ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-11-52780 (St. Catharines)
DATE: 2014-12-18

B E T W E E N:

Dave Schellenberg, Paul Bonneau, Dino Collini, Dan Desrochers, Ian Horton, Chris Parton, Ed Gesch, Mike Rudd, Mark Schouwenaar, Pat Topping, Dan Wiebe, Jason Wittig and Mike Wormald

Bradley J. Troup, for the Plaintiffs

Plaintiffs

• and -

International Brotherhood of Electrical Workers, International Brotherhood of Electrical Workers Local 303, Local 303 International Brotherhood of Electrical Workers’ Health and Welfare Trust, Dave Charron, Frank DiCorso, Peter Lostracco, Peter Wall, Sean Stacey, Mark Cherney and Susan Phillips

Clio Godkewitsch, for the Respondents

Defendants

HEARD: December 11, 2014

JUDGMENT

ARRELL, J.

Introduction:

1The Defendants bring this motion under Rule 20.01(b) to strike out the Statement of Claim of the Plaintiffs as showing no cause of action; or a declaration that the Plaintiffs are not beneficiaries under the trust fund; and that the Plaintiffs are not entitled to a refund of contributions to the trust fund. The Defendants also claim this Court does not have jurisdiction to hear this lawsuit.

Facts:

2The Plaintiffs were employed with Ecco Ltd., which is an electrical contracting company. Originally, Ecco Ltd. was certified with the Defendant Union and the Plaintiffs were all members of that union.

3An application was commenced to decertify the employer at the Ontario Labour Relations Board. The application was successful and the decertification was effective August 4, 2010 meaning Ecco Ltd. was no longer a union employer. On the same date, the Plaintiffs, all union employees of Ecco Ltd., elected to stay with the employer and were immediately expelled from the Union as a result of working for a non-union employer.

4During the time Ecco Ltd. was certified its collective agreement with the Union provided that it would pay an agreed upon hourly amount that each employee worked to the union for employee health and welfare benefits. These payments were to be made to the International Brotherhood of Electrical Workers Local 303 Health and Welfare Trust Fund which had been established in 1960.

5The trust fund used these funds from the employer as premiums to purchase a group health insurance plan for the members administered by Manufactureres Life Insurance Company.

6The members of Local 303, upon becoming employed with Ecco Ltd., were given the “Active Member Benefit Booklet” which stated it was a summary of the “important” provisions of Group Insurance Program available to the members of the Union and dated April 2009 and listed the individual Defendants as the trustees of the trust.

7The Plaintiffs, in essence, bring this claim for an accounting, and payment out, of any excess premiums paid on their behalf to the trust fund. They argue that the “booklet” makes clear that every member has a “dollar bank” which accumulates the funds for each employee paid by the employer. If the amount collected exceeds the premium required for the year then they allege the booklet states they will receive a cash refund for the excess. The Plaintiffs also allege that the accumulated credits, as per the booklet, are to be paid out “when you terminate your participation in Local 303”.

8The Plaintiffs claim that once they were expelled from the Union on August 4, 2010 they had in effect terminated their membership in the union by continuing to work for Ecco Ltd. and could therefore apply for any excess benefits accumulated on their behalf in the trust fund.

9The Defence brings this motion on the basis that the trust fund alone governs the situation and it does not provide that any excess funds would ever be paid out to any employee, never mind ones expelled by the union for working for a non-union employer and therefore there is no cause of action and the claim should be dismissed. In addition they argue the Plaintiffs are not beneficiaries under the trust.

Analysis:

10The plaintiffs claim the Defendants do not have standing to bring this motion as they have not sought leave under Rule 48.

11The procedural history of this action is instructive and significant.

12The Statement of Claim was issued and served in February 2011 and the Defence was filed shortly thereafter. There have been no amendments to the pleadings. Discoveries, for whatever reason, were not completed until August 2013. On consent the matter was pre-tried many months ago and then a trial date of January 12, 2015 was agreed to. The parties acknowledge that they are ready for trial some 6 weeks from now and that the entire trial will take only two days.

13Rule 48.04(1) is clear that a party must seek leave of the Court to initiate any motion after they have consented to the action being placed on the trial list, as here.

14The Defendants do not have leave nor does their notice of motion seek leave. They have given no plausible reason why leave should now be granted other than they allege this Court lacks jurisdiction and there is no cause of action. There is no explanation as to what has changed since the pleadings were exchanged that now suddenly makes a Rule 21 motion appropriate and that leave should therefore be granted.

15The case law would appear to indicate that leave should be given if there has been a substantial and unexpected change in circumstances since the action was set down for trial and that trial fairness dictates that leave be granted. Jetport Inc. v. Global Aerospace 2013 ONSC 2740; Ginkel v. East Asia Minerals 2010 ONSC 905; Hamilton v. Ontario 2013 ONSC 4536.

16There is no evidence before me of any change in circumstances and indeed the motion for which leave is sought is based on a motion arising solely on the pleadings that have remained unchanged since 2011. Trial fairness is not an issue as the trial date is fixed and the parties have assured the Court they are ready to proceed on that date. Any cost savings or efficiencies in hearing this motion now are minimal given that the trial will only take two days and is set six weeks from now, while the motion itself is scheduled for at least half a day.

17I would not grant leave under Rule 48 at this late date and with no reasonable explanation for the delay or evidence of any change in circumstances.

18Should I be in error in my decision under Rule 48 the Plaintiffs also argue that under Rule 21.02 “a motion under Rule 21.01 shall be made promptly and the failure to do so may be taken into account by the Court in awarding costs”.

19I have been referred to Fleet Street Financial Corp. v. Levinson, (2003) 21878 and Cetinalp v. Casino, (2009) 65384 for authority that a Rule 21 motion should be dismissed if not brought promptly or a compelling reason explaining the delay is given.

20In Fleet Street, Rouleau J. dismissed a Rule 21.01 motion and stated as follows at paras 16 and 17:

In my view Rule 21.02 should be read as requiring that a Rule 21.01 motion be brought promptly. While Rule 21.02 goes on to state that failure to do so may be taken into account in awarding costs, this latter part of the Rule does not limit the generality of the first part. The obligation to act promptly is clear and the failure to bring a Rule 21.01 motion promptly can, in the appropriate circumstances, be the basis for the judge exercising his discretion pursuant to Rule 21.01 not to grant the relief sought.

This interpretation of Rule 21.02, that the ability to take delay into account in awarding costs does not qualify the requirement to act promptly, is somewhat clearer when one makes reference to the French version of the Rule. The French version of the Rule which is equally authoritative is drafted using two sentences rather than one. In this way it is clear that the ability of the judge to take delay into account in setting costs is a separate thought which neither limits nor qualifies the unqualified obligation contained in the first sentence of the Rule.

21In Cetinalp, Spies J. held that a Rule 21 motion ought to have been brought at the pleading stage and bringing such a motion close to trial must be discouraged. I agree.

22A Rule 21 motion is a motion to determine a point of law based on the pleadings. The pleadings in this case were available for attack three and a half years ago and have not changed in the interim. See Colonna v. Bell Canada (1993), 15 C.P.C. (3rd) 65 where a delay of 18 months from the time the motion could have been brought was considered too long and the motion was dismissed.

23The Defendants do not allege that there has recently been some change in the law such that as a result the Statement of Claim now shows no reasonable cause of action. Instead, in oral argument, counsel for the Defendants indicated she recently decided to bring this motion as a result of a recent decision of the Superior Court of Ontario in Garcia v. Mackinnon, 2014 ONSC 4410. Counsel argues this case to be on all fours with the one at bar and for that reason only decided to bring this motion at this late date. Counsel does not allege that Garcia has changed the law nor does Counsel argue the case to be binding on me. Garcia does deal with dollar accounts and a union. However, it was an Application by the Plaintiffs who were former union members to maintain an action for return of funds in a benefit trust account.

24In Garcia there is no reference to an employee booklet, authored by the trustees. The facts also are significantly different as to the status of the union member. There is no new law established in this case. As it was an Application there was clearly affidavit evidence, and possibly cross examination on same, before the application judge, which is not present in the case at bar.

25I conclude that although Garcia may have some similarities with the current matter it is far from being on all fours and certainly far from being the reason to bring a Rule 21 motion six weeks before trial when it could have been brought over three years ago.

26The motion by the Defendants under Rule 21 is dismissed as not being brought promptly and with no reasonable explanation to justify such a delay.

27Should I be in error in exercising my discretion in my interpretation of delay under Rule 21 I would dismiss the motion on the merits having heard full argument by both Counsel.

28The test under Rule 21 for dismissal is whether it is “plain and obvious that the Plaintiffs’ action cannot succeed”. MacDonald v. Ontario Hydro, (1994) 2294 (ONSC).

29I conclude there are a number of significant factual issues, which in my view, require evidence and as such it is not plain and obvious that the case will fail:

a) There are two trust agreements and the parties cannot agree which prevails;

b) What is the effect of the employees booklet supposedly authored by the Defendant Trustees;

c) Punitive damages are claimed and evidence is required on that issue;

d) The Plaintiffs allege they will call evidence of prior actions of the Defendants inconsistent with their current positions;

e) Evidence is required as to whether the second trust agreement was backdated to August 5, 2010, as alleged;

f) Neither trust agreement defines beneficiaries and evidence would need to be called on that issue;

g) Evidence is required to address the issue of entitlement to credits in the dollar account upon termination of membership, as was before the judge in Garcia;

30I conclude that it is far from plain and obvious that the plaintiffs’ claim must fail based on the very limited information before me. I further conclude that the trial judge will require evidence and a full record before making a determination on the various issues in this case. I therefore conclude that a trial based on evidence is required in this matter.

31Finally, the Defendants argue that the Superior Court lacks jurisdiction and the matter should be before the Labour Relations Board. I disagree.

32The Court is again perplexed as to why the Defendants raise this issue at this late stage in the proceedings when it would have been known to them upon receipt of the Statement of Claim. Indeed, the Defendants pled a lack of jurisdiction in their defence three and a half years ago and did not raise the issue by motion until now.

33The Defendants appear to rely heavily on Garcia, supra, where there was no issue but that the Superior Court had jurisdiction in that matter.

34The Defendants’ Counsel agrees the Labour Relations Board can make no determination on an issue such as punitive damages, nor can it determine an issue of a trustee’s fiduciary duty. Both significant issues in the case at bar.

35In present case one of the issues appears to be the time frame subsequent to decertification, a time period for which the Labour Relations Board would lack jurisdiction. The Board itself has ruled that on issues between health benefits and trustees the Courts are an appropriate forum. Sheet Metal Workers v. Carpenter Workers (2009) 59667 (ON LRB).

36I therefore conclude that The Superior Court does have jurisdiction to hear this motion and same is dismissed for the reasons given.

37Should the parties be unable to agree on costs they may make written submissions, of no more than 3-4 pages double spaced, in addition to any relevant offers and draft bill of costs, on or before January 23, 2015.

ARRELL, J.

Released: 18th December, 2014

COURT FILE NO.: CV 11-52780 (St. Catharines)
DATE: 2014-12-18

ONTARIO
SUPERIOR COURT OF JUSTICE

B E T W E E N:

Dave Schellenberg, Paul Bonneau, Dino Collini, Dan Desrochers, Ian Horton, Chris Parton, Ed Gesch, Mike Rudd, Mark Schouwenaar, Pat Topping, Dan Wiebe, Jason Wittig and Mike Wormald

Plaintiffs

• and –

International Brotherhood of Electrical Workers, International Brotherhood of Electrical Workers Local 303, Local 303 International Brotherhood of Electrical Workers’ Health and Welfare Trust, Dave Charron, Frank DiCorso, Peter Lostracco, Peter Wall, Sean Stacey, Mark Cherney, and Susan Phillips.

Defendants