ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-08-363271-00CP
DATE: 20120723

PROCEEDING UNDER the Class Action Proceedings Act, 1992 , S.O. 1992, C. 6

BETWEEN:

JAMES DURLING, JAN ANTHONY THOMAS, JOHN SANTORO, GIUSEPPINA SANTORO, ANNA MANCO, FRANCESCO MANCO and CESARE MANCO
Plaintiffs

– and –

SUNRISE PROPANE ENERGY GROUP INC., 1367229 ONTARIO INC., 1186728 ONTARIO LIMITED, 1369630 ONTARIO INC., 1452049 ONTARIO INC., VALERY BELAHOV, SHAY (SEAN) BEN-MOSHE, LEONID BELAHOV, ARIE BELAHOV, 2094528 ONTARIO INC., HGT HOLDINGS LTD., TESKEY CONSTRUCTION CO. LTD. and TESKEY CONCRETE CO. LTD., THE TECHNICAL STANDARDS AND SAFETY AUTHORITY, FELIPE DE LEON, ONTARIO HOSE SPECIALTIES LIMITED, PERAFLEX HOSE INC., PERAFLEX HOSE INDUSTRIES INC., BLACKMER OPERATING AS A DIVISION OF DOVER ENERGY INC., WELDEX COMPANY LIMITED, KEDDCO MFG. LTD., ROBERT PARSONS EQUIPMENT TRADING INC. and PRO-PAR (1978) INC.
Defendants

Harvin D. Pitch, Theodore P. Charney , Ryan Lake and Sharon Strosberg for the plaintiffs

Robert J. Potts and Mirilyn R. Sharp , for the defendants Sunrise Propane Energy Group Inc., 1367229 Ontario Inc., 1186728 Ontario Limited, Valery Belahov, Shay (Sean) Ben-Moshe, Leonid Belahov, and Arie Belahov

Ward Branch , for the defendant 1452049 Ontario Inc.

John A. Campion and Antonio Di Domenico , for the Defendants, 2094528 Ontario Inc., HGT Holdings Ltd., Teskey Construction Co. Ltd., and Teskey Concrete Co. Ltd.

Lisa La Horey and Rory Barnable , for the defendant Technical Standards and Safety Authority

Paul Belanger , for the defendants Felipe De Leon and 1369630 Ontario Inc.

Daniel I. Reisler and John Lea, for the defendant Ontario Hose Specialties Limited

Stuart Ghan , for the defendants Peraflex Hose Inc., Peraflex Hose Industries Inc.,

Linda Phillips-Smith and Kathleen Urdahl, for the defendant Blackmer operating as a division of Dover Energy Inc.

Barry L. Yellin , for the defendant Weldex Company Limited

Dana Eichler , for defendant Keddco Mfg. Ltd.

Anne Thompson, for the defendants, Robert Parsons Equipment Trading Inc., and Pro-Par (1978) Inc.

David S. Young and Kevin Bridel , for the third party, 856187 Ontario o/a Westside

HEARD: May 14, 15, 16, 17 and 18, 2012

c. hORKINS J.

Introduction

[ 1 ] This is a motion for certification of a proposed class action pursuant to s. 5 of the Class Proceedings Act, 1992 , S.O. 1992, c. 6 (" Class Proceedings Act ").

[ 2 ] The proceeding arises out of a series of explosions that occurred on August 10, 2008 at a propane facility (“Sunrise propane facility”) located in Toronto. The explosions caused several massive fireballs to be released into the air and over the surrounding neighbourhood. The Toronto Police ordered a non-compulsory evacuation order of everyone within 1.6 km of the Sunrise propane facility. It is alleged that as a result of the explosions, the plaintiffs and proposed class suffered property damage and/or personal injury.

[ 3 ] The plaintiffs seek to certify this proceeding as a class action on behalf of a class defined as follows:

All persons who were present or owned or leased or rented or occupied properties located within the area in the City of Toronto bounded by Keele Street, Highway 401, Sheppard Avenue and Dufferin Street when a series of explosions occurred on August 10, 2008 at the propane facility located at 48/54/62 Murray Road in the City of Toronto, excluding the defendants and third parties and excluding the defendants’ and third parties’ officers, directors, servants, employees or agents.

[ 4 ] There are two groups of defendants that contest certification. The defendants 2094528 Ontario Inc., Teskey Construction Co. Ltd., Teskey Concrete Co. Ltd. and HGT Holdings (“Teskey defendants”) say that the plaintiffs have not satisfied the s. 5(1)(a) criterion as it relates to them. They take no position on the rest of the s. 5 criteria except for the wording of some common issues. The defendant, Blackmer operating as a division of Dover Energy Inc. (“Blackmer”), says that the plaintiffs have not satisfied s. 5(1)(c) criterion as it relates to it. The title of proceeding was amended at the outset of the certification motion on consent to remove Dover Corporation and Dover Corporation (Canada) Limited Societe Dover (Canada) Limitee and replace it with Blackmer operating as a division of Dover Energy Inc.

[ 5 ] All of the other defendants consent to certification of this proceeding as a class action. For the reasons that follow, I conclude that the plaintiffs have not satisfied the s. 5(1)(a) criterion against the Teskey defendants. The plaintiffs have satisfied the s. 5(1)(c) criterion against Blackmer.

Overview of the Statement of Claim

1. The Defendants

[ 6 ] The Amended Fresh as Amended Statement of Claim (“statement of claim”) divides the defendants into four groups:

(1) The Sunrise defendants

(2) The Teskey defendants

(3) The Technical Standards and Safety Authority (“TSSA”)

(4) The defendants that allegedly designed, manufactured and/or distributed various parts involved in the tank to tank transfer of propane that led to the explosions or were involved in the actual transfer of propane: Felipe De Leon, Ontario Hose Specialties Limited, Peraflex Hose Inc., Peraflex Hose Industries Inc., Blackmer operating as a division of Dover Energy Inc., Weldex Company Limited, Keddco Mfg.Ltd., Robert Parsons Equipment Trading Inc. and Pro-Par (1978) Inc.

[ 7 ] The following provides a summary of the defendants as described in the statement of claim.

The Sunrise Defendants

[ 8 ] The defendant Sunrise Propane Energy Group Inc. supplied propane and industrial gases at the Sunrise propane facility located at 54 and 48 Murray Road, Toronto, Ontario. It operated under the names Sunrise Propane Industrial Gases and Sunrise Propane Industrial Cylinders.

[ 9 ] The class definition describes the location of the Sunrise propane facility as 48/54/62 Murray Road. This location consists of two relevant parcels of land: 48 Murray Road and 54/62 Murray Road (54 and 62 refer to the same piece of land and will be referred to in these reasons as “54 Murray Road”). The north side of 48 Murray Road is adjacent to the south side of 54 Murray Road. The Sunrise propane facility was located primarily on 54 Murray Road. A small part of the Sunrise propane facility occupied the north east corner of 48 Murray Road.

[ 10 ] The defendant 1367229 Ontario Inc. carried on business as Sunrise Propane. It is authorized to operate a propane filling plant pursuant to O. Reg. 211/01 , made under the Technical Standards and Safety Act, 2000 , S.O. 2000 c.16 (“ TSSA Act ”). This defendant is named as the tenant on the lease of 54 and 48 Murray Road.

[ 11 ] The defendant 1186728 Ontario Limited also carried on business as Sunrise Propane, and is authorized to operate a propane filling plant pursuant to O. Reg. 211/01 , made under the TSSA Act .

[ 12 ] The defendant 1369630 Ontario Inc. carried on business as Sunrise Propane. It is the owner and operator of a fleet of trucks/tank trailers used to transport propane and other industrial gases to and from the Sunrise propane facility.

[ 13 ] The defendant 1452049 Ontario Inc. (operating as “Discount Propane”) is the owner and operator of a fleet of trucks/tank trailers used for the purpose of transporting propane and other industrial gases to and from the Sunrise propane facility.

[ 14 ] There are two trucks/tanks in issue: Cargo Liner Unit 861 (“Unit 861”) and Cargo Liner Unit 1 (“Unit 1”). They were owned and/or operated by 1369630 Ontario Inc. and 1452049 Ontario Inc.

[ 15 ] Together it is alleged that Sunrise Propane, 1367229 Ontario Inc., 1186728 Ontario Limited, 1369630 Ontario Inc., and 1452049 Ontario Inc. (“the Sunrise defendants”) operated the Sunrise propane facility located at 54 and 48 Murray Road, supplying propane and industrial gases. They operated under the names Sunrise Propane, Sunrise Propane Industrial Gases and Sunrise Propane Industrial Cylinders.

[ 16 ] The defendants Valery (Valeri) Belahov, Shay (Sean) Ben Moshe, Leonid Belahov and Arie Belahov are directors of 1367229 Ontario Inc. and/or 1186728 Ontario Ltd. The defendant Valery (Valeri) Belahov was also an officer and director of 1369630 Ontario Inc.

The Teskey Defendants

[ 17 ] There are four defendants in this group: 2094528 Ontario Inc. ("Teskey 209"), HGT Holdings Ltd. ("HGT"), Teskey Construction Co. Ltd. ("Teskey Construction") and Teskey Concrete Co. Ltd. ("Teskey Concrete"). Reference in this judgment to the Teskey defendants means these four defendants.

[ 18 ] The statement of claim alleges in paragraphs 17-18 that at all material times Teskey 209 owned 54 Murray Road and a neighbouring property at 20 Murray Road and HGT owned 48 Murray Road. They each owned part of the property where the Sunrise propane facility was located (the property means 54 and 48 Murray Road).

[ 19 ] In paragraph 20 it is alleged that Teskey Construction and Teskey Concrete leased the property from Teskey 209 and HGT. Further, it is alleged that at all material times Teskey Construction, Teskey Concrete, HGT and Teskey 209 were operated as one economic unit or one economic enterprise. Alternatively, the plaintiffs allege that Teskey 209 and HGT were operated as the alter egos of Teskey Construction and Teskey Concrete.

[ 20 ] Finally, in paragraph 21, the plaintiffs allege that all material times, Teskey Construction, Teskey Concrete, HGT and Teskey 209 were each agent for the other and vicariously liable for the acts and omissions of the others.

[ 21 ] I note that the plaintiffs do not define in the statement of claim what they mean by the phrase “at all material times.” This phrase is commonly used in pleadings without any regard for what it means in the specific case. However, to plead in this manner can be vague. However, to plead in this manner can be vague. In this case, it is particularly vague and problematic because there are three leases allegedly dealing with 54 and 48 Murray Road, each Teskey defendant owned one of the Murray Road properties at some point and the alleged unsafe transfers of propane at the Sunrise propane facility continued over an extended period of time.

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___________________________ C. Horkins J.

Released: July 23, 2012

COURT FILE NO.: CV-08-363271-00CP
DATE: 20120723

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN:

JAMES DURLING, JAN ANTHONY THOMAS, JOHN SANTORO, GIUSEPPINA SANTORO, ANNA MANCO, FRANCESCO MANCO and CESARE MANCO
Plaintiffs – and –
SUNRISE PROPANE ENERGY GROUP INC., 1367229 ONTARIO INC., 1186728 ONTARIO LIMITED, 1369630 ONTARIO INC., 1452049 ONTARIO INC., VALERY BELAHOV, SHAY (SEAN) BEN-MOSHE, LEONID BELAHOV, ARIE BELAHOV, 2094528 ONTARIO INC., HGT HOLDINGS LTD., TESKEY CONSTRUCTION CO. LTD. and TESKEY CONCRETE CO. LTD., THE TECHNICAL STANDARDS AND SAFETY AUTHORITY, FELIPE DE LEON, ONTARIO HOSE SPECIALTIES LIMITED, PERAFLEX HOSE INC., PERAFLEX HOSE INDUSTRIES INC., BLACKMER OPERATING AS A DIVISION OF DOVER ENERGY INC., WELDEX COMPANY LIMITED, KEDDCO MFG. LTD., ROBERT PARSONS EQUIPMENT TRADING INC. and PRO-PAR (1978) INC.
Defendants

REASONS FOR JUDGMENT

C. Horkins J.

Released: July 23, 2012