ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-08-363271-00CP
DATE: 20121120

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

Harvey Strosberg, Q.C., Harvin Pitch, Theodore P. Charney and Ryan Lake 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
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 , for the defendant Technical Standards and Safety Authority
Paul Belanger , for the defendants Felipe De Leon and 1369630 Ontario Inc.
David Visschedyk and 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.
Anne Thompson, for the defendants, Robert Parsons Equipment Trading Inc., and Pro-Par (1978) Inc.
Jasdeep Singh Bal , for defendant Keddco Mfg. Ltd.

HEARD: October 1, 4 and 5, 2012

c. hORKINS J.

introduction

1The certification motion in this proceeding was heard in May 2012. In reasons released on July 23, 2012 ( Durling v. Sunrise Propane Energy Group Inc. , 2012 ONSC 4196 , [2012] O.J. No. 3408), I certified the action against all of the defendants except the defendants 2094528 Ontario Inc., Teskey Construction Co. Ltd., Teskey Concrete Co. Ltd. and HGT Holdings (“Teskey defendants”).

2The pleading against the Teskey defendants was struck with leave granted to the plaintiffs to amend the statement of claim. In summary, I concluded that the plaintiffs had failed to satisfy the s. 5(1)(a) criterion because the “very foundation of the causes of action against the Teskey defendants was certain to fail”. The certification motion against the Teskey defendants was adjourned.

3The plaintiffs bring this motion seeking an order amending the statement of claim and certifying the action against the Teskey defendants. The amendments are set out in a claim titled “Further Fresh Statement of Claim” (I will refer to this pleading as the “proposed statement of claim”).

4The proposed statement of claim seeks to correct the pleading deficiencies that I identified in my July reasons. The causes of action are no longer advanced against the Teskey defendants as a group. The plaintiffs no longer seek to pierce the corporate veil of these corporate defendants. The one economic unit and alter ego theories have been abandoned. The plaintiffs continue to allege various agency relationships between the Teskey defendants. The cause of action based on trespass has been withdrawn.

5The proposed statement of claim also seeks to correct other deficiencies by pleading the essential elements of the alleged agency relationships, including material facts that were missing, and explaining the role of each Teskey defendant at various points in time.

6Three causes of action remain: negligence, nuisance and strict liability. Each cause of action is pled against each Teskey defendant individually.

7The sole issue for the continuation of this certification motion is whether the proposed statement of claim satisfies the s. 5(1)(a) criterion as against the Teskey defendants. The Teskey defendants say it is plain and obvious that the causes of action against each of them will fail.

8For the reasons that follow, the common law negligence cause of action against the Teskey defendants satisfies the s. 5(1)(a) criterion. All other causes of action fail to meet the criterion. On this limited basis, the proceeding is certified against the Teskey defendants.

Review of The proposed statement of claim

9I start with a review of the relevant parts of the proposed statement of claim (paragraph references refer to the proposed statement of claim). This will involve some repetition of what is set out in my July reasons. This review is important because it sets the stage for considering the causes of action against the Teskey defendants.

The Sunrise Defendants

10The substance of the allegations against the Sunrise defendants has not changed in the proposed statement of claim. From 2004 until the explosions occurred, the Sunrise defendants operated a business receiving, storing and distributing propane and other industrial gases out of a facility located at 48 and 54/62 Murray Road (the “Sunrise propane facility”) (para. 38). The Sunrise defendants did not own this property. It was leased.

11The Sunrise propane facility is located on 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.

12The Sunrise propane facility is located in a “well-established residential community and is open 24 hours a day for the supply of propane.” Propane is a gas used as fuel for a variety of purposes, including heating, cooking and as a fuel for certain vehicles. The Sunrise defendants supplied bulk propane as well as propane for home use (para. 38).

13Paras. 40-41 allege as follows (“Property” in this excerpt means 48 and 54 Murray Road):

From approximately 2004 and ongoing the Sunrise Companies have had control of the Property where the Facility is located by virtue of their lease of the Property and operation of a business on the Property.

Propane is a highly inflammable material and appropriate precautions should be taken when operating a Facility that stores and distributes propane. The Sunrise Companies permitted certain unsafe practices at the Facility. Specifically, the transfer of propane from one truck to another was a frequent and routine practice at the Facility.

... (Full decision text continues exactly as provided in the source)

___________________________ C. Horkins J.

Released: November 20, 2012

COURT FILE NO.: CV-08-363271-00CP
DATE: 20121120

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