ambit of the collective agreement.

[52] In considering the dispute, the decision maker must attempt to define its "essential character"… Some cases, however, may be less than obvious. The question in each case is whether the dispute, in it’s essential character, arises from the interpretation, application, administration or violation of the collective agreement.

[ 9 ] The defendants take the position that the plaintiff's action is in effect a claim for damages arising from an alleged breach of a unions duty of fair representation under s. 74 of the Labour Relations Act, 1995, SO 1995 c.1 (the Act) which provides:

74. A trade union or council of trade unions, so long as it continues to be entitled to represent employees in a bargaining unit, shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the unit, whether or not members of the trade union or of any constituent union of the council of trade unions, as the case may be.

[ 10 ] Section 114 (1) of the Act confers exclusive jurisdiction on the Ontario Labour Relations Board to determine all issues of fact or law governed by the Act, including whether or not there has been a breach of a union’s duty of fair representation.

[ 11 ] The position of the moving parties can be summarized as follows:

• The court has no jurisdiction to hear the matter as it arises out of a claim for damages for breach of a union’s duty of fair representation, a matter that is in the exclusive jurisdiction of the Ontario Labour Relations Board by virtue of s.74 of the Act.

• All questions pertaining to a unions representation efforts respecting disability claims that are in existence pursuant to a collective agreement are properly within the jurisdiction of the labour board and not the courts. See Askey v. British Columbia (Minister of Health), 1997 CarswellBC 482 (BCSC) at para. 41 .

• Even if the court has some doubt about whether the matters at issue should be before the board or the courts, that threshold question is one that should be determined by a labour arbitrator and not the courts. See Halifax Regional School Board v. Nova Scotia Union of Public Employees (1998), 1998 NSCA 199 , 171 D.L.R. (4th) 322 (NSCA), at para. 13 .

[ 12 ] Counsel representing the plaintiff submits that the court has jurisdiction to hear this matter and advances the following arguments:

• The Superior Court's jurisdiction is only removed when there is legislation or an arbitration agreement that clearly and unequivocally removes that jurisdiction: See TeleZone Inc. v. Atty. Gen. of Canada, 2008 ONCA 892 , para. 92 .

• The character of this dispute arises from the denial of the payment of benefits based on the decision of an insurer that the individual was not disabled and the failure to file an appeal or allow a limitation period to expire. This is not something that is arbitrable; it is something that falls within the jurisdiction of the court.

• The union representatives in this case acted in a manner that created a duty of care to the affected claimant by promising to do things and take action with respect to work-related issues that fell outside of the statutory framework. The claim in question is properly framed in negligence and consequently can and should be adjudicated by the courts.

[ 13 ] In my view, the determination of this motion hinges on whether or not the allegations made against the defendants fall within the ambit of the CEP (local 34) and (national) and/or their representatives obligation to provide fair representation to a member of their union and whether the dispute "arises either expressly or inferentially from the interpretation, application, administration or violation of the collective agreement".

[ 14 ] The statement of claim is framed in negligence and breach of contract. It alleges that the defendants agreed and /or created a duty to assist the plaintiff in the appeal of a decision denying long-term disability benefits. It also alleges a failure to prosecute a claim for long-term disability benefits against a disability insurer prior to the expiration of a two year limitation period.

[ 15 ] The expiration of the two-year limitation period and the unavailability of a remedy under the collective agreement sets this case apart from the case relied upon by the moving party. In Askey v. British Columbia (Minister of health), supra , the collective agreement provided for long-term disability payments which were independent of a third-party insurance company: See paras. 64-65 of the Askey decision.

[ 16 ] The collective agreement here does not provide for long-term disability insurance payments guaranteed by the employer; it simply indicates that the employees would be entitled to the Long Term Disability Income Plan: See article 22 of the collective agreement.

[ 17 ] The third-party insurance company denied coverage. They are not bound by the collective agreement and they cannot be compelled to reinstate benefits through a grievance. The union and its representatives cannot be compelled to pay general damages for negligence by the OLRB.

[ 18 ] This lawsuit does not have as its essential character the interpretation, application, administration or violation of the collective agreement. The union or its representatives by their actions arguably created a duty of care to the plaintiff. It is also arguable that she relied upon their advice that they would look into the long-term disability claims and would initiate a lawsuit if that were required. The lawsuit being prescribed may be found to be as a result of their negligent misrepresentation which would make it a matter for the courts, not the OLRB.

[ 19 ] In March 2006, the plaintiff executed an authorization at the request of the union representatives requesting that the union represented her in all matters relating to short-term and long-term disability claims "up to and including any legally required court proceedings". They arguably failed to do what they promised to do to the plaintiff’s detriment.

[ 20 ] In conclusion, I find that the factual history in this case supports the proposition that the union representatives may have created a duty of care by promises made to the plaintiff. The alleged breach of that duty of care allows for an action in negligence, taking this case outside of the collective agreement and the exclusive jurisdiction of the OLRB. Consequently, the motion under Rule 21 is dismissed.

[ 21 ] Counsel representing the plaintiff shall deliver their argument within 15 days of the release of this decision. Counsel for the defendants will have 10 days thereafter to provide their submissions.

Maranger J.

Released: May 8, 2012

COURT FILE NO.: CV-10-48496

DATE: 2012/05/08

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: KELLY CONNERTY Plaintiff DAVE COLES on his own behalf and on behalf of all other members of COMMUNICATIONS, ENERGY AND PAPERWORKERS UNION OF CANADA/SYNDICAT CANADIEN DES COMMUNICATIONS, DE L’ENERGIE ET DU PAPIER and JIM FLING on his own behalf and on behalf of all other members of LOCAL 34 OF COMMUNICATIONS, ENERGY AND PAPERWORKERS UNION OF CANADA/SYNDICAT CANADIEN DES COMMUNICATIONS, DE L’ENERGIE ET DU PAPIER and SUSAN BALLANTYNE and RAVEN, CAMERON, BALLANTYNE & YAZBECK, and JEFF SMITH Defendants REASONS FOR DECISION Maranger J.

Released: May 8, 2012