ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-09-13870
DATE: 2013-12-11
B E T W E E N:
CITY OF HAMILTON
Simpson, Wigle Law LLP
Derek A. Schmuck,
Solicitor for the Plaintiff
Plaintiff
-and-
THIER + CURRAN ARCHITECTS INC.
Brunner and Lundy
Mario A. Delgado,
Solicitor for the Defendant
Defendant
-and-
THE ATLAS CORPORATION, URBAN MECHANICAL CONTRACTING LTD., TRICIN ELECTRIC LTD., MHPM PROJECT MANAGERS, and H.H. ANGUS AND ASSOCIATES LIMITED
Salvatore Mannella
Salvatore Mannella,
Solicitors for the Third Party,
The Atlas Corporation
Bisceglia & Associates
Emilio Bisceglia,
Solicitors for the Third Parties,
Tricin Electric Ltd., and Urban Mechanical Contracting Ltd.,
Morris Chochla/Mark Coleman,
Solicitors for the Third Party, H.H. Angus and Associates Limited
Third Parties
Heard: December 5, 2013
WHITTEN J.
ENDORSEMENT
[1] This litigation centers on the reconstruction and redevelopment of the Wentworth Lodge for the aged. The general contractor for this project was The Atlas Corporation (“Atlas”).
[2] Atlas has filed a lien which includes a claim for its sub-trades, two of whom are Urban Mechanical Contracting Ltd. and Tricin Electric. The former carried out the mechanical work on the project and the latter the electrical requirements.
[3] There are a series of construction lien claims and suits, involving the City of Hamilton (“City”), Atlas, the Aviva Corporation (“Aviva”) which is the bondsmen for the City; the two sub-trades Urban Mechanical Contracting Ltd., (“Urban”) and Tricin Electric Ltd., (“Tricin”) and the architectural firm of Thier and Curran Architects Inc. (“Thier and Curran”).
[4] One of the suits is commenced by Urban against the bonding company Aviva and the City. The court file no is: CV-09-376834. This is a suit for economic loss based on all the improvements to the property which is subject to the bond provided by Aviva. The content of this particular pleading, although against Atlas and the City is primarily focused on the bondsmen Aviva. Atlas in its Statement of Defence pleads the fact of its lien against the City and the fact of holdback by the City, and that some of the claims by Urban are outside the subcontract to Atlas and Urban.
[5] The suit makes reference to delays which were either caused by the City or events beyond the control of Atlas or Urban itself. Atlas and Aviva have cross claimed against the City in which this responsibility for delay is reiterated. The City cross claims against Atlas and Atlas defends.
[6] Urban also claims against the City and Atlas and the court file no is: 09-99 which is essentially for the same dollar amount as the above action, however, it is pursuant to the Construction Lien Act. For the purposes of this discussion it will be referred to as the “Urban Lien”.
[7] The Urban Lien as can be expected generates various defences and counterclaims. One of the latter is that of the City against Atlas. Again delay is raised as an issue along with breach of trust by Atlas and unjust enrichment is pled relative to Atlas. Atlas defends all of these claims both by the City and Urban.
[8] There are a series of similar actions by Tricin Electric namely, the lien action in and of itself which provoke similar counterclaims by the City and Atlas. Tricin like Urban proceeds against the City, Atlas and Aviva.
[9] Aviva and Atlas are represented by the same counsel and ultimately leaving aside the liability issue, their exposure would depend upon what is found due to the sub-trades Urban and Tricin under the main lien action by Atlas. It is possible that some of the actions of the sub-trades based on economic loss may be outside of the scope of the construction lien action. One notes that the breach of trust action according to section 50.2 of the Construction Lien Act cannot be joined with a construction lien claim. That being said it is within the lien action of the sub-trades that “lies the rub”. If the improvement carried out by the sub-trades cannot be proven to the extent claimed that would define the breach of trust or economic loss claim. In other words, the value of the liens is the starting point for all remedies.
[10] On March 23, 2010 against the objections of counsel for the sub-trades, this court as the case management judge, ordered the consolidation of all the actions. There have been numerous case conferences since then, and there have been settlement conferences as well. The consolidated action is estimated to take some 22 weeks.
[11] One observation that can be made is that the architectural firm which originally stepped into the project management/architectural role after the original architectural firm (who had done the original plans) went bankrupt is a peripheral player in these proceedings.
[12] As a result of the settlement conferences, attempts at mediation, and discussions between counsel, a conditional settlement has emerged. The City (acknowledging some responsibility for the delays), the architects, the bondsmen and other defendants have made an offer to Atlas with respect to its lien (the umbrella action), which is acceptable to Atlas but not the sub-trades Urban and Tricin.
[13] One can say with virtual absolute certainty that the sub-trades would not realize on the best of days an amount greater than what Atlas is entitled to as a general contractor based on the offer which traps for the sum held back by the City as holdback, as the claims of the sub-trades principally are subsumed within the Atlas claim.
[14] Not surprisingly the City, Atlas, the architectural firm, the bondsmen moved to have the lien action by the sub-trades tried first, a trial which is guestimated in single digits in terms of weeks with the Atlas main action to follow with the actions against the architectural firm bringing up the rear.
[15] The moving parties are quite convinced that this sequence of trials will result in the matter “shaking out” in that the termination of what the sub-trades are entitled to relative to Atlas will (in a way) satisfy the conditional offer and the necessity for subsequent trials will become moot.
[16] The sub-trades resist this variation of the original order of March 23, 2010, claiming that they will in effect be facing two trials and consequently more expense, and the possibility of inconsistent verdicts.
[17] Counsel for the sub-trades argues that the offer conditionally accepted as it were, is not admissible, citing such authorities as the Law of Evidence in Canada, (2nd Ed) by the learned authors Sopinka, Letterman and Bryant (Butterworths). The principle objection being that the offer is subject to privilege as it is a phenomenon of parties trying to resolve the issues between them. In other words, it is not admissible. The underlying rationale behind the privilege is that settlement discussions would be discouraged if a settlement could become a piece of evidence used by one side against the other. It is a substantial evidentiary rule.
[18] The situation before the court requires that the court examine the role of a Rule 77 judge.
[19] The purpose of such a role according to Rule 77.01(1) is to provide case management in only those proceedings where there is a demonstrated necessity for intervention. Rule 77.01(2)(1) recognizes that for the most part counsel bear the responsibility for management and moving a matter along expeditiously. That being said, sub-Rule (2) speaks of the extent of case management provided being “informed by any relevant party practices, traditions, customs or judicial resource issues…” The underlined reflects a concern for the efficient allocation of resources. The resources contemplated here are not just the basic administration of justice resources (i.e. judges, courtrooms, court staff), but also the resources available to the parties, namely, their counsel, support staff etc. This is a focus on efficient use of costly resources. Access to justice merits that parties obtain resolutions and relief in a cost effective fashion.
[20] The power to achieve these objectives is in the “management” provided for in Rule 77.04(1). The most effective tool is that of sub rule (e) “to make orders, impose terms, give directions and award costs as necessary to carry out the purpose of this rule”. Counsel has agreed that there will be no costs associated with this motion.
[21] So in the matter on hand what is sought is a variation of the order made March 23, 2010 and to create a sequence for the trials of the various claims. In a way it is a variation of an order relating to a procedure pursuant to Rule 59.06(2)(a) on the basis of “new facts arising”.
[22] The new fact is the offer conditionally accepted by Atlas. The original order was procedural in nature and so is the variation sought. The role of the case management jurist is procedural. That jurist is not trying these matters and consequently making determinations as to admissibility of evidence, an area in which the privilege would be asserted.
[23] The offer conditionally accepted is relevant to the procedure to be followed as it has the potential to reduce the actual hearing to a matter of weeks vs. months. The case management jurist would be remiss if he or she did not consider its potentiality, given the nature of the role.
[24] The prejudice asserted by the sub-trades is cost centered. Traditionally that form of prejudice is addressed by the granting of costs to the injured party. So in this case the sub-trades would have to make a case before the trial judge that the sequence ordered created unnecessary costs or duplication of costs. This in a way raises the stakes or the risks associated with moving as the City and the architectural firm has. If this proposed sequence does not generate a settlement between Atlas and the City, the bondsmen, the architectural firm and others, then the costs to the sub-trades is upon the heads of the moving parties. In a way, the index of confidence on the part of moving counsel must be quite high to risk costs thrown away.
[25] Therefore for all of the above the motion is granted. The trial sequence shall be:
(1) The trial of the liens of the sub-trades Urban and Tricin and the related claims of these two sub-trades;
(2) The lien claim of Atlas and;
(3) The actions by the City and Atlas as against Thier + Curran.
Whitten J.
Released: December 11, 2013
COURT FILE NO.: CV-09-13870
DATE: 2013-12-11
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
CITY OF HAMILTON
Plaintiff
- and -
THIER + CURRAN ARCHITECTS INC.
Defendant
-and-
THE ATLAS CORPORATION, URBAN MECHANICAL CONTRACTING LTD., TRICIN ELECTRIC LTD., MHPM PROJECT MANAGERS, and H.H. ANGUS AND ASSOCIATES LIMITED
Third Parties
ENDORSEMENT
Whitten J.
ACRW:km
Released: December 11, 2013